ISLAMABAD: People deriving profit less than Rs500,000 on national saving schemes are required to provide a certificate in order to get reduced income tax rate at 10pc, said officials at the Central Directorate of National Savings (CDNS).
At present, the rate of income tax on profit from the national savings scheme is 15pc. However, the rate shall be 10pc in case annual profit is up to Rs500,000 and the person receiving the profit provides a certificate that his return on saving schemes shall not be above the threshold.
Officials said that the rate of tax shall be 15pc in case the annual profit is above Rs500,000 in the said schemes. However, the rate at 15pc is available only to persons on the Active Taxpayers List (ATL). In other cases where a person is not on the ATL, the tax rate shall be 30pc.
Sources said the CDNS had circulated the information about amendments to the Income Tax Ordinance, 2001, through a letter issued early this fiscal year to all zonal heads and other concerned stakeholders.
Through the Finance Act, 2020, an amendment related to profit on debt was introduced to Section 151 of Income Tax Ordinance, 2001.
Section 151 (1)(a) explained that for yield on profit (profit on debt) on account, deposit or a certificate under the National Saving Schemes or Post Office Savings Account, the rate of tax shall be 10pc of the gross yield/profit paid on amount up to Rs500,000. The rate of tax exceeding Rs500,000 shall be 15pc of the gross yield/profit paid. For persons not appearing in the ATL, the applicable tax rate is to be increased by 100pc.