The Federal Board of Revenue (FBR) has amended advance tax rates of profit on bank deposits applicable during the tax year 2021 (July 01, 2020, to June 30, 2021). Accordingly, Income Tax Ordinance, 2001 (updated June 30, 2020) after amendments added through Finance Act, 2020. This article describes the benefits of being a filer in respect of tax rates of profit on bank deposits and tax on bank profits. The FBR reorganized the tax rates, under section 151, as follow:
Profit on debt, u/s 151(1)(a), a person paying profit has to deduct tax from the gross amount of yield. Similarly in any type of Profit on account, deposit or a certificate under the National saving schemes or Post office savings account.
The advance tax on bank profits has been deducted 10% of the gross profit Up to PKR 5 Lac. Likewise 15% advance tax has been deducted of the gross profit if gross profit Exceeding PKR 5 Lac.
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A Persons not appearing in the Active Taxpayers’ List: The applicable tax rate is to be increased by 100%
Profit on debt, u/s 151(1)(b), Banking company or financial institution paying profit on account or deposit maintained.
Advance tax has been deducted 10% of the gross profit Up to PKR 5 Lac. Likewise 15% advance tax has been deducted of the gross profit if gross profit Exceeding PKR 5 Lac.
A Persons not appearing in the Active Taxpayers’ List: The applicable tax rate is to be increased by 100%
Profit on securities, u/s 151(1)(c), other than those mentioned in section 151(1)(a), issued by federal / provincial government or a local government
Advance tax has been deducted 10% of the gross profit Up to PKR 5 Lac. Likewise 15% advance tax has been deducted of the gross profit if gross profit Exceeding PKR 5 Lac.
A Persons not appearing in the Active Taxpayers’ List: The applicable tax rate is to be increased by 100%
Similarly Profit on bonds, certificates, debentures, securities or instruments of any kind, u/s 151(1)(d) (other than loan agreements between borrowers and banking companies or development financial institutions)
Advance tax has been deducted 10% of the gross profit Up to PKR 5 Lac. Likewise 15% advance tax has been deducted of the gross profit if gross profit Exceeding PKR 5 Lac.
A Persons not appearing in the Active Taxpayers’ List: The applicable tax rate is to be increased by 100%
Tax deduction under this section shall be a minimum tax on the Profit on debt arising to a taxpayer, except where —
(a) taxpayer is a company; or
(b) profit on debt is taxable under section 7B.
Peoples in develop Societies pay taxes. You should also read the Benefits for Filler section articles. Which describes well about the benefits being a responsible resident of Pakistan
