The Federal Board of Revenue (FBR) has said that the non-filers (yield/profit up to 0.5 million) would pay 10 percent withholding tax and non-filers (yield above 0.5 million) 17.5 percent withholding tax on the yield or profit on debt of National Savings accounts. The FBR has issued instructions to Director General Central Directorate of National Savings Islamabad here on Tuesday.
The FBR said that the various amendments have been made in the Income Tax Ordinance, 2001, through the Finance Act, 2015. The amendments made in the provisions of Income Tax Ordinance, 2001 and the latest withholding tax rates under various sections are applicable w.e.f. 1st July, 2015. Major provisions of withholding tax being dealt by Central Directorate of National Savings is section 151(1) (a) is profit on debt on National Savings accounts). The tax rates for the sections 151(1) (1) and 234 as per Finance Act, 2015 applicable w.e.f. 1st July, 2015.
Under section 151(1)(a), the provision of the section is related to the yield or profit (profit on debt) on account, deposit or a certificate under the National Saving Schemes or Post Office Savings Account. Under section 151(1)(a) of the Income Tax Ordinance, filer would pay tax at the rate of 10 percent of the gross yield paid; non- filer up to Rs 5 lac, tax rate would be 10 percent of the gross yield paid and in case of non-filers (yield above Rs 5 lac), tax rate is 17.5 percent of the gross yield paid.
In view thereof, it is requested that all the field offices may be directed to deduct withholding tax at the revised rates including tax u/s 151(1)(a) of the Income Tax Ordinance, 2001, the FBR added. In order to ensure that the correct application of rates for filers and non-filers, ''filers'' means those whose names are appearing in the "Active Taxpayer List" on the website of the FBR and no other document/manual return be treated in this regard.
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