FREQUENTLY ASKED QUESTIONs

[ WITHHOLDING TAX ]

Q.13       On which schemes, the withholding tax is applicable and under which law?

Ans:        With the exception of BSC and PBA, profit on all NSS is subject to deduction of withholding tax @ 10 in case the investment exceeds Rs.150,000/- under the Income Tax Law for the time being in force except Regular Income Certificate wherein no such exemption is available.

 Q.14      If two persons are holding joint investment, what is the limit of tax exemption what will be the investment limit either Rs.150, 000/- or Rs.300,000/-?

Ans:      For the purpose of withholding tax deduction, presently Rs.150,000/- shall be deemed to be the limit. As soon as this limit is exceeded the profit shall become liable to withholding tax beyond which tax shall apply irrespective of whether the investment is in single or joint names.

 Q.15      Is there any tax applicable on the prizes won on Prize Bonds, if so, what is the ratio?

Ans:        The tax at the rate of 10% of the prize is deducted at source at the time of payment of prize money in accordance with the Income Tax Ordinance, 2001 as amended from time to time.

 


 

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