Tax on Behbood Saving Certificate

Tax on Behbood Saving Certificate

Tax on Behbood Saving Certificate: The Federal Board of Revenue (FBR), through SRO.1217(I)/2017, has exempted tax from provisions of section 7B of the Income Tax Ordinance 2001 for recipients of profit on debt from Behbood Saving Certificates or Pensioners’ Benefit Accounts.

The Economic Coordination Committee (ECC) has granted exemption from the provisions of Section 7B of the Income Tax Ordinance 2001 for recipients of profit on debt from Behbood Saving Certificates and Pensioners Benefit Accounts.

According to the notification, the provisions of section 7B shall not apply to yield or profit on investment in Bahbood Savings Certificate or Pensioner’s Benefit Account, provided that tax on the said yield or profit on debt is paid at the rates specified in Division I of Part I of the First Schedule subject to clause (6) of Part III of the Income Tax Ordinance 2001.

Tax on Behbood Saving Certificate

Following is the text of the SRO issued here on Friday: In exercise of the powers conferred by sub-section (2) of section 53 of the Income Tax Ordinance, 2001, the Board with the approval of Federal Minister-in-charge and pursuant to the approval of the Economic Coordination Committee of the Cabinet contained vide case NO.ECC-118/21/2017 dated the 1st November, 2017, is pleased to direct that the following further amendment shall be made in the Second Schedule to the said Ordinance, namely:-

In the aforesaid Schedule, in Part IV, after clause (102), the following new clause shall be added, namely:-

“(103) The provisions of section 7B shall not apply to yield or profit on investment in Bahbood Savings Certificate or Pensioner’s Benefit Account, provided that tax on the said yield or profit on debt is paid at the rates specified in Division I of Part I of the First Schedule subject to clause (6) of Part III.”

5 thoughts on “Tax on Behbood Saving Certificate

    • Muhammad Waheed Ensari says:

      Dear Hanif

      Thank you for reaching out to us.

      Yes the Profit in Bahbood Certificates and Pensioners Benefit Account is taxable under first schedule of the Income Tax Ordinance, 2001.

      The National Savings Center does not deduct tax on these profits.

      Looking forward to positive progress.

      Muhammad Waheed Ensari
      Chief Executive Officer
      BeSpoke Consulting and Training
      m: +92 321 8408828
      a: M-34, Landmark Plaza, Jail Road,
      Gulberg-V, Lahore 54000-Pakistan
      w: http://www.thebscon.com e: waheed@thebscon.com
      Tax Consultancy | Accounting | Training | Corporate Services

      • Kamran Ahmad says:

        The is a big issue with this. There are many pensioners who believe there is no tax on behbud certificates. When I told them they checked with NSC and staff at NSC informed that there is no tax. Unfortunately no one is aware about this. Many pensioners have major profits from Behbud and they don’t file return. Some believing it is not taxable and others avoiding tax. I even told FBR about this discrepancy and asked them better to have a lower rate but at source but I don’t believe they care. A lot of tax is not being collected this way. Your thoughts.

    • Muhammad Waheed Ensari says:

      Tax on Bahbood Savings Certificate or Pensioner’s Benefit Account will be calculated at the rates specified in Division I of Part I of the First Schedule the Income Tax Ordinance 2001, subject to clause (6) of Part III of the Income Tax Ordinance 2001.

      Thank you

      Muhammad Waheed Ensari
      Chief Executive Officer
      BeSpoke Consulting and Training
      m: +92 321 8408828
      a: M-34, Landmark Plaza, Jail Road,
      Gulberg-V, Lahore 54000-Pakistan
      w: http://www.thebscon.com e: waheed@thebscon.com
      Tax Consultancy | Accounting | Training | Corporate Services

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