Unlocking the Secrets: Rs. 100 Prize Bond Win and Filer Tax Explained
Prize bond winnings in Pakistan are subject to withholding tax, and the rate of tax deduction depends on whether the recipient is a filer or a non-filer. For filers, the withholding tax rate is 15% at the source at the time of payment of the prize money for prizes won on or after 01-07-2016.
However, for non-filers, the withholding tax rate is higher at 30% on prize bond winnings. This means that individuals who have not filed their income tax returns will have a larger portion of their prize money deducted as tax.
The Advance Prize bond tax and winnings under section 156 of the Income Tax Ordinance, 2001, stipulate that the individual making the payment will charge the withholding tax from the beneficiary of the prize or rewards at the time the prize or rewards are paid. This tax is treated as final tax.
In addition to the withholding tax, prize bond winnings are also subject to income tax in Pakistan. The income tax rate on prize bond winnings varies based on the amount of winnings and the individual’s tax bracket. Generally, the income tax rate on prize bond winnings ranges from 5% to 35%.
It’s crucial to stay updated on the latest tax regulations related to prize bonds, as tax laws and rates can change over time. Individuals are advised to consult with qualified tax professionals for personalized advice on their specific tax situations. Considering the potential impact of taxes on prize bond winnings, it’s essential to carefully assess the tax implications before investing in prize bonds.
Winning Amount of Rs. 100 Prize Bond
| Position | No’s of Prizes | Prize Money | Filer Tax (15%) |
|---|---|---|---|
| 1st Winner | 1 | Rs: 700,000 | Rs. 105,000 |
| 2nd Winners | 3 | Rs: 200,000 | Rs: 30,000 |
| 3rd Winners | 1199 | Rs: 1,000 | Rs. 150 |
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