FBR Imposes WHT on Profit From Saving Certificates

The Federal Board of Revenue (FBR) has imposed a withholding tax of 15% on filers and 30% on non-filers on the profit from saving certificates.

The withholding tax will apply to different National Savings Schemes (NSS) programs except for Bahbood Savings Certificates and Pensioner Benefits Account.


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According to the Central Directorate of National Savings (CDNS), the FBR has revised the withholding tax on profit from saving certificates with effect from 1 July 2021 under the Finance Act 2021.

The FBR’s decision will put an additional financial burden on small NSS investors who are not on the active taxpayers’ list (ATL).

Around 99% of small NSS investors are non-filers because they do not exist on ATL as their annual profit is less than Rs. 500,000. However, they will be required to pay 30% on the profit from saving certificates each month irrespective of their investment limit.

Previously, the withholding tax was 10% for filers and 20% for non-filers on profit up to Rs. 500,000 while the withholding tax was 15% for filers and 30% for non-filers on profit exceeding Rs. 500,000.


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Investment in NSS has been decreasing over time as CDNS recorded an outflow of Rs. 86 billion during the first nine months of FY 20-21 against the net inflow of Rs. 258 billion during the same period in FY 19-20.

One of the reasons behind declining NSS investment is that the government had suspended all kinds of institutional funds last July, resulting in the encashment of all maturing funds.

Another reason is the discontinuation of prize bonds of Rs. 40,000, Rs. 25,000, Rs. 15,000, and Rs. 7,500 which also resulted in heavy encashment.

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