Post Office savings accounts: filers of returns will pay 10 percent WHT on profit on debt

The Federal Board of Revenue (FBR) has conveyed to the Director General Post Office that the filers of income tax returns would pay 10 percent withholding tax on profit on debt from Post Office savings accounts from July 1, 2015. In this connection, Shaukat Mahmood Director General Withholding Taxes FBR has issued instructions to Director General Post Office Islamabad here on Monday.
DG WHT FBR said that 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 the Pakistan Post Office are:- Section 151(1) (a), Profit on debt, (ie from profit on debt on Post Office savings accounts) and section 234, tax on motor vehicles (ie withholding tax along with token tax on vehicles).
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% of the gross yield paid; non- filer upto Rs.5 Lac, tax rate would be 10% of the gross yield paid and in case of other non-filers, tax rate is 17.5% of the gross yield paid.
Under section 234 (Tax on motor vehicle), in the case of goods Transport Vehicles, filer would pay tax of Rs.2.5 per kg of the laden weight and non-filer would pay tax of Rs 4 per kg of the laden weight. I(A) Transport vehicle with laden weight of 8120 kg or more after a period of ten years from the date of first registration, tax rate would be Rs 1200 per annum.
In case of passenger transport vehicles plying for hire, seating capacity of 4 or more persons but less than 10 persons, (filer) tax rate Rs.50, (non-filer) tax rate Rs.100; 10 or more persons but less than 20 persons, (filer) tax rate Rs 100, (non-filer) Rs.200 and 20 persons or more, (filer) tax rate Rs.300 and (non-filer) tax rate would be Rs.500.
Other private motor cars with engine capacity of upto 1000cc, tax rate would be Rs.800 (filers), Rs.1200 (non-filers); 1001cc to 1199cc, Rs.1,500 (filers), Rs.4,000 (non-filers); 1200cc to 1299cc, Rs.1,750 (filers), Rs.5,000 (non-filers); 1300cc to 1499cc, Rs.2,500 (filers), Rs 7,500 (non-filers); 1500cc to 1599cc, Rs.3,750 (filers), Rs.12,000 (non-filers); 1600cc to 1999cc, Rs.4,500 (filers), Rs.15,000 (non-filers) and 2000cc & above, tax rate would be Rs.10,000 (filers) and Rs.30,000 (non-filers).
In view thereof, it is requested that all the field offices/ Post Master Generals of Provinces may be directed to deduct withholding tax at the revised rates including tax u/s 151(1)(a) and u/s 234 of the Income Tax Ordinance, 2001, Shaukat Mahmood added.