ISLAMABAD, March 22: The Central Board of Revenue (CBR) has notified abolishing of withholding tax on bonus shares.

CBR issued a notification on Friday, saying that the deduction of withholding tax will not be applicable in respect of bonus shares issued on or after July 1, 2001 to individuals.

However, these bonus shares would continue to be taxable under the income tax law.

It may be added that in case of companies such withholding tax was not required, hence the notification removed the discrimination between an individual and companies.

The notification reads as: “the federal government is pleased to direct that the following further amendments shall be made in the second schedule to the said ordinance, namely- in the aforesaid schedule, in part IV, after clause (62), the following new clause shall be added, namely- ‘63-the provision of sub- section (6A) of section 50 shall not apply in respect of bonus shares issued on or after 1st July, 2001”.