Withdraw tax on widows and pensioners, Dar orders FBR

E-Paper | October 01, 2026

Withdraw tax on widows and pensioners, Dar orders FBR

Amin Ahmed Published October 20, 2017

KARACHI: A crowded National Savings Centre branch at Numaish Chowrangi. Due to limited number of branches, investors, mostly elderly, have to face great inconvenience during service of their requests.

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ISLAMABAD: The government on Thursday decided to exempt profits of National Savings’ Pensioners Benefit Account (PBA) and Behbood Savings Certificates (BSC) from the levy of 10 per cent income tax.

PBA and BSC are two National Savings schemes which cater to pensioners and widows and are exempted from withholding tax.

Chairing a meeting to review the performance of National Savings Organisation, Finance Minister Ishaq Dar instructed the Federal Board of Revenue (FBR) to take appropriate measures to remove the anomaly in tax regime which resulted in taxation of yield on PBA and BSC.

The impact on taxation of these schemes was an unintended consequence of certain legal changes introduced in the Finance Act, Mr Dar told the meeting.

Presently, holders of BSC get 9.36 per cent rate of return per annum. On an investment of Rs100,000, the profit is Rs780 per month. This rate of profit has remained unchanged since October 2016.

According to available data, the rate of return which was 14pc from January 2014 to November 2014, with per month profit of Rs1,170 declined to 9.36pc to-date.

Director-General National Savings Zafar Masud briefed the meeting on the organisation’s performance during last one year. The briefing covered progress made in areas like financial inclusion through automation, introduction of new products and improving the customer service and outreach.

The meeting was informed that National Savings has emerged as a formidable vehicle for financial inclusion with introduction of popular welfare oriented products and registering a large number of customers of which more than 50pc were women.

After successful roll out of Rs40,000 Premium Prize Bond, the Rs100,000 denomination bond is on the cards. Launch of ‘Shuhada Families Welfare Account’ and extension of BSC to disabled persons is also on the cards. Moreover, the Overseas Pakistanis Savings Certificates and Sharia-compliant products are also being considered.

Mr Masud informed the meeting that for customer facilitation, SMS service, access through social media and revamping of the institution’s website has been carried out.

He said that a complaint resolution cell has been established at the director-general’s office which disposes of public complaints on daily basis.

Published in Dawn, October 20th, 2017

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Pakistan

Amin Ahmed is an Islamabad-based correspondent for Dawn with nearly two decades of experience in the field. He reports on socio-economic development, agriculture, and privatisation, as well as parliamentary committees.

Senior citizens, widows upset about 10pc tax on NSS profits

SOCIETY: THE CRUELLEST CUT OF ALL

Move to diversify savings product base

wasif

Oct 20, 2017 09:03am

now these old chaps will pay for the luxuries of our politicians

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Syed Ahmed, Canada.

Oct 20, 2017 09:10am

Good action.

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Chairman

Oct 20, 2017 09:36am

Widows, pensioners and elderly will finance the luxuries and protocol of the elite in Pakistan. Who knows what essentials they will be forced to skip.

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Reality

Oct 20, 2017 09:59am

@wasif plz read again!

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Syed Ali

Oct 20, 2017 09:59am

Finance Minister is requested to review taxation rates on other national Saving Schemes, specially Defence Saving Certificates maturing in ten years. Due to inflation and drastically reduced return on DSC a person hardly gets enough to buy a vehicle or house after retirement. On the back of certificates rates of return are mentioned but not the with holding tax nor the with holding tax notice is exhibited in National Saving Schemes offices nor told by staff. Persons are trapped they come to know about this when they cash the certificate. There dream of saving falls apart. With holding tax should be clearly exhibited at Saving Schemes offices and written on the back of certificates.

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Fazal Karim

Oct 20, 2017 10:04am

Drastically reduction in profits in National Saving Schemes has discouraged saving by individuals which is good for the person and government.Saving habit is good for a family it should be encouraged by government.

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leoman

Oct 20, 2017 10:09am

And then the PMLN claims there is no danger to the economy as was pointed out by COAS. From Stock exchange to NSC performance, we can measure the progress of economy. however the strange thing is that the facilities of MNAs and MPAs and other Ministers like officers always increase whether economy rises or falls. Instead of showing upsurge in the profits and reduction in the taxes, they are just claiming , we are doing fine. The working of NSC is also not worth appreciation as they are unable to manage as per modern days systems and they should think of investing huge amounts of people in certain higher beneficial schemes to multiply for the sake of yielding high returns to the people .

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A concerned citizen

Oct 20, 2017 10:32am

All taxes are levied on the ones who are already being heavily taxed. What is the idea of imposing witholding tax? This can only come from the likes of Ishaq Dar who themselves are answering for corruption charges. Why should we be taxed on the income that we receive from our savings? It is better to reduce the rate of interest rather than having another tax.

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Taimur

Oct 20, 2017 10:42am

This is a very positive step. We hope that the profit on other schemes will be increased as well to encourage savings. The inflation has increased so the current profit rate is not justified.

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Anwar

Oct 20, 2017 11:56am

Mr. Finance minister cruelty never pays. Just to prove you smart you brought down the profit from 14% to 9% on BSC and 6% on SSC. Widows, pensioners and simple people who have no idea of doing business invest trillion of rupees in these schemes but they curse when they do not get reasonable profit enabling them to buy at least breads. More oppression is snatching few more hundred in face of WHT on the peanut profit. Further levying mouth watering tax (WHT) on rather big profits of large investments. Cruelty does not end here it goes on. An investor will lose his continuing profit on his investment if he can not be able to reinvest his sum after expiry of 3 years certificates. Customers have to sit for hours to get cash in hot and suffocated environment. The way of working is still as old as of 1950, the staff is surrounded in the piles of fat registers.

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Falcons

Oct 20, 2017 02:48pm

Anwar@ I agree 100% percent, look at all the V I P protocol and the cars used, shame on FBR to rob the most vernable segment of society, who can't Even make ends meet let alone buy a months supply of medicines.

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Dr. Salaria, Aamir Ahmad

Oct 20, 2017 03:30pm

Too little, too late.

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Shaukat

Oct 20, 2017 03:32pm

It is only fair to give some relief to the senior citizens of the country, that was very unfair to deduct 10% from their profits and savings. Now Mr. Dar should eliminate (Rs.600-) the withholding tax when you withdraw one lack ( Rs. 100000- ) from your account from the bank.

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Farhan

Oct 20, 2017 06:45pm

First Dar Sahib silently introduced 10% tax last year. Few pensioners who actually fill income tax returns found out at the time of filling. Now Dar Sahib is putting on a nice face that taking out 10% tax for pensioners.

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Ahsan Gul

Oct 20, 2017 07:53pm

Under extreme pressure and most likely to be indicted like his relative NS, DAR is making good gestures. Hopefully, public realizeses that these are the people who took their money overseas.

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Shireen

Oct 20, 2017 11:14pm

It is NOT fair. When seniors bought Bahbood certificates, the monthly profit could help to survive decently but with the downward slide it is real hard to make both ends meet. It won't be a big deal if by just shifting PM and his entourage's stay from top luxury hotels to not so famous hotels , some relief would be provided to pensioners and widows .

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M.Saeed

Oct 20, 2017 11:48pm

It is a real comedy of error that, a senior citizen purchases BSC investment at the age of over 60 and 10 years later when he is over 70 and purchasing power of his paltry profit on savings dwindling fast to almost half of original value due to 10 years of accumulated inflation, suddenly his BSC's become lapsed, which can now only be reinvested at less than half of the earlier rate of profit. What a generosity of the rulers to their grandfatherly old and frail people!

Recommend 0

usman78)

Oct 21, 2017 08:41am

In NSC non computerized environment one never knows how much profit earned

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M.Saeed

Oct 21, 2017 11:33am

@usman78)> The system is computerised now and on request, National savings is obliged to give a printout of the history of profits. Better get your counts transferred to a computerized branch, if not already there.

Recommend 0

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