ISLAMABAD: The Federal Board of Revenue (FBR) has generated more than Rs5 billion in income tax from prize bond winnings during the first seven months (July–January) of fiscal year 2025-26.
Official figures show that the tax authority collected Rs5.02 billion during the period, slightly below the Rs5.09 billion recorded in the corresponding months of last year, reflecting a marginal decline of around 1 percent. On a monthly basis, January 2026 witnessed a 12 percent drop in collections, with Rs763 million gathered compared to Rs868 million in January 2025.
Under Section 156 of the Income Tax Ordinance, 2001, the FBR deducts advance income tax on prize bond winnings and other similar rewards. The law requires tax to be deducted from the gross amount paid on prize bonds, lotteries, raffles, quizzes, promotional prizes, and crossword contests.
In cases where the prize is awarded in non-cash form, tax is collected based on its fair market value. The amount deducted or collected is treated as final tax on such income.
Currently, prize bond and crossword puzzle winnings are taxed at 15 percent for individuals listed on the Active Taxpayers List (ATL) and 30 percent for non-ATL individuals. For raffles, lotteries, quizzes, and promotional prizes, the applicable rate is 20 percent for ATL individuals and 40 percent for those not appearing on the ATL.
The steady revenue stream from prize bond taxation highlights the FBR’s continued focus on documentation and broadening the tax net, while ensuring compliance through withholding and final tax mechanisms.
