Tax collection on profit from bank deposits registers 11pc growth during first nine months of FY21

KARACHI: Withholding income tax collection from profit on bank deposits registered 11 percent growth to Rs54.55 billion during first nine months (July – March) 2020/2021, sources said .

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The collection of withholding tax from profit on bank deposits was Rs49 billion in the nine months of the last fiscal year, officials at Regional Tax Office (RTO) –I Karachi said.

The RTO-I Karachi, is a revenue collection arm of the Federal Board of Revenue (FBR), has mandate to collect the withholding tax on profit from debt on bank deposits under Section 151 of the Income Tax Ordinance, 2001.

The rate of tax to be deduction under section is 15 percent of the yield or profit. In case person is not on the Active Taxpayers List (ATL) the tax rate shall be increased by 100 percent.

The officials attributed the rise in tax collection to massive increase in bank deposits.

The bank deposits have reached to record high at Rs17.9 trillion by end of March 2021. The deposits of banking system increased by 18.38 percent as the total deposits were at Rs15.12 trillion by end March 2020.