Winning prize bond? Here’s how much tax you’ll pay

ISLAMABAD: Pakistan’s Prize Bond Scheme offers a unique investment opportunity for individuals seeking a secure and accessible form of savings.

Available in six denominations ranging from Rs100 to Rs40,000, these bonds can be purchased at designated State Bank of Pakistan branches and National Savings Centres across the country.

As bearer instruments, prize bonds ensure anonymity, making them an attractive option for those valuing privacy.

The scheme provides an exciting opportunity for individuals to win substantial cash prizes through regular draws held throughout the year. The draw process is transparent, conducted by a committee constituted by the Central Directorate of National Savings (CDNS), and open to the general public.

Winning prize bonds are drawn through a Hand Operated Draw Machine, operated by special children in front of committee members and the general public, ensuring a fair process.

It is essential to understand the tax implications on prize money. Holding Tax (WHT) is deducted under Section 156 of the Income Tax Ordinance 2001, with prevailing rates of 15% for filers and 30% for persons not appearing in the Active Taxpayers List, irrespective of the date of draw.

Additionally, there is a specific time to claim prize bond award money, which can be found on the official website or by contacting the relevant authorities.

Overall, Pakistan’s Prize Bond Scheme offers a secure and exciting investment opportunity for individuals looking for a low-risk investment with the potential for significant returns.

By understanding the tax implications and claim process, individuals can make informed investment decisions and enjoy the benefits of this unique savings instrument.