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Importing pharmaceutical products carries an 8% tax for Non-Filers, which is exactly double the 4% rate applied to Active Taxpayers. • Providing IT and IT-enabled services costs Active Taxpayers just 4% in withholding tax, while Non-Filers must pay 8%. • Profits on debt from mutual funds deriving 50% or more income from debt carry a huge 50% tax for Non-Filers, compared to 25% for Filers. • Cash withdrawals by a person whose name does not appear on the Active Taxpayers’ List are hit with an automatic 0.8% advance tax. • The sale of petroleum products is taxed at 12% for Filers and exactly double that at 24% for Non-Filers. • Salaries under Rs. 600,000 are completely tax-free, maintaining a 0% rate regardless of your taxpayer status. • Buyers of 1301cc to 1600cc cars pay a 2% advance tax if they are Filers, but Non-Filers pay exactly triple at 6%. • Commercial importers bringing in Part-III items are hit with a 12% tax rate if they are Non-Filers, compared to only 6% for Active Filers. • Registering a 1000cc motor vehicle costs Filers just 1% in tax, while Non-Filers are penalized with a 3% tax. • The withholding tax on banking and financial institution profits is set at 20% for those on the Active Taxpayers’ List, but jumps to 40% for those off the list. • Dividends from Real Estate Investment Trusts (REITs) and general companies cost Active Filers 15% in tax, but Non-Filers lose a massive 30%. • Payments made to non-resident sportspersons incur a 15% tax if they are on the ATL, and a massive 30% if they are non-ATL. • Active Filers importing CKD kits for Electric Vehicles pay a minimal 1% tax, whereas Non-Filers pay double at 2%. • Registering a 2001cc to 2500cc luxury vehicle incurs a 7% tax for Active Filers, but a staggering 21% tax for Non-Filers. • Winning a prize bond or crossword puzzle means you lose 15% to taxes as an Active Filer, but a massive 30% if you are a Non-Filer. • If you receive dividends from Independent Power Purchasers (IPPs), Filers pay a 7.5% tax while Non-Filers surrender 15%. • Importing basic goods from Part-I of the Twelfth Schedule costs Active Taxpayers just 1% in tax, while Non-Filers have to pay 2%. • Payments to electronic and print media for advertising services are taxed at just 1.5% for Active Taxpayers, compared to 3% for Non-Filers. • Purchasing a 1601cc to 1800cc vehicle will cost Non-Filers a 9% tax, which is three times the 3% rate given to Active Filers. • Companies generating rental income from immovable property pay a 15% tax if they are Active Filers, but face a 30% rate as Non-Filers. • Winning a raffle, lottery, or sales promotion prize costs Non-Filers a whopping 40% in tax, compared to 20% for Filers. • Commercial importers of Part-II goods face a 3.5% withholding tax if they are Filers, but the rate doubles to 7% for Non-Filers. • Selling rice, cotton seed, or edible oils comes with a low 1.5% tax for Filers, but a 3% tax for Non-Filers. • Buying a high-end 2501cc to 3000cc vehicle leaves Filers with a 9% tax bill, but absolutely punishes Non-Filers with a massive 27% tax rate. • Capital gains arising on the disposal of certain debt securities are taxed at 15% for Filers, but double to 30% for Non-Filers. • Pensions under 10 million rupees remain 100% tax-exempt for everyone, no matter what your filing status is. • Importing pharmaceutical products carries an 8% tax for Non-Filers, which is exactly double the 4% rate applied to Active Taxpayers. • Providing IT and IT-enabled services costs Active Taxpayers just 4% in withholding tax, while Non-Filers must pay 8%. • Profits on debt from mutual funds deriving 50% or more income from debt carry a huge 50% tax for Non-Filers, compared to 25% for Filers. • Cash withdrawals by a person whose name does not appear on the Active Taxpayers’ List are hit with an automatic 0.8% advance tax. • The sale of petroleum products is taxed at 12% for Filers and exactly double that at 24% for Non-Filers. • Salaries under Rs. 600,000 are completely tax-free, maintaining a 0% rate regardless of your taxpayer status. • Buyers of 1301cc to 1600cc cars pay a 2% advance tax if they are Filers, but Non-Filers pay exactly triple at 6%. • Commercial importers bringing in Part-III items are hit with a 12% tax rate if they are Non-Filers, compared to only 6% for Active Filers. • Registering a 1000cc motor vehicle costs Filers just 1% in tax, while Non-Filers are penalized with a 3% tax. • The withholding tax on banking and financial institution profits is set at 20% for those on the Active Taxpayers’ List, but jumps to 40% for those off the list. • Dividends from Real Estate Investment Trusts (REITs) and general companies cost Active Filers 15% in tax, but Non-Filers lose a massive 30%. • Payments made to non-resident sportspersons incur a 15% tax if they are on the ATL, and a massive 30% if they are non-ATL. • Active Filers importing CKD kits for Electric Vehicles pay a minimal 1% tax, whereas Non-Filers pay double at 2%. • Registering a 2001cc to 2500cc luxury vehicle incurs a 7% tax for Active Filers, but a staggering 21% tax for Non-Filers. • Winning a prize bond or crossword puzzle means you lose 15% to taxes as an Active Filer, but a massive 30% if you are a Non-Filer. • If you receive dividends from Independent Power Purchasers (IPPs), Filers pay a 7.5% tax while Non-Filers surrender 15%. • Importing basic goods from Part-I of the Twelfth Schedule costs Active Taxpayers just 1% in tax, while Non-Filers have to pay 2%. • Payments to electronic and print media for advertising services are taxed at just 1.5% for Active Taxpayers, compared to 3% for Non-Filers. • Purchasing a 1601cc to 1800cc vehicle will cost Non-Filers a 9% tax, which is three times the 3% rate given to Active Filers. • Companies generating rental income from immovable property pay a 15% tax if they are Active Filers, but face a 30% rate as Non-Filers. • Winning a raffle, lottery, or sales promotion prize costs Non-Filers a whopping 40% in tax, compared to 20% for Filers. • Commercial importers of Part-II goods face a 3.5% withholding tax if they are Filers, but the rate doubles to 7% for Non-Filers. • Selling rice, cotton seed, or edible oils comes with a low 1.5% tax for Filers, but a 3% tax for Non-Filers. • Buying a high-end 2501cc to 3000cc vehicle leaves Filers with a 9% tax bill, but absolutely punishes Non-Filers with a massive 27% tax rate. • Capital gains arising on the disposal of certain debt securities are taxed at 15% for Filers, but double to 30% for Non-Filers. • Pensions under 10 million rupees remain 100% tax-exempt for everyone, no matter what your filing status is. •

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Importing basic goods from Part-I of the Twelfth Schedule costs Active Taxpayers just 1% in tax, while Non-Filers have to pay 2%. • Payments made to non-resident sportspersons incur a 15% tax if they are on the ATL, and a massive 30% if they are non-ATL. • Capital gains arising on the disposal of certain debt securities are taxed at 15% for Filers, but double to 30% for Non-Filers. • Registering a 2001cc to 2500cc luxury vehicle incurs a 7% tax for Active Filers, but a staggering 21% tax for Non-Filers. • Dividends from Real Estate Investment Trusts (REITs) and general companies cost Active Filers 15% in tax, but Non-Filers lose a massive 30%. • The withholding tax on banking and financial institution profits is set at 20% for those on the Active Taxpayers’ List, but jumps to 40% for those off the list. • Cash withdrawals by a person whose name does not appear on the Active Taxpayers’ List are hit with an automatic 0.8% advance tax. • Selling rice, cotton seed, or edible oils comes with a low 1.5% tax for Filers, but a 3% tax for Non-Filers. • Purchasing a 1601cc to 1800cc vehicle will cost Non-Filers a 9% tax, which is three times the 3% rate given to Active Filers. • Registering a 1000cc motor vehicle costs Filers just 1% in tax, while Non-Filers are penalized with a 3% tax. • Active Filers importing CKD kits for Electric Vehicles pay a minimal 1% tax, whereas Non-Filers pay double at 2%. • Winning a prize bond or crossword puzzle means you lose 15% to taxes as an Active Filer, but a massive 30% if you are a Non-Filer. • Salaries under Rs. 600,000 are completely tax-free, maintaining a 0% rate regardless of your taxpayer status. • Profits on debt from mutual funds deriving 50% or more income from debt carry a huge 50% tax for Non-Filers, compared to 25% for Filers. • Commercial importers of Part-II goods face a 3.5% withholding tax if they are Filers, but the rate doubles to 7% for Non-Filers. • Buying a high-end 2501cc to 3000cc vehicle leaves Filers with a 9% tax bill, but absolutely punishes Non-Filers with a massive 27% tax rate. • Commercial importers bringing in Part-III items are hit with a 12% tax rate if they are Non-Filers, compared to only 6% for Active Filers. • Pensions under 10 million rupees remain 100% tax-exempt for everyone, no matter what your filing status is. • The sale of petroleum products is taxed at 12% for Filers and exactly double that at 24% for Non-Filers. • Providing IT and IT-enabled services costs Active Taxpayers just 4% in withholding tax, while Non-Filers must pay 8%. • Payments to electronic and print media for advertising services are taxed at just 1.5% for Active Taxpayers, compared to 3% for Non-Filers. • Importing pharmaceutical products carries an 8% tax for Non-Filers, which is exactly double the 4% rate applied to Active Taxpayers. • Winning a raffle, lottery, or sales promotion prize costs Non-Filers a whopping 40% in tax, compared to 20% for Filers. • If you receive dividends from Independent Power Purchasers (IPPs), Filers pay a 7.5% tax while Non-Filers surrender 15%. • Buyers of 1301cc to 1600cc cars pay a 2% advance tax if they are Filers, but Non-Filers pay exactly triple at 6%. • Companies generating rental income from immovable property pay a 15% tax if they are Active Filers, but face a 30% rate as Non-Filers. • Importing basic goods from Part-I of the Twelfth Schedule costs Active Taxpayers just 1% in tax, while Non-Filers have to pay 2%. • Payments made to non-resident sportspersons incur a 15% tax if they are on the ATL, and a massive 30% if they are non-ATL. • Capital gains arising on the disposal of certain debt securities are taxed at 15% for Filers, but double to 30% for Non-Filers. • Registering a 2001cc to 2500cc luxury vehicle incurs a 7% tax for Active Filers, but a staggering 21% tax for Non-Filers. • Dividends from Real Estate Investment Trusts (REITs) and general companies cost Active Filers 15% in tax, but Non-Filers lose a massive 30%. • The withholding tax on banking and financial institution profits is set at 20% for those on the Active Taxpayers’ List, but jumps to 40% for those off the list. • Cash withdrawals by a person whose name does not appear on the Active Taxpayers’ List are hit with an automatic 0.8% advance tax. • Selling rice, cotton seed, or edible oils comes with a low 1.5% tax for Filers, but a 3% tax for Non-Filers. • Purchasing a 1601cc to 1800cc vehicle will cost Non-Filers a 9% tax, which is three times the 3% rate given to Active Filers. • Registering a 1000cc motor vehicle costs Filers just 1% in tax, while Non-Filers are penalized with a 3% tax. • Active Filers importing CKD kits for Electric Vehicles pay a minimal 1% tax, whereas Non-Filers pay double at 2%. • Winning a prize bond or crossword puzzle means you lose 15% to taxes as an Active Filer, but a massive 30% if you are a Non-Filer. • Salaries under Rs. 600,000 are completely tax-free, maintaining a 0% rate regardless of your taxpayer status. • Profits on debt from mutual funds deriving 50% or more income from debt carry a huge 50% tax for Non-Filers, compared to 25% for Filers. • Commercial importers of Part-II goods face a 3.5% withholding tax if they are Filers, but the rate doubles to 7% for Non-Filers. • Buying a high-end 2501cc to 3000cc vehicle leaves Filers with a 9% tax bill, but absolutely punishes Non-Filers with a massive 27% tax rate. • Commercial importers bringing in Part-III items are hit with a 12% tax rate if they are Non-Filers, compared to only 6% for Active Filers. • Pensions under 10 million rupees remain 100% tax-exempt for everyone, no matter what your filing status is. • The sale of petroleum products is taxed at 12% for Filers and exactly double that at 24% for Non-Filers. • Providing IT and IT-enabled services costs Active Taxpayers just 4% in withholding tax, while Non-Filers must pay 8%. • Payments to electronic and print media for advertising services are taxed at just 1.5% for Active Taxpayers, compared to 3% for Non-Filers. • Importing pharmaceutical products carries an 8% tax for Non-Filers, which is exactly double the 4% rate applied to Active Taxpayers. • Winning a raffle, lottery, or sales promotion prize costs Non-Filers a whopping 40% in tax, compared to 20% for Filers. • If you receive dividends from Independent Power Purchasers (IPPs), Filers pay a 7.5% tax while Non-Filers surrender 15%. • Buyers of 1301cc to 1600cc cars pay a 2% advance tax if they are Filers, but Non-Filers pay exactly triple at 6%. • Companies generating rental income from immovable property pay a 15% tax if they are Active Filers, but face a 30% rate as Non-Filers. •

Tax on Bahbood Saving Certificates (2025) in Pakistan – Comprehensive Guide

The Federal Board of Revenue (FBR) has initiated the issuance of notices to individuals, businesses, and Associations of Persons (AOPs) concerning advance tax payments. A significant focus is on the advance tax on profits earned from investments in Bahbood Saving Certificates (BSC).

The Federal Board of Revenue (FBR) has initiated the issuance of notices to individuals, businesses, and Associations of Persons (AOPs) concerning advance tax payments. A significant focus is on the advance tax on profits earned from investments in Bahbood Saving Certificates (BSC).

For investors in BSC, understanding tax obligations, including quarterly advance tax payments, is crucial. This guide provides an in-depth look at Bahbood Saving Certificates, their features, eligibility criteria, and the associated tax implications.

What are Bahbood Saving Certificates?

Behbood Saving Certificates (BSC) are specialized savings instruments introduced by the Government of Pakistan in 2003 to provide financial support to vulnerable segments of society, including senior citizens, widows, and individuals with disabilities. These certificates offer a secure investment avenue with attractive profit rates and tax benefits.

Key Features of Bahbood Saving Certificates

Profit Rate: As of April 2025, BSCs offer a competitive profit rate of 15.36% per annum, providing a consistent monthly return of Rs. 1,280 for every Rs. 100,000 invested.
Profit Payment: Profits are disbursed on a monthly basis, commencing from the date of purchase.
Investment Limits:
- Individual Investors: Maximum investment limit of Rs. 7.5 million.
- Joint Investors: Maximum investment limit of Rs. 15 million.
Denominations Available: Rs. 5,000, Rs. 10,000, Rs. 50,000, Rs. 100,000, Rs. 500,000, and Rs. 1,000,000.
Tax Benefits:
- Exempt from Withholding Tax: No tax is deducted at source on profits earned.
- Exempt from Zakat: Investments are not subject to Zakat deductions.
Security: Backed by the Government of Pakistan, ensuring a risk-free investment.

Who Can Invest in Bahbood Saving Certificates?

Bahbood Saving Certificates are tailored for specific segments of the population:

Senior Citizens: Individuals aged 60 years or above.
Widows: Unmarried widows who have not remarried.
Persons with Disabilities: Individuals holding a Computerized National Identity Card (CNIC) with a disability logo.
Special Minors: Minors with disabilities, through their guardians.
Joint Accounts: Two eligible individuals (e.g., two senior citizens or a senior citizen and a widow) can open a joint account.

Taxation of Bahbood Saving Certificates

Understanding the tax treatment of BSC profits is essential for compliance and financial planning.

Tax Treatment

Normal Tax Regime (NTR): Profits from BSCs are taxed under the Normal Tax Regime, not under Section 7B of the Income Tax Ordinance.
Tax Rate: A maximum tax rate of 5% applies to BSC profits, regardless of the profit amount.
No Withholding Tax: Unlike bank deposits, BSC profits are not subject to withholding tax at the source.
Exemption from Zakat: Investments in BSCs are exempt from Zakat deductions.

FBR taxes Profit on debt or Bank Profits with different rates other than Behbood Certificates, for both individuals and businesses receiving income from investments and deposits.

Advance Tax Applicability on Bahbood Saving Certificates

Advance tax under Section 147 of the Income Tax Ordinance may apply based on the investor’s total taxable income.

When is Advance Tax Applicable?

Total Taxable Income Below Rs. 1 Million: No advance tax is payable if the total taxable income, including BSC profits, is less than Rs. 1 million annually.
Total Taxable Income Exceeds Rs. 1 Million: Advance tax becomes payable if the total taxable income, from all sources including BSC profits, exceeds Rs. 1 million annually.

Calculation of Advance Tax

Advance tax is calculated as follows:

Advance Tax Per Quarter = (Tax Assessed for Previous Year) ÷ 4

This ensures that tax liability is evenly distributed across the year, aligning with estimated income.

Practical Examples

Example 1: An individual earns Rs. 800,000 from BSC profits annually. Since the total taxable income is below Rs. 1 million, no advance tax is payable.
Example 2: An individual earns Rs. 800,000 from rental income and Rs. 300,000 from BSC profits, totaling Rs. 1.1 million. As the total taxable income exceeds Rs. 1 million, advance tax is payable.

Benefits of Investing in Bahbood Saving Certificates

Attractive Profit Rates: Offers a competitive return of 15.36% per annum, providing a stable monthly income.
Tax Advantages: Exempt from withholding tax and Zakat, with a maximum tax rate of 5% on profits.
Secure Investment: Backed by the Government of Pakistan, ensuring safety of principal and returns.
Financial Inclusion: Designed to support senior citizens, widows, and individuals with disabilities, promoting financial independence.

How to Invest in Bahbood Saving Certificates

Investors can purchase BSCs through the following steps:

Visit a National Savings Center (NSC): Obtain and fill out the SC-1 application form.
Submit Required Documents:
- Senior Citizens: Copy of CNIC.
- Widows: CNIC, husband’s death certificate, and an affidavit confirming non-remarriage.
- Persons with Disabilities: CNIC with disability logo.
- Special Minors: Guardian’s CNIC and minor’s disability certificate.
Choose Investment Amount: Select the desired denomination and investment amount, adhering to the investment limits.
Submit Application: Submit the completed application form and documents at the NSC.
Receive Certificate: Upon verification, the BSC will be issued, and profit payments will commence from the date of purchase.

Conclusion

Bahbood Saving Certificates offer a secure and profitable investment avenue for senior citizens, widows, and individuals with disabilities in Pakistan. With attractive profit rates, tax exemptions, and government backing, BSCs provide financial stability and independence to eligible investors.

However, it’s essential for investors to understand the tax implications, especially concerning advance tax under Section 147, to ensure compliance and avoid potential penalties.

For personalized advice and assistance, consulting a qualified tax advisor is recommended.

Muhammad Ebrahim

Intern at TaxationPk, actively contributing to various taxation-related projects. Continuously learning and gaining hands-on experience, bringing enthusiasm and a fresh perspective to the team.

Articles: 46

6 Comments

Ihsan Ul Haq

August 23, 2025 / 3:49 pm Reply

Assalam-O-Alaikum! From July 2024 to June 2025, I earned Profit Rs.828000/- from PBA and Rs.414000/- from BSC as Joint Account with my wife from National Savings. Do I have to pay with holding tax on that and if so at what rates and what will be the procedure to pay that because NSC did not deducted that. Please advise. Thank you
- Hayat Akbar
  
  August 24, 2025 / 12:03 am Reply
  
  BSCs income are required to pay advance tax as explained in the article if income is above 1 million rupees per year. Taxes on Profit are 5% per year. You can refer back to the article to understand how to calculate your taxes.
Ameena

August 5, 2025 / 11:35 am Reply

Is it halal?
- Hayat Akbar
  
  August 5, 2025 / 3:34 pm Reply
  
  Yes
Shaukat Rabbani

April 5, 2025 / 11:06 am Reply

I am a pensioner. I have some investment in mutual fund since Oct 2024 where CGT will be deducted. Then I have Pensioner Benefit Acct in National Savings with my wife as joint holder. Further I have Behbood certificates on my name only. In current FY, I expect my income as under:
Mutual Funds (Joint) Approx 1 Million
PBA (Total) Approx 960,000
BSC Approx 700,000
I am paying withholding tax on different utility bills.
Please educate me on my tax liability with reference to when be filing of next return
- Binte Zafar
  
  April 5, 2025 / 11:29 am Reply
  
  Filing will be done from July to September 2025.
  keep record of all the financial transactions and you will be able file tax returns easily.
  You can also reach at WhatsApp number for further queries.
  
  Related Article: https://insights.taxationpk.com/income-tax-filing-in-pakistan/
  https://insights.taxationpk.com/how-to-calculate-tax-on-bank-profits/

Tax on Bahbood Saving Certificates (2025) in Pakistan – Comprehensive Guide

What are Bahbood Saving Certificates?

Key Features of Bahbood Saving Certificates

Who Can Invest in Bahbood Saving Certificates?