Tax Savings for Non-Resident Pakistanis on Bank Deposits and How to Claim Them

This article explores how non-resident Pakistanis can enjoy tax exemptions on profits earned from bank deposits in Pakistan, addressing concerns about bank deductions and offering guidance on claiming these benefits.

Key Clauses for Exemption:

  • Exempts profits on foreign currency accounts held with authorized banks under the State Bank of Pakistan’s Foreign Currency Accounts Scheme.
  • Exempts profits on rupee accounts held with scheduled banks, but deposits must be exclusively from foreign exchange remitted into the account, and the account holder must possess a POC, NICOP, or CNIC.

Bank Deductions:

  • Despite exemptions, banks might still deduct 15% (filers) or 30% (non-filers) tax at source.

How to Claim Exemptions:

  1. File an Online Application: Apply for exemption online, providing:
    • Proof of non-resident status (e.g., passport, visa documents)
    • Evidence that deposits are exclusively from foreign remittances (e.g., bank statements)
  2. Obtain Exemption Certificate: The Commissioner of Income Tax will issue a certificate upon approval.
  3. Submit Certificate to Bank: Present the certificate to your bank to stop tax deductions.

Additional Notes:

  • Non-resident status must be established and maintained.
  • Deposits must be exclusively from foreign remittances.
  • Exemptions apply only to profit on debt (interest), not other charges.
  • Consult a tax advisor for personalized guidance.

Clarifications:

  • Bank deductions do not necessarily mean you’re ineligible for exemption.
  • Following the outlined steps can help claim exemptions and avoid unnecessary deductions.

By understanding these clauses and following the proper procedures, non-resident Pakistanis can maximize their financial returns while staying compliant with Pakistani tax regulations.

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