Understanding the Taxation of Behbood Saving Certificates in Pakistan

As a Pakistani resident, it is important to be aware of the tax implications of investing in Behbood saving certificates. While there is no withholding tax at source for these certificates, they are still subject to income tax, and it is the investor’s responsibility to pay this tax on filing their income tax return. In this article, we will discuss the taxation of Behbood saving certificates and other related investments, including recent changes in tax regulations.

What are Behbood saving certificates?

Behbood saving certificates are a type of national savings certificate available to pensioners, widows, and disabled persons in Pakistan. They can be purchased for amounts ranging from Rs. 100,000 to Rs. 5,000,000 and offer competitive rates of return. While they are a popular investment option, it is important to understand their tax implications.

How are Behbood saving certificates taxed?

The tax on Behbood saving certificates is treated as income tax, and there is no withholding tax at source. This means that even if the payers of Behbood profit do not deduct tax, the investor is still liable to pay the tax. The amount of tax paid depends on the total amount of profits earned from the certificates.

It is important to note that withholding tax and income tax are two separate taxes. While withholding tax is deducted at source by the payer, income tax is the responsibility of the recipient and must be paid on filing their income tax return.

Recent changes in tax regulations

Recently, there have been changes in tax regulations that affect the taxation of profits earned from national savings certificates and other similar investments. Previously, the threshold for charging profits earned from these investments as a separate block of income was Rs. 36,000,000. If the aggregate income exceeded this amount, it was chargeable as global income by inclusion in total/taxable income.

However, the threshold has now been reduced to Rs. 5,000,000. This means that aggregate profit on debt earned from national savings certificates, deposits and accounts maintained with a banking company or financial institution, federal, provincial or local government securities, or on bonds, certificates, debentures, security or instrument of any kind issued by a banking company, financial institution or company up to Rs. 5,000,000 will be chargeable as a separate block of income. If the aggregate income exceeds Rs. 5,000,000, it will be chargeable as global income by inclusion in total/taxable income.

Additionally, the rate of tax on profit on debt chargeable as a separate block of income has been fixed at a flat rate of 15%, as opposed to earlier rates ranging from 15% to 20% depending upon the quantum of income. A new Clause (20) has been inserted in Part III of 2nd Schedule (Reduction in tax liability), which provides that the tax payable by a person, other than a banking or insurance company, in respect of profit on debt from investment in Federal Government securities shall be fifteen percent of the gross amount of the profit on debt. The tax so payable shall be the final tax on the income representing such profit on debt.


In conclusion, the taxation of Behbood saving certificates and other similar investments can be complex and subject to change. It is important to stay informed about any updates in tax regulations and understand your responsibilities as an investor. As a Pakistani resident, it is crucial to pay income tax on any profits earned from these investments, and to do so on filing your income tax return. By staying informed and taking the necessary steps, you can make the most of your investments while remaining compliant with tax laws.

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