Government proposes 5pc increase in tax rate on interest income
Business
Increased tax will apply to passive income sources, excluding returns from National Savings Schemes
ISLAMABAD (Dunya News) – The federal government has proposed a 5% increase in the tax rate on interest income as part of the upcoming budget, raising it from the current 15% to 20%, according to official budget documents.
The increased tax will apply to passive income sources, excluding returns from National Savings Schemes, which will remain exempt.
Additionally, the government plans to impose new taxes on online businesses. E-commerce platforms will face taxes on goods and services sold or ordered digitally.
Those conducting business through such platforms will also be required to submit monthly transaction data and tax reports.
The budget also includes a proposed 25% tax on income earned through debt instruments.
However, the tax rate on dividend income from shares will remain unchanged.
In another key measure, individuals under the age of 70 who receive high pensions will now be subject to taxation.
On the other hand, pensioners receiving low to moderate pensions will continue to be exempt.
Furthermore, a new 5% tax has been proposed on annual income exceeding Rs 10 million (Rs 1 crore), targeting high-income earners.
