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Thursday, November 7, 2024

You Won’t Believe It! Government Imposes 20% Levy on Prize Bonds and Lottery Winnings

New tax measures in Pakistan impact prize bonds and lottery winnings, with varying rates for Sukuk investments.

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  • Pakistan’s new tax measures impose a 15% tax on prize bonds and a 20% tax on lottery winnings.
  • Tax rates for Sukuk investments differ based on the amount and type of investor.
  • Individual investors in Sukuks with returns under Rs1 million face a 10% tax, while companies face a 25% tax.

Pakistan has rolled out new tax measures affecting prize bonds and lottery winnings under the Finance Bill 2024. According to the updated regulations, holders of prize bonds will now be taxed at a uniform rate of up to 15%, while those winning from lotteries will face a higher tax rate of 20%.

The new bill also introduces varying tax rates for Sukuk investments based on the amount and type of investor. Individuals and Associations of Persons (AOPs) investing in Sukuks with returns under Rs1 million will be taxed at 10%. Conversely, companies and other entities will face a higher tax rate of 25% on these investments.

For returns exceeding Rs1 million, the tax rate for individuals and AOPs will be set at 12.5%, whereas companies will continue to be taxed at 25%. These changes aim to streamline taxation on financial gains and align with broader fiscal policies.

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