Finance division’s clarification on ‘Taxing the poor’s savings’
July 25, 2021
ISLAMABAD: In an article, titled ‘Taxing the poor’s savings’, published in The News on July 17, 2021, Muhammad Ejaz-ul-Haq and Muhammad Tariq raised a number of concerns regarding the changes in the tax policy applicable to the income from deposits and investments.
The article is misleading as it is based on a poor understanding of benefits available under the national saving schemes (NSS) and the applicable tax regime in the country. We would restrict this response to the policy changes, introduced in the budget and would argue that the changes would have no impact on earnings of the investors in NSS.
Daily Times
June 18, 2021
The Ministry of Finance has revised profit rates on various National Savings’ schemes. According to a notification issued on Thursday, the new profit rates will be applicable immediately. The profit rate on 10-year Defence Savings Certificate has been fixed at 9.35 percent, Regular Income Certificate at 8.76 percent, and 6-month Short-Term Savings Certificate at 7.20 percent. Whereas, the profit rate on Pensioners Benefit Account, Shuhada Welfare Account, Special Savings Certificates, Behbood Savings Certificate and saving accounts will remain unchanged, the notification said. Earlier in May, the government made adjustments to returns on almost all national savings instruments with immediate effect. According to notification issued by the Ministry of Finance, the return on Shuhada’s Family Welfare Accounts and Pensioners’ Benefit Accounts had been reduced from 11.52pc to Rs11.04pc with effect from May 19, 2021. Likewise, the profit payable on Bahbood
ISLAMABAD: The government has made adjustments to returns on almost all national savings instruments with immediate effect.
According to notification issued by the Ministry of Finance, the return on Shuhada’s Family Welfare Accounts and Pensioners’ Benefit Accounts have been reduced from 11.52pc to Rs11.04pc with effect from May 19, 2021.
Likewise, the profit payable on Bahbood Savings Certificates has also been reduced from 11.52pc to 11.28pc while return on special savings certificates has been increased from 8.8pc to 9pc.
Also, the return on Defence Savings Certificates has been reduced to 7.68pc instead of about 9.52pc.
The return on Post Office Savings accounts has been set at 4pc for half year and 8pc per annum for each of the first five periods of completed six months while the return on such accounts for the last period of completed six months has been set at 4.5pc on half yearly basis or 9pc per annum.