Tax on Bank Profit in Pakistan 2026 - Savings Account Interest Tax

Bank profit (also called "profit on debt") earned on savings accounts, fixed deposits, and government securities is taxable in Pakistan. Banks deduct withholding tax at source, but you must still declare this income in your annual tax return — and the rate doubles if you are a non-filer.

Withholding Tax Rates on Bank Profit — 2026

Account Holder Status	WHT Rate	Tax Treatment
Active Filer	15%	Adjustable (can claim refund if over-deducted)
Non-Filer	30%	Final tax (no refund possible)
Senior Citizen (60+, filer)	10%	Reduced rate if declared in return
Profit below Rs. 500,000/year	0%	Exempt if you submit exemption certificate

Important: For filers, bank profit WHT is "adjustable" — meaning if your total tax liability turns out less than the WHT deducted, you can claim a refund in your return. For non-filers, the 30% is final and cannot be refunded.

What Counts as "Profit on Debt"

FBR taxes the following under Section 7B as profit on debt:

Interest/profit on savings accounts and current accounts
Profit on fixed deposits and term deposits
Profit on National Savings Certificates (DSC, SSC, RIC)
Yield on Treasury Bills (T-Bills) and Pakistan Investment Bonds (PIBs)
Profit on Roshan Digital Account (non-resident exemption applies)

How to Declare Bank Profit in Your Tax Return

Step	Action	Where
1	Download profit certificate from your bank (or check IRIS pre-fill)	Bank app / branch / IRIS portal
2	Enter gross profit amount (before WHT deduction)	IRIS → Income from Other Sources → Profit on Debt
3	Enter WHT already deducted by bank	IRIS → Withholding Tax Credits
4	Include bank balance in wealth statement	IRIS → Assets → Bank Accounts
5	File return before September 30	iris.fbr.gov.pk

Exemption on Bank Profit — Section 7B

If your total profit on debt from all banks combined is below Rs. 500,000 per year, you can claim exemption by submitting a declaration to the bank. Steps:

Fill Form W (declaration of non-deduction) available at your bank
Submit at branch — bank will stop deducting WHT going forward
This exemption is only valid if your total annual income (all sources) is below the taxable threshold
Senior citizens above 60: FBR allows reduced 10% rate with return filing

Bank Profit and Wealth Statement

Beyond declaring income, bank accounts must also appear in your wealth statement:

Declare closing balance of all bank accounts as of June 30
Include balance in Islamic accounts, savings and current accounts
National Savings amounts must also be declared separately
Unexplained increase in bank balance triggers FBR Section 111 notices

Frequently Asked Questions

My bank already deducted 15% WHT — do I still need to file a return?

Yes. Deduction of WHT does not replace your filing obligation. You must declare the income and the WHT in your return. For filers, this may generate a refund if your overall liability is lower. Non-filers also need to file to become active filers and reduce their rate to 15%.

Is profit on Islamic savings accounts (Mudaraba) also taxable?

Yes. FBR treats profit on Islamic banking products (murabaha, mudaraba returns) the same as conventional interest under Section 7B. Banks deduct WHT at the same rates. It must be declared in your return.

I have accounts in multiple banks. How do I get all the profit data?

Each bank issues a separate profit certificate (often called "WHT certificate" or "Annual Tax Deduction Statement"). Collect from each bank at year end. Alternatively, log into IRIS — some banks auto-report to FBR and data appears pre-filled under withholding credits.

Claim Your Bank WHT Refund

Many filers overpay bank profit tax. We check your withholding credits and claim refunds where applicable.

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