Prize bond winnings in Pakistan are subject to withholding tax deducted at the time of prize payment by the State Bank of Pakistan. The rate depends on your filer status. This guide explains prize bond tax rules for 2026, which winnings are taxed, exemptions, and how to become a filer to save on prize tax.
Complete guide to tax on prize bonds in Pakistan 2026. Withholding tax rates on prize bond winnings, filer vs non-filer rates, how prizes are taxed. NTN registration from Rs. 2,000.
Are Prize Bond Winnings a Final Tax?
Yes. The WHT deducted by the State Bank of Pakistan on prize bond winnings is a final tax under Section 156 of the Income Tax Ordinance. You do not need to include prize winnings in your annual income tax return as taxable income. However, if you file a return for other reasons, you should show the prize as final-tax income.
How to Become a Filer Before Claiming Your Prize
- Check your filer status: send CNIC to 9966
- If not a filer: WhatsApp 0328-4675162 immediately
- We register your NTN and file your return same day
- ATL status activates within 3-7 days
- Wait for ATL confirmation before claiming prize
- Present ATL status proof at State Bank to get the filer rate
Timing is Critical: You must be on the ATL before claiming your prize to get the filer WHT rate. The State Bank deducts at the rate applicable on the day of payment. File early; do not wait until after you win.
Current Tax on Prize Bond and Lottery Winnings
| Prize | On the Active Taxpayers List | Not on the list |
|---|---|---|
| Prize bond winnings | 15% | 30% |
| Lottery, raffles and similar prizes | 20% | 40% |
The tax is deducted by the paying bank under section 156 when the prize is paid and is final tax.
Example
A prize of Rs 1,500,000 on a bond paid to a person on the Active Taxpayers List carries tax of Rs 225,000, leaving Rs 1,275,000. The same prize paid to a person not on the list carries Rs 450,000. The difference, Rs 225,000, is far more than the cost of filing a return before claiming the prize.
Frequently Asked Questions
What is the tax on prize bond winnings in 2026?
15% for persons on the Active Taxpayers List and 30% for others, deducted at payment as final tax.
Is lottery or raffle prize money taxed differently?
Yes. Lotteries, raffles and similar prizes are taxed at 20% for persons on the Active Taxpayers List and 40% for others.
Do I need to declare prize bond winnings in my income tax return?
The WHT on prize bond winnings is a final tax, so it does not need to be included in your taxable income in your annual return. However, if you file a return for other reasons, show the prize amount under final-tax income. The prize bond itself should be declared as an asset in your wealth statement.
Can I recover WHT paid on prize bonds?
No. Since prize bond WHT is a final tax, it cannot be refunded or offset against other income tax. The only way to minimize the tax is to ensure filer status before claiming the prize to get the lower 15% rate instead of 30%.
Do I pay tax on small prize bond wins (third prize, Rs 1,000)?
WHT is deducted on all prize payments by the State Bank. Even small prizes have WHT applied at the point of encashment. For small amounts the absolute saving from filer status is small, but filer status benefits all your other financial transactions throughout the year.
Become a Filer Before Claiming Prize - Save Lakhs
WhatsApp 0328-4675162 immediately. We file your return same day and get you on ATL in 3-7 days.
How to Declare Prize Bond Winnings in Your Tax Return
Although WHT on prize bond winnings is a final tax and does not increase your regular taxable income, you are still required to show the prize amount in your annual return under the "final tax income" category on FBR IRIS. The withholding tax certificate issued by the State Bank of Pakistan or the relevant bank branch serves as your proof of tax paid and should be retained for at least five years in case of an FBR audit.
Prize bond winnings also affect your wealth reconciliation. The net prize amount (after WHT) must be treated as income received during the year and shown in the wealth statement as an addition to your closing net worth. Failure to include it creates an unexplained increase in assets, which can trigger a notice under Section 111. If you need help declaring prize bond income correctly, WhatsApp Kamboh Associates at 0328-4675162 for same-day assistance.