How much more tax is deducted on bank and National Savings profit if I am not on the Active Taxpayers List?

What does the law say?

Three pieces of the Income Tax Ordinance, 2001 decide the higher rate.

1. Section 151 requires the payer to deduct tax on yield or profit from National Savings accounts and certificates, Post Office Savings Accounts, bank and financial institution deposits, Government securities and certain bonds and instruments, at the rate in Division IA of Part III of the First Schedule.
2. Section 100BA says the deduction of advance tax, and the computation of income and tax, for a person not appearing on the Active Taxpayers List is determined under the rules in the Tenth Schedule. Section 100BA(2) gives the Tenth Schedule effect “notwithstanding anything to the contrary contained in this Ordinance.”
3. Rule 1 of the Tenth Schedule says that where tax is to be deducted or collected from persons not on the list, the rate “shall be increased by hundred percent of the rate specified in” the Ordinance.

What are the rates side by side?

Division IA sets the base rates. Rule 1 doubles each one for a person not on the Active Taxpayers List.

Payment under section 151	Division IA clause	On the list	Not on the list
Profit from a bank or financial institution on an account or deposit	(a)	20%	40%
Profit on Government securities paid to a person other than an individual	(b)	20%	40%
National Savings, Post Office Savings, Government securities paid to an individual, and other cases	(c)	15%	30%

These rates apply for tax year 2027, as the Ordinance stands amended to 30 June 2026.

What happened to the old 35% rate?

Until the Finance Act, 2025, the table in rule 1 of the Tenth Schedule had a separate entry for section 151, on yield or profit on debt, at 35%. The Finance Act, 2025 omitted that serial number. With no specific entry left for section 151, the general one hundred percent increase in rule 1 applies. For bank profit, read with the 20% rate in Division IA, that produces 40%, which is higher than the old 35%.

Worked example (illustrative figures)

Two brothers in Faisalabad each earn the same profit in tax year 2027. Imran appears on the Active Taxpayers List. Kamran does not. Neither has Zakat deducted.

Bank term deposit profit of Rs. 400,000

1. Imran: 20% x Rs. 400,000 = Rs. 80,000 deducted.
2. Kamran: 40% x Rs. 400,000 = Rs. 160,000 deducted.
3. Difference: Rs. 160,000 - Rs. 80,000 = Rs. 80,000.

National Savings certificate profit of Rs. 300,000

1. Imran: 15% x Rs. 300,000 = Rs. 45,000 deducted.
2. Kamran: 30% x Rs. 300,000 = Rs. 90,000 deducted.
3. Difference: Rs. 90,000 - Rs. 45,000 = Rs. 45,000.

On total profit of Rs. 700,000, Imran has Rs. 125,000 deducted and Kamran has Rs. 250,000 deducted.

Is the extra tax lost for good?

Not necessarily. For an individual, section 7B charges tax on profit on debt from the payers listed in section 151(1)(a) to (d), and for profit within section 7B that tax is final. Section 169(4) then says that where a final tax has a hundred percent higher rate under the Tenth Schedule, “the final tax shall be the tax rate prescribed in the First Schedule”. The excess collected under the Tenth Schedule “shall be adjustable in case the return is filed before finalization of assessment as provided in rule 4 of the Tenth Schedule.”

Rule 4(3) of the Tenth Schedule says that where returns are filed before a provisional assessment, or within the time rule 4(2) allows, the tax deducted under rule 1 is adjustable against the tax payable in the return for that year. If no return is filed by the due date, rule 3 lets the Commissioner make a provisional assessment that imputes income from the tax deducted.

What if I am on the list but file late?

Section 100BA(1) refers both to persons not on the Active Taxpayers List and to persons on it who have not filed their return by the due date. A separate rule 1A, which set rates for the second group, was omitted by the Finance Act, 2026. Rule 1 as it now reads speaks of “persons not appearing in the active taxpayers’ list”. The Ordinance text does not separately say how rule 1 applies to someone on the list who files late, and this page does not decide it.

Common mistakes

• Using 35% for bank profit. That fixed entry was omitted by the Finance Act, 2025. The doubled Division IA rate applies instead.
• Assuming National Savings profit is doubled to 40%. It starts from the 15% rate in clause (c) of Division IA, so the doubled rate is 30%.
• Assuming the extra deduction is automatically final. Section 169(4) treats the First Schedule rate as the final tax and makes the excess adjustable when a return is filed in time.

What to check in the official text

Read sections 100BA, 151, 7B and 169(4), rules 1, 3 and 4 of the Tenth Schedule, and Division IA of Part III of the First Schedule in the source PDF, since our site copy does not reproduce the schedules as tables. How a person gets onto the Active Taxpayers List is regulated as the Board prescribes, and the list itself is not part of this corpus.