Profit on Debt or Interest Income.
Profit on Debt or Interest Income is treated as income from other source as per section 39 of income tax ordinance 2001.
“Profit on Debt” whether it is payable or receivable means the following:
• Any profit, yield, discount, interest, premium or other amount, owing under a debt other than a return of capital.
• Any Service charge or fee or other charge in respect of a debt, including any fee or charge incurred in respect of a credit facility which has not been utilized.
Tax Chargeability – Section 39 and 7B
• Profit on debt or Interest Income not exceeding Rs 5 Million is subject to 15% Tax chargeable as under Final Tax Regime in the hand of the recipient in case of Individual or Association of Persons AOP.
• Profit on debt or Interest Income exceeding Rs 5 Million is subject to 29% Tax chargeable as under Normal Tax Regime in the hand of the recipient in case of Individual or Association of Persons AOP.
• Profit on debt or Interest Income is subject to 29% Tax chargeable as Normal Tax Regime in the hand of the recipient in case of Company.
Withholding Tax Obligation – Section 151
• At the time of payment, payer will be responsible to withhold tax at the rate of 15% in any case.
Tax rates on Profit on debt, other income, Services including NTN registration and Sales Tax Registration, STRN registration, SECP company registration and annual compliance, Tax Compliance Services and Tax Return Service, Corporate consultancy, Tax saving and Refund, tax advisory, tax audit, tax litigation etc, you may contact E-Tax Consultants.
