Tax on Prize Bond Winnings in Pakistan (TY 2025-26)
Pakistan prize bond tax TY 2025-26 - Section 156 final tax 15% filer / 30% non-filer, claim process, KYC compliance, and IRIS declaration tips.
Worked example: Rs 1,500,000 per month
Annual income Rs 18,000,000 - here's how it would be taxed both ways under Finance Act 2025.
| Taxable income band | Rate | Income in band | Tax in band |
|---|---|---|---|
| Up to Rs 600,000 | 0% | Rs 600,000 | Rs 0 |
| Rs 600,001 – Rs 1,200,000 | 15% | Rs 600,000 | Rs 90,000 |
| Rs 1,200,001 – Rs 1,600,000 | 20% | Rs 400,000 | Rs 80,000 |
| Rs 1,600,001 – Rs 3,200,000 | 30% | Rs 1,600,000 | Rs 480,000 |
| Rs 3,200,001 – Rs 5,600,000 | 40% | Rs 2,400,000 | Rs 960,000 |
| Above Rs 5,600,000 | 45% | Rs 12,400,000 | Rs 5,580,000 |
| Total slab tax | Rs 7,190,000 | ||
Section 156 final tax on prize bond wins
Prize bond winnings in Pakistan are taxed under Section 156 of the Income Tax Ordinance - 15% for filers on the Active Taxpayer List, 30% for non-filers. The tax is deducted at source by the State Bank / Central Directorate of National Savings before the prize money is paid out. It is final tax - you cannot offset losses, claim it as advance against your slab, or get a refund. The tax is done and dusted at the moment of payout.
The ATL premium on prize wins
Winning PKR 1.5 million on a Rs 750 bond series sounds great until the tax slice. A filer pays PKR 225,000 (15%) and walks away with PKR 1,275,000. A non-filer pays PKR 450,000 (30%) and walks away with PKR 1,050,000. That single deduction - PKR 225,000 - is more than most people spend on a year of filing fees and ATL maintenance. If you hold prize bonds, filing your annual return on time is one of the highest-ROI tax moves available.
KYC, CNIC, and the demonetisation story
After Pakistan demonetised the Rs 7,500, Rs 15,000, Rs 25,000, and Rs 40,000 bearer-form prize bonds in 2019, most prize bonds remaining in circulation are smaller denominations or the registered (Premium) series. To claim a prize, you must present your bond physically (or in dematerialised form via the National Savings centre), provide your CNIC, and complete KYC. The prize money lands in your bank account net of the Section 156 deduction. Bearer-bond winners can no longer claim anonymously.
Declaring prize wins on IRIS
Even though it's final tax, declare prize bond winnings on your annual return under code 7033 (Final/Fixed Tax inflows). The Section 156 deduction appears under tax-deducted-at-source. Declaring the win is essential for wealth-statement reconciliation - a six- or seven-figure prize without a corresponding income declaration creates an unexplained-wealth gap. The exemption of the income from slab tax does not mean exemption from declaration.
Frequently asked questions
How are prize bond winnings taxed in Pakistan?
Under Section 156 as final tax - 15% for ATL filers, 30% for non-filers. Deducted at source by the State Bank / Central Directorate of National Savings before payout.
Can I claim a refund on prize bond tax?
No. Section 156 is final tax - you cannot offset losses, claim it as advance, or get a refund. The deduction is settled at the moment of payout.
Do I have to declare prize money on my IRIS return?
Yes under code 7033 (Final/Fixed Tax inflows). Declaration supports wealth-statement reconciliation; skipping it creates an unexplained-wealth gap that triggers audits.
Are smaller prize bond wins also taxed at 15%?
Yes. Section 156 applies uniformly - every prize, no minimum. The 15%/30% deduction is taken from every winning bond regardless of denomination or amount.
Does ATL status really matter for prize bonds?
Yes - non-filers pay double the tax (30% vs 15%). A single seven-figure win for a non-filer can cost more in tax than a decade of filing fees and ATL maintenance.