Behbood Certificate Tax Creates Confusion For Small Businesses

Islamabad: The Union of Small and Medium Enterprises (UNISAME) is demanding immediate clarification from the Federal Board of Revenue (FBR) regarding the taxation of income derived from Behbood Savings Certificates (BSC) for the 2024-25 tax year.

UNISAME President, Zulfikar Thaver, highlighted the ambiguity in existing FBR notifications, causing widespread confusion among taxpayers struggling to calculate their tax liability accurately. This uncertainty specifically impacts BSC holders with other income streams and those whose total income from other sources surpasses Rs. 5 million.

The lack of clarity affects how these individuals determine their applicable tax rate on BSC earnings. UNISAME experts, after consulting various tax professionals, found differing interpretations on the correct calculation process. Even inquiries to artificial intelligence platforms suggested a maximum 10% tax liability, a seemingly reasonable rate.

However, some tax advisors are suggesting that BSC income be treated as regular income. This would subject it to the higher, progressive rates for income exceeding Rs. 5 million. This advice has generated significant anxiety, especially as BSC profits have traditionally been tax-exempt, specifically designed to assist senior citizens. This new interpretation is seen as unduly harsh, given the current high living costs and the substantial tax burden already faced by individuals.

With the September 30, 2025 tax filing deadline rapidly approaching, UNISAME is urging the FBR to swiftly issue a definitive clarification. This will allow taxpayers to meet their tax obligations accurately and confidently.