Tax Savings for Non-Resident Pakistanis on Bank Deposits and How to Claim Them

This article explores how non-resident Pakistanis can enjoy tax exemptions on profits earned from bank deposits in Pakistan, addressing concerns about bank deductions and offering guidance on claiming these benefits.

Key Clauses for Exemption:

• Exempts profits on foreign currency accounts held with authorized banks under the State Bank of Pakistan's Foreign Currency Accounts Scheme.
• Exempts profits on rupee accounts held with scheduled banks,?but deposits must be exclusively from foreign exchange remitted into the account,?and the account holder must possess a POC,?NICOP,?or CNIC.

Bank Deductions:

• Despite exemptions,?banks might still deduct 15% (filers) or 30% (non-filers) tax at source.

How to Claim Exemptions:

1. File an Online Application: Apply for exemption online, providing: Proof of non-resident status (e.g.,?passport,?visa documents)Evidence that deposits are exclusively from foreign remittances (e.g.,?bank statements)
2. Obtain Exemption Certificate:?The Commissioner of Income Tax will issue a certificate upon approval.
3. Submit Certificate to Bank:?Present the certificate to your bank to stop tax deductions.

Additional Notes:

• Non-resident status must be established and maintained.
• Deposits must be exclusively from foreign remittances.
• Exemptions apply only to profit on debt (interest),?not other charges.
• Consult a tax advisor for personalized guidance.

Clarifications:

• Bank deductions do not necessarily mean you're ineligible for exemption.
• Following the outlined steps can help claim exemptions and avoid unnecessary deductions.

By understanding these clauses and following the proper procedures, non-resident Pakistanis can maximize their financial returns while staying compliant with Pakistani tax regulations.

This article was published at Tax Savings for Non-Resident Pakistanis on Bank Deposits and How to Claim Them