Two people can win exactly the same prize on the same day and take home very different amounts. The reason is withholding tax, and the only thing that separates them is whether their name appears on the FBR's Active Taxpayer List (ATL) on the day the prize is paid.
How the deduction works
Prize bond winnings are subject to withholding tax under the Income Tax Ordinance. The bank or National Savings Centre paying your prize deducts the tax at source — you never receive the gross amount and then pay tax later. The rate depends on one thing only: whether you are an active filer at the time of payment. The current filer and non-filer rates, and what they mean for each prize position of every denomination, are shown on the prize bond tax calculator on this site, which is updated whenever the rates change in a Finance Act.
Two points people get wrong:
- The tax is deducted on the full prize amount, not on your profit. There is no concept of subtracting the price you paid for the bond.
- Your status is checked on the payment date, not the draw date. Getting on the ATL after the draw but before you claim can still save you money.
How to check whether you are a filer
The ATL is published by the Federal Board of Revenue and updated regularly. You can check your status in three ways:
- Send an SMS in the format ATL <space> your 13-digit CNIC number to 9966.
- Download the current ATL from the FBR website and search for your CNIC.
- Check through the FBR's online portal if you already have login credentials.
Do this before you go to the counter with a large winning bond. It takes two minutes and can be worth a substantial amount.
How to become a filer
Being a "filer" simply means you have filed your income tax return for the relevant tax year and your name has therefore been included in the ATL. The broad steps are:
- Register for an NTN on FBR's IRIS portal using your CNIC (for salaried and most individuals, the CNIC itself serves as the NTN).
- File the annual income tax return and the wealth statement for the tax year.
- Pay any surcharge that applies if you are filing late.
- Wait for the ATL to be updated — inclusion is not instant.
Filing has effects far beyond prize bonds: lower withholding on bank transactions, vehicle registration, property transfers and dividends. If you regularly hold prize bonds worth a meaningful amount, the filer status usually pays for itself.
A worked example of why it matters
Take any first prize on this site — say the Rs. 750 bond's first prize. Open the tax calculator, enter that amount, and the page shows the exact net figure for a filer and for a non-filer side by side. The gap on a large prize is often more than the annual cost of hiring someone to file your return for you.
Keep the deduction certificate
When tax is deducted, ask for the withholding tax deduction certificate. If you file returns, this deducted amount is adjustable and should appear in your return — many people simply lose the certificate and never account for it.
A note on honesty
Rates and rules are set by the Government of Pakistan and change with each Finance Act. This page explains how the system works; for the rate applicable on the day you claim, rely on the deduction the paying branch applies and on FBR's own notifications.