The National Board of Revenue has said interest generated from the wage earners development bonds purchased before July 2011would not be taxable.
Officials of the NBR said investors would get the waiver irrespective of their date of cashing. The revenue board on Tuesday issued a clarification in this connection as there was confusion over deducting tax at source and imposing income tax on interest generated from such bonds.
Income from investment in wage earners development bonds was tax-free before July 2011. The NBR scrapped the benefit from the fiscal year 2011-2012 and imposed 5 per cent tax at source on such income.
Investors faced problems as field level income tax officials imposed tax on the interest generated from wage earners development bonds for each month for the bonds (bought before July 2011) matured after July 2011.
In the clarification, the NBR said that income generated from investment in such bonds purchased before July 2011 would be tax-free irrespective of the date of cashing of the bonds.
‘It means profits from such bonds will be totally tax-free even if they mature after July 2011,’ said NBR first secretary (tax policy) Abdur Rahman Khan.
-With New Age input
