RECENTLY, the government imposed five per cent income tax on the yield on Behbood Certificates, Shuhada Family Account and Pensioners’ Benefit Account, which will be applicable from the tax year 2023.

Basically, such schemes were introduced to provide financial benefits to the families of martyrs, who laid down their lives for the nation, and senior citizens, who, as part of the salaried class, had been paying income tax regularly and contributing towards the development of the nation when they had a regular source of income.

This class is now completely dependent on the income derived from such schemes, which under the current rising cost of living is not sufficient even to maintain their modest living, let alone having a comfortable life. This imposition of tax will snatch away the short-lived happiness of the account holders in the wake of an increase in the profit margins on these schemes.

The Federal Board of Revenue (FBR) policy wing should on humanitarian grounds have sympathetic view of the situation and revert to the old system where such income was considered taxable if, together with other income, it exceeded the minimum limit of the exempted income. Otherwise, it will be a great burden on small-scale investors.

Just to elaborate, it may be noted that on an investment of Rs5 million at the current rate of return, the applicable income tax under the newly-imposed policy, will be Rs41,400, whereas, under the old system, it would have been Rs11,400. Will the authorities have pity on this segment of society?

S. Zaki Hasan
Karachi

Published in Dawn, August 19th, 2023