Reduced 5% tax on Behbood and pensioner certificate profit.
Net annual profit
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Gross profit
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Tax (5%)
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Net yield
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Your breakdown
Updates live as you type| Step | At 5% Behbood rate | If taxed at 15% |
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A concession built for pensioners and widows
Behbood Savings Certificates and the Pensioner Benefit Account are National Savings products with a specific social purpose. They are open to senior citizens, widows and pensioners, and the state rewards that group with a deliberately gentle tax on the profit they earn. Where ordinary bank profit and most fixed-income returns are taxed at the standard profit-on-debt rate, profit from these certificates is taxed at a sharply reduced rate. This calculator takes the amount you have invested and the annual profit rate the scheme is paying, then shows the tax, the profit you keep, and the after-tax yield on your money. The concessional treatment is long-standing, but the exact reduced rate is fixed by law and can be revised, so the figure here is the one this calculator applies rather than a permanent guarantee.
This is a planning tool for retirees living off their savings and for families helping an elderly parent decide where to park capital. It is intentionally narrow: it values the reduced-rate profit on these specific instruments, not a general savings comparison.
Why the reduced rate changes the maths so much
The mechanics are straightforward. The tool multiplies your invested amount by the profit rate to get gross annual profit, then applies the reduced Behbood rate, currently 5 percent as modelled here, to that profit. What remains is your net profit, and dividing it back by the amount invested gives the net yield, the return you actually keep after tax. The reason the reduced rate matters is the contrast with the alternative. On ordinary profit on debt the withholding rate this calculator uses elsewhere is 15 percent for a filer, and a non-filer can face far more. Paying 5 percent instead of 15 percent on the same profit leaves a meaningfully larger slice in the saver's hands, which is exactly why these certificates are so popular with the people eligible for them.
A PKR 1 million investment, after tax
Suppose a pensioner places PKR 1,000,000 in Behbood certificates paying an annual profit rate of 14.4 percent. Gross profit for the year is PKR 144,000. At the reduced 5 percent rate this calculator applies, the tax is PKR 7,200, leaving net profit of PKR 136,800. That works out to a net yield of 13.68 percent on the capital. Had the same PKR 144,000 been taxed at the standard 15 percent profit-on-debt rate instead, the tax would have been PKR 21,600 and net profit only PKR 122,400. The concession is worth PKR 14,400 to this saver in a single year, and the gap compounds over the life of the certificate.
Eligibility limits and the catch on very large balances
The concession is not unconditional. Behbood and Pensioner Benefit products carry per-person investment ceilings set by the Central Directorate of National Savings, and the reduced rate is tied to genuine eligibility, so a working professional cannot simply route ordinary savings through them to dodge the standard rate. There has also historically been a refinement where, if the profit-on-debt computation on these certificates would otherwise exceed a stated percentage of the profit, relief brings it back down, which is the policy keeping the effective burden low for the target group. Those limits and any minimum-tax interaction are the kind of detail that gets adjusted in the budget, so confirm the current ceilings and treatment with National Savings and the FBR before committing a large sum.
Is the 5 percent deducted at source or paid at filing?
Tax on this profit is generally collected by the National Savings centre when profit is paid, so the saver usually receives the net amount this tool shows without having to remit anything separately. For most eligible pensioners that withholding is the end of the matter on this income. If you file a return, you would still report the profit, and the tax already deducted is credited. Confirm the current withholding mechanics with National Savings, since the exact reduced rate and collection method can change.
Can a non-filer hold these certificates at the same rate?
The reduced rate on Behbood and pensioner certificates has been designed around the eligible holder rather than filer status in the way ordinary bank profit is, so the steep non-filer penalty that hits regular profit on debt does not map across cleanly. That said, Pakistan steadily widens the filer-versus-non-filer gap, and staying on the Active Taxpayer List is sensible for many other reasons. Verify the current position for non-filers with the FBR before assuming the concession applies unchanged.