Q.1 Can I deposit profit cheque into my
account with any scheduled bank? If not, then how can I withdraw my profit without
coming to the Centre?
Ans: No. Unlike cheques of banks, the
Profit coupons/withdrawal slips of NSS are not negotiable instruments, hence not
acceptable by banks. The profit accrued on BSC only may, however, be
collected through an agent duly authorized by the certificate holder at his/her
own risk and subject to the satisfaction of the officer in charge.
Q.2 What is the standard procedure
for encashment of certificate(s) in case of death of certificate
Ans: Subject to the rules of the respective schemes, the nominee may opt for encashment of the certificates or transfer
of the same in his/her name, however, in the former case the nominee shall be required
a. an application on plain paper containing three specimen
signatures of himself/herself duly verified to the satisfaction of the officer in
b. death certificate of the deceased holder.
c. attested photocopies of CNICs of both the deceased
holder and himself.
d. in case the certificates are intended to be
transferred to nominee, an application on SC-4 supported by relevant documents shall
be required in addition to above requirements.
e. Original Certificates.
Q.3 Do the revised rates of profit
on National Savings Scheme automatically apply to the investment made prior to such
Q.4 Are new rates automatically
made applicable on the existing investments?
Ans: All National Savings Schemes (NSS)
except Savings Account are term/fixed deposits; hence, the agreement made at the
time of investment remains valid upto the maturity of that particular deposit.
Any change in profit either upwards or downwards on later issues doesn’t affect
the existing investments. However, if any investor intends to avail new rates,
he/she can withdraw the investment and on payment of subject to nominal service charges (if applicable) and then invest the same on new rates.
Q.5 Can widowers invest in
Bahbood Savings Certificates?
Ans: No, at present the widowers cannot
invest in Bahbood Savings Certificates. However, after attaining 60 years
of age, they become automatically eligible being senior citizens.
Q.6 Who are eligible to invest in Bahbood
Ans: The widows and the senior citizens
aged 60 years or above can invest in Bahbood Savings Certificates.
Q.7 Is investment made in National
Savings Schemes secure?
Ans: Yes, the investment made in
National Savings Schemes (NSS) is fully guaranteed by the Government of Pakistan.
Q.8 What is the difference between
Joint-A and Joint-B type investment?
Ans: The National Savings Schemes provide the
facility of joint investment upto two persons. There are two different types
i.e. Joint-A and Joint-B. In case of Joint-A deposits, the encashment is given
only after having the signatures of both the investors; while in case of Joint-B,
either of the investors can withdraw/encash the principal under his/her own signatures
With Holding Tax:
Q.1 On which schemes, the withholding tax
is applicable and under which law?
Ans: With the exception of BSC and PBA,
profit on all NSS is subject to deduction of withholding tax @ 10 in case the investment
exceeds Rs.150,000/- under the Income Tax Law for the time being in force except
Regular Income Certificate wherein no such exemption is available.
Q.2 If two persons are holding joint
investment, what is the limit of tax exemption what will be the investment limit
either Rs.150, 000/- or Rs.300,000/-?
Ans: For the purpose of withholding tax deduction,
presently Rs.150,000/- shall be deemed to be the limit. As soon as this limit is
exceeded the profit shall become liable to withholding tax beyond which tax shall
apply irrespective of whether the investment is in single or joint names.
Q.3 Is there any tax applicable on
the prizes won on Prize Bonds, if so, what is the ratio?
Ans: The tax at the rate of 10% of the
prize is deducted at source at the time of payment of prize money in accordance
with the Income Tax Ordinance, 2001 as amended from time to time.
Q.4 I am a non-resident Pakistani and
want to make some investment in National Savings Schemes (NSS), whether, the profit
earned will be exempt from tax or not?
Ans: The investment received through
the branches of Habib Bank Ltd. and United Bank Ltd. operating abroad and profit
paid abroad is exempt from deduction of withholding tax.
Q.1 On which scheme(s), the Zakat is applicable
Ans: Zakat is collected from investment made in Defence
Savings Certificates, Special Savings Certificates (Regd), Savings Account and Special
Savings Account. In case of Defence Savings Certificates, the Zakat is collected
@ 2.50% on the accumulated value of the certificate(s) (i.e. principal + profit)
as on the Zakat valuation date preceding the date of encashment. Whereas,
in case of Special Savings Certificates (Regd), Savings Account and Special Savings
Account the Zakat is collected @ 2.50% of the principal of that particular maturity.
Q.2 Is there any time constraint for submitting
a Zakat Declaration seeking exemption from collection of Zakat?
Ans: Yes, there is definitely a time limit.
The said declaration can easily be submitted at the time of investment or after
that, but it should be furnished before 1st Shabban so as to make it effective for
the coming Ramadan. Any declaration submitted after the 1st Shabban will be
applicable for the next year and not for the current Islamic calendar year.
Q.3 I am a non-resident Pakistani and
want to make some investment in National Savings Schemes (NSS), whether, the said
investment will be exempt from Zakat or not?
Ans: Any assets acquired against payment in
foreign currency or maintained in foreign currency are to be treated as exempt from
compulsory collection of Zakat. An account, which is opened with foreign currency
and out of which an account can be withdrawn in foreign currency or local currency
does not change the nature of the account.
Q.4 Is there any Zakat collection in case
of reinvestment of existing Certificates?
Ans: No. Zakat is only collected at the
time of actual encashment.