What must the withholding tax certificate from my bank show, and why do I need it?

When a bank deducts income tax from the profit on your savings account or term deposit, the law requires it to give you proof of that deduction. That proof, a certificate plus copies of the Computerized Payment Receipt (CPR), is what links the tax the bank took to your own tax record. The provisions below are from the Income Tax Ordinance, 2001 as amended to 30 June 2026 and the Income Tax Rules, 2002 as amended to 24 November 2023.

What does the law say?

Section 164(1) applies to every person deducting tax from a payment under Division III of Part V of Chapter X, which includes a bank deducting under section 151 and a company deducting under section 150. The deductor “shall, at the time of collection or deduction of the tax, furnish” to you:

• copies of the Computerized Payment Receipt (CPR) or an equivalent document, and
• a certificate setting out the amount of tax deducted and other prescribed particulars.

A proviso adds that where the deductor is notified as a SWAPS agent, the SWAPS Payment Receipt (SPR) replaces the CPR.

Section 164(2) then says a person who must furnish a return “shall attach to the return” copies of the CPR or SPR on the basis of which the certificate was given, for tax deducted in that year.

What must the certificate show?

Rule 42 of the Income Tax Rules prescribes the form, which is set out in Part VII of the Second Schedule to the Rules. The form asks for:

Part of the form	What it records
Header	Serial number, original or duplicate, date of issue
Tax	Amount of tax deducted, in figures and in words
You	Full name and address, NTN (if any) and CNIC for an individual
When	Date of deduction, or the period from and to
Why	Section of the Ordinance and the nature of the payment
Base	Gross amount on which tax was deducted, in figures and words
Deposit	Date of deposit, SBP, NBP or Treasury, branch and city, amount, challan or treasury number
Issuer	Name, address and NTN of the bank or office, with signature, name, designation, date and seal

The Part VII list of sections shows 151(1)(b) for profit on a bank account or deposit, 151(1)(a) for National Savings schemes, 151(1)(c) for Government securities and 150 for dividends. That list was substituted in 2007, and the form still refers to a challan while section 164 now speaks of a CPR. The Rules in this corpus are current only to 24 November 2023.

When should I receive it?

The two texts give different timings. Section 164(1) says the certificate and CPR copies are furnished “at the time of collection or deduction”. Rule 42(1) says the certificate is issued “within fifteen days after the end of the financial year”, and rule 42(2) says that if you ask during the year, it must be issued within seven days of your request. Rule 42(3) to (5) let you ask for a duplicate if the original is lost, stolen or destroyed; it must be marked “duplicate”.

Why do I need it?

Section 168 explains what the deducted tax counts for:

• Section 168(1)(a) treats the tax deducted as income you derived. Your income is the gross profit, not the net amount credited.
• Section 168(1)(b) treats the tax as “tax paid by the person from whom the tax was collected or deducted”.
• Section 168(2) allows you a tax credit for that tax against the tax due for the tax year in which it was deducted, subject to section 168(3), which lists final taxes for which no credit is allowed.
• Section 168(5) says a credit that cannot be used in the year is refunded under section 170.

Whether the tax on your bank profit is a final tax or a minimum tax is a separate question, covered on the related pages. Either way, the certificate and CPR are your evidence of the amount deducted and of its deposit.

Worked example (illustrative figures)

Saima, a pharmacist in Multan, earns Rs. 180,000 of profit on her savings account in tax year 2027. Division IA of Part III of the First Schedule sets 20% for profit paid by a banking company on an account or deposit.

• Gross profit: Rs. 180,000
• Tax deducted: Rs. 180,000 x 20% = Rs. 36,000
• Credited to her account: Rs. 180,000 - Rs. 36,000 = Rs. 144,000

Her certificate should show Rs. 36,000 as tax, Rs. 180,000 as the gross amount, section 151(1)(b) as the section, and the deposit details. In her return, section 168(1)(a) means the profit is Rs. 180,000, not Rs. 144,000, and she attaches the CPR copies under section 164(2).

What if the bank charges a fee against the tax?

Section 168(6) says “no amount shall be deducted on account of service charges from the tax withheld or collected by any person under the provisions of this Ordinance.” Under section 168(7), a person who does deduct such a charge must pay that amount to the Federal Government.

Common mistakes

• Reporting the net credit as income. Section 168(1)(a) makes the tax part of your income.
• Filing without the CPR copies. Section 164(2) requires them to be attached to the return.
• Not checking the section and gross amount. The Part VII form requires both, and they are what connect the deduction to the right income in your return.

What to check in the official text

Read sections 164 and 168 of the Ordinance, and rule 42 and Part VII of the Second Schedule of the Income Tax Rules, 2002, in the official PDFs. The Rules we hold are current to 24 November 2023, so check whether the certificate form has been revised since, and whether your bank is notified as a SWAPS agent issuing SPRs.