Wednesday, 19 February 2025
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Withholding Tax on Cash Withdrawal from Bank in 2025
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Withholding Tax on Cash Withdrawal from Bank in 2025

Withholding Tax on Cash Withdrawal from Bank in 2025

Withholding Tax on Cash Withdrawal from Bank in 2025. Being a tax filer in Pakistan has lot of benefits. When you file tax returns regularly then you get advantages of reduced tax rates and some time exemption from tax. Like, when a filer of tax return purchase property then tax rate under section 236k is less for filer. But if he is not filer in FBR then tax rate on purchase of property is high.

From above example it is evident that there are huge differences of tax rates for filers and non-filers. Currently at the beginning of 2025, if someone wants to become active tax filer with FBR either on receipt of notice or to avail tax benefits then he/she needs to submit annual income tax return for tax year 2024. After submission of tax return for tax year 2024 taxpayer needs to pay penalty to update the status of tax filer with FBR. For individuals & salaried person penalty is Rs1,000, for Partnership/AOPs penalty rate is Rs10,000 and for private/public limited companies registered with SECP the penalty rate is Rs20,000.

See also  What is the Solution for Becoming Active Tax Filer 2024

Tax on Cash Withdrawals from Banks in 2025

As per section 231AB of the Income Tax Ordinance, 2001 every banking company shall deduct advance income tax which is adjustable tax at the rate of 0.6% of the cash withdrawal. This tax is applicable on a person whose name is not appearing in the active taxpayers’ list of the FBR. It will be chargeable on the sum total of the payments for cash withdrawal in a day from bank, if exceeding fifty thousand rupees.

It must be noted that the said fifty thousand rupees shall be aggregate cash withdrawals in a single day.

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