Wednesday, 29 May 2024
Withholding Tax on Cash Withdrawal in Pakistan 2024 for Filer

Withholding Tax on Cash Withdrawal in Pakistan 2024 for Filer

Withholding Tax on Cash Withdrawal in Pakistan 2024 for Filer

Withholding Tax on Cash Withdrawal in Pakistan 2024 for Filer. 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 3% for filer. But if he is not filer in FBR then tax rate on purchase of property is 10.5%.

From above example it is evident that there are huge differences of tax rates for filers and non-filers. Currently, 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 2023. After submission of tax return for tax year 2023 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  Tax Advice for 2024: Do not File Incomplete Tax Returns

Requirement to file tax return for tax year 2023 for becoming tax filer will remain applicable up to 28th February 2025.

Tax on Cash Withdrawals

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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