KARACHI: Federal Board of Revenue (FBR) has issued updated up to March 09, 2019 for withholding tax rate on cash withdrawal from banking system.
The rate card has been updated after amendment to Income Tax Ordinance, 2001 introduced through Finance Supplementary (Second Amendment) Act, 2019.
The financial institutions are required to collect/deduct withholding tax under Section 231 of Income Tax Ordinance, 2001. In the latest amendment the government abolished withholding tax on cash withdrawal for filers of income tax returns.
Following are the rates for cash withdrawal and cash based transactions:
– A bank shall collect 0.6 percent under Section 231A from non-filers on payment for cash withdrawal, or sum total of payment for cash withdrawal, in a day, exceeding Rs50,000.
– Every banking company, non-banking financial institution, exchange company or any authorized dealer of foreign exchange shall collect 0.6 percent from non-filers under Section 231AA (I) at the time of sale against cash of any instrument, including demand draft, payment order, CDR, STDR, RTC, any other instrument of bearer nature or on receipt of cash on cancellation of any of these instrument where sum of total of transactions exceeds Rs25,000 in a day.
– Every banking company, non-banking financial institution, exchange company or any authorized dealer of foreign exchange shall collect 0.6 percent from non-filers under Section 231AA (2) at the time of transfer of any sum against cash through online transfer, telegraphic transfer mail transfer, telegraphic transfer, mail transfer or any other mode of electronic transfer. Where sum total of transactions exceed Rs25,000 in a day.
The withholding tax deduction is adjustable against income tax liability in case a non-filer declares his annual income and submits wealth statement.