ISLAMABAD: Federal Board of Revenue (FBR) has updated withholding tax rate on non-cash banking transactions made by persons not appearing on the Active Taxpayers List (ATL).
The FBR issued withholding tax card 2020/2021 updated up to June 30, 2020.
The FBR said that 0.6 percent withholding tax rate is applicable on non-cash banking transactions under Section 236P of Income Tax Ordinance, 2001. It said that every banking company shall collect withholding tax from persons not on the ATL at the time of sale of such instruments. The tax so deducted/collected shall be adjustable.
Under the Section 236P:
(i) Every banking company shall collect advance tax from a person whose name is not appearing in the Active Taxpayers List on sale of instruments, including demand draft, pay order, special deposit receipts, cash deposit receipt, short term deposit receipt, call deposit receipt and rupee travelers’ cheque, where payment for sum total of all transactions exceed Rs50,000 in a day.
(ii) Every banking company shall collect advance tax from a person whose name is not appearing in the active taxpayers list on transfer of any sum through cheque or clearing, interbank or interbank transfers through cheque, online/telegraphic/mail transfer, where payment for sum total of all transactions exceeds Rs50,000 in a day.