The government has officially enforced Tax Increase Implemented on Cash Withdrawals for Non-Filers as announced in the federal budget. According to the Federal Board of Revenue (FBR), individuals who are not listed in the Active Taxpayers List (ATL) will now face higher tax deductions when withdrawing cash from banks.
Under the new rules, a 0.8% tax will be applied on daily cash withdrawals exceeding Rs 50,000. Previously, the rate was 0.6%, meaning non-filers will now pay more on the same transaction amount.
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The FBR clarified that all banking companies are authorized to deduct this advance adjustable tax directly at the time of withdrawal. This move aims to encourage more people to become tax filers and to reduce cash-based, undocumented transactions.
In addition to cash withdrawal taxes, the government has also revised advance tax rates on the purchase, sale, or transfer of immovable property. To provide relief to property buyers, the withholding tax rate has been reduced by 1.5%. However, for property sellers or transferors, the tax rate in each slab has been increased by 1.5%.
The reason behind this increase for sellers is to adjust for capital gains tax earned on the sale of property. These changes have been made under amendments to Sections 236C and 236K of the Income Tax Ordinance.
For non-filers, these measures make it costlier to keep avoiding tax registration, as they will face higher deductions not only on banking transactions but also in property dealings.
This policy is part of the government’s broader tax reforms to widen the tax net, increase revenue, and promote digital financial transactions instead of cash-based operations.
FAQs
1. What is the new tax rate for Cash Withdrawals for Non-Filers?
Non-filers will now pay 0.8% tax on daily cash withdrawals above Rs 50,000.
2. What was the previous rate?
Previously, the rate was 0.6% for the same withdrawal limit.
3. Who will deduct this tax?
All banking companies are authorized to deduct the advance adjustable tax.
4. Are there changes in property transaction taxes?
Yes. Buyers get a 1.5% reduction in withholding tax, while sellers face a 1.5% increase in every slab.
5. Why is this tax increase being implemented?
To encourage tax filing, expand the tax net, and reduce cash-based transactions.
