Govt. rolls back Withholding Tax rule on withdrawal of Rs.50,000

Withholding tax on bank accounts

The federal government has taken back the decision of imposing the withholding tax on the withdrawal of a total amount of Rs. 50,000 from several banks in one day.

However, the tax will be applicable on any other kind of total transaction of more than Rs. 50,000 done on the accounts opened in the different banks.

The sources in the Federal Board of Revenue (FBR) told that the new taxes will be imposed once the modified Finance Bill approved by the National Assembly converts into the Finance Act after the President signs it.

Earlier, after making significant changes to the Finance Bill regarding the withdrawal of money from banks, the government instead of imposing the withholding tax on the pullout of Rs. 50,000 in one day from one account, applied it on the total withdrawal of the combined transaction on per CNIC in one day from all the bank accounts opened in several banks.

But now, the Finance Bill approved by the National Assembly has been modified once again and the limit of withdrawing the cash worth Rs. 50,000 from different banks have been restored on the single bank accounts.

New changes in the Finance Bill

According to the new changes in the Finance Bill, if an account holder who owns one CNIC performs a total transaction of Rs. 50,000 or more on the different accounts opened in the various banks; the withholding tax would be applied.

The account holders will be able to withdraw the sum of Rs. 50,000 from each of their bank accounts without any withholding tax. The withholding tax will be applied to any other type of banking transaction.

If an account holder performs more than three transactions, worth Rs. 50,000 on the accounts opened in the different banks; the tax would be applied to the total amount that comes after adding the entire transactions.

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