Withholding Tax Card 2016/2017: cash withdrawal from banks
KARACHI: The Federal Board of Revenue (FBR) has updated withholding tax rates on cash withdrawal fro a bank by filers and non-filers of income tax returns during fiscal year 2016/2017.
Section 231A of Income Tax Ordinance, 2001 related to cash withdrawal from a bank.
(1) Every banking company shall deduct tax at 0.3 percent from filers and 0.6 percent from non-filers of income tax return, if the payment for cash withdrawal, or the sum total of the payments for cash withdrawal in a day, exceeds Rs50,000.
Through Finance Act, 2016 this explanation has been added to this section. “For removal of doubt, it is clarified that the said fifty thousand rupees shall be aggregate withdrawals from all the bank accounts in a single day.”
Section 231AA of Income Tax Ordinance, 2001 related to advance tax on transactions in bank.
Sub-section (1) every banking company, company, non-banking financial institution, exchange company or any authorized dealer of foreign exchange shall collect advance tax at the time of sale against cash of any instrument, including Demand Draft, Pay Order, CDR, STDR, SDR, RTC, or any other instrument of bearer nature or on receipt of cash on cancellation of any of these instruments.
Sub-section (2) every banking company, non-banking financial institution, exchange company or any authorized dealer of foreign exchange shall collect advance tax at the time of transfer of any sum against cash through online transfer, telegraphic transfer, mail transfer or any other mode of electronic transfer.
Sub-section (3) the advance tax under this section shall be collected at the rate 0.3 percent from filers and 0.6 percent from non-filers of income tax returns, where the sum total of payments for transactions mentioned in sub-section (1) or sub-section (2) as the case may be, exceed Rs25,000 in a day.