The Federal Board of Revenue (FBR) has announced a revised tax policy regarding bank withdrawals, providing relief to millions of taxpayers and easing the burden on small-scale transactions. As per the new policy, withdrawals up to 50,000 rupees will be entirely tax-free, benefiting individuals who were previously subject to a tax rate of 0.6% on such transactions.
Prior to this revision, the 0.6% tax was applicable to non-filers making withdrawals from their bank accounts, excluding them from the active taxpayer list. However, with the updated tax policy, individuals making withdrawals up to 50,000 rupees will no longer face any tax deductions, making it easier for them to access their funds without financial deductions.
For withdrawals ranging from 50,001 to 50,500 rupees, a nominal tax of 303 rupees will be applicable. Similarly, withdrawals amounting to 55,000 rupees will be taxed at Rs330, while those withdrawing 75,000 rupees will be charged Rs450. It’s important to note that the new tax rates will only apply to the portion of the withdrawal that exceeds the threshold of 50,000 rupees.
The revised tax policy ensures that only the portion of the bank withdrawal exceeding the limit of 50,000 rupees will be subject to taxation. Transactions below this threshold will be tax-free.
Additionally, the FBR circular clarified that the tax exemption will extend to the federal and provincial governments, further easing financial transactions for government bodies. Moreover, foreign embassies and diplomatic missions operating in Pakistan will also be exempted from this tax.
Overall, the new tax policy aims to promote ease of financial transactions and provide relief to taxpayers, while still ensuring the government’s revenue generation.
