After the approval of Finance Bill 2016 from the National Assembly of Pakistan, Federal Board of Revenue (FBR) has finally announced the detailed tax rates on all banking transactions to be made in 2017-18. These rates will be applied as it until the revised SRO of FBR.
Current withholding tax on all type of withdrawal from the banking system would be 0.3 % on case of filer and 0.6% in case of non filer if the total amount exceeded from Rs. 25,000 in a day. It is applicable on all transactions either made by means of sale of any banking instrument, online cash transfer, withdrawal of cash, etc.
Further details are being mentioned here.
| Section | Provision of the Section | Tax Rate | Who will deduct/collect/agent | From Whom | When | Time of Deposit | Taxation Status |
| 231AA(1) Advance tax on transaction in bank | Sale against cash of any instrument including demand draft, payment order, CDR, STDR, RTC, any other instrument of bearer nature or on receipt of cash on cancellation of any of these instruments where transaction exceeds Rs, 2,5000 in a day | 0.3% Filers ADVERTISEMENT CONTINUE READING BELOW
0.6% Non-Filers | Every banking company, non banking financial institution , exchange company or any authorized dealer of foreign exchange | Persons to whom sale of any instrument is made against cash payment | At the time of sale of instrument | In case of Federal / provincial Government on the day the tax is deducted. Rule 43(a). In other than Federal / Provincial Government cases, within 7 days from the end of each week ending on every Sunday. Rule 43(b) | Adjustable |
| 231AA (2) | Transfer of any sum against cash through online transfer, telegraphic transfer mail transfer or any other mode of electronic transfer. Where transaction exceed Rs. 25,000 in a day | 0.3% Filers
0.6% Non-Filers | Every banking company non banking financial institution , exchange company or any authorized dealer of foreign exchange | A Persons transferring any sum | At the time of transfer of any sum | In case of Federal / provincial Government on the day the tax is deducted.Rule43 (a) In other than Federal / Provincial Government cases, within 7 days from the end of each week ending on every Sunday. Rule 43(b) | Adjustable |
| 236P Advance tax on banking transaction other than through cash | (i) Every Banking Company shall collect Advance tax from non-filers on sale of instruments, including demand draft , pay order , special deposit receipt, cash deposit receipt, short term deposit receipt, call deposit receipt & rupee traveler’s cheque.
ii) Every Banking Company shall collect advance tax from non filers on transfer of any sum through cheaque or clearing, interbank or interbank transfers through cheaque, online / telegraphic / mail transfer. | 0.4%
0.4% | Every banking company | From Nonfilers doing this transaction | At the time of sale of such instruments | In case of Federal / provincial Government on the day the tax is deducted. Rule 43(a). In other than Federal / Provincial Government cases, within 7 days from the end of each week ending on every Sunday. Rule 43(b) | Adjustable |
