A withholding tax also called as a retention tax, is an income tax that is paid to the government by the payer of the income rather than by the recipient of the revenue. The tax is then withheld or deducted from the revenue due to the recipient.
People of Pakistan are now well aware of this tax. In 2018 it has been declared by the tax chat that withholding tax rates are so applicable to cash withdrawal services. For guidance, it is a kind of income tax that is applicable by using various type of bank services. Usually, the money goes to the government from the payer side.
The importance of withholding tax rates in Pakistan (2018-2019) is due to its own adjustable and flexible nature, they have now become a part of our system.
Current Withholding Tax Rates In Pakistan Are Going Up In 2018-19:
Section231A & 231AA
|Provision Of The Section||Tax Rate||Collection/Deduction Agent||From Whom||When|
Time Of Deposit
|Tax Withdrawal From The Bank.||Withdrawal payment on cash exceeding at rate of Rs 50,000 per day.||Files 0.3%|
Non files 0.6 %
|All Banks||Customers||Anytime||In case of federal / provincial government on the day tax is deducted.|
In other than federal government cases within 7 days from the end of each week ending on every Sunday.
|Advanced tax on transaction in bank||Sale against cash of any instrument including payment order, demand draft or any other instrument of any nature or on recipient of cash on cancellation of any of these instruments.||Filters 0.3 %|
Non filters 0.6 %
|Every banking company, nonbanking exchange company, any authorized dealer of foreign exchange.||Persons To whom sale of any instrument is made on cash payment.||At the time of sale of instrument.||In case of federal / provincial government on the day the tax is deducted.|
In case other than federal /provincial government within 7 days from the end of each week ending on every Sunday.