Tax on cash withdrawal from bank


#1

Whats the tax percentage on cash withdrawal from bank. Is it 0.30% or 0.40% ?


#2

Don't know the rate but it only applies when the amount is greater than Rs.25,000.


#3

if u withdraw cash above 25000rs then 0.2% will b deducted of the withdrawl amount.......below 25k no tax


#4

It was 0.2% last year.

From 01-07-2008, it is 0.3% on withdrawals of all cash more than Rs.25000/- per day. Means you can withdraw only Rs.25000/- per day without tax.

After imposing this tax, banks lost many customers. Traders are now doing cash transactions off the record. Intelligent State Bank of Pakistan and FBR still think that they are successfully documenting the economy.


#5

^u mention 25000 per day.......but i guess there is no limit of transactions each day...means u can withdraw 25000 as many times as u like each day through seperate cheques....correct me if i m worng


#6

[quote=", post:, topic:"]

^u mention 25000 per day…but i guess there is no limit of transactions each day…means u can withdraw 25000 as many times as u like each day through seperate cheques…correct me if i m worng
[/quote]

Yes you are wrong :) i have lost hell lot till now bcoz of this stupid rule


#7

Tax-free amount is first Rs.25,000/- of the day. Number of cheques has no effect. Means you presented 04 cash-cheques in a day, tax will be as follows

Cheques Tax

----------------------------------

1)10,000 no tax

2)20,000 Rs.15 (0.3 % of 5000/- which is over the limit)

3)20,000 Rs.60 (now this is over the limit)

4)10,000 Rs.30 (this also is over the limit)

This applies to the transaction of a single day.


#8

i hate this tax :@ i think 25000 is too low

lockers being looted and bank account are getting difficult to take money out from what will people do?


#9

first 25000 is exempt from tax , u hav to pay 0.3% on remaining amount

if u withdraw 100000 rs, ur tax will be

100000-25000=(75000*0.3)/100..........=225

on 500000 it wud be calcutated after deducting first 25000

tax wil be on 475000*0.3%=1425rs


#10

wait for the day when banks will start charging service fee.


#11

the banks give more importance these taxes than that of their customers because banks are depend on these taxes.Every branch are earning a lot of money due to these taxes.people have to pay amount of thousands to withdraw their money.u can say that if u have bank account u can use it just for rs.25000 without tax


#12

And I guess this is Withholding tax which means you can reclaim this amount at the time of filing tax return at year end. Correct me if I am wrong.


#13

[quote=", post:, topic:"]

Tax-free amount is first Rs.25,000/- of the day. Number of cheques has no effect. Means you presented 04 cash-cheques in a day, tax will be as follows

Cheques Tax

----------------------------------

1)10,000 no tax

2)20,000 Rs.15 (0.3 % of 5000/- which is over the limit)

3)20,000 Rs.60 (now this is over the limit)

4)10,000 Rs.30 (this also is over the limit)

This applies to the transaction of a single day.

[/quote]

Please note that this rule applies only to cash transactions, cheaques are expemted.


#14

[quote=", post:, topic:"]

the banks give more importance these taxes than that of their customers because banks are depend on these taxes.Every branch are earning a lot of money due to these taxes.people have to pay amount of thousands to withdraw their money.u can say that if u have bank account u can use it just for rs.25000 without tax
[/quote]

taxes goes to government


#15

What I believe is that these taxes are not imposed by Banks. Instead these are imposed by Govt. Banks are only collecting on behalf of Govt. & then depositing in Govt. Account.


#16

@TechMan

right. this is withholding tax and can be claimed for refund when sending annual tax returns but only if your assessments shows that you deserve a refund.

@Kool

Cross-Cheques are definitely exempt.

@saqib123

@amin_pksa

whole amount goes to FBR (Federal Board of Revenue) Government of Pakistan.

FBR is earning less and losing more by imposing this tax. They are getting some money but losing lots of bank transactions, consequently putting bad effects on overall economy.


#17

Can somebody explain what is withholding tax and why is it refundable. PTCL also charges withholding tax for bills amount over Rs. 1000


#18

^ PTCL withholding tax is also refundable.

Withholding tax is a Tax which is deducted at source of revenue. Since the revenue does not reflect your actual income therefore when you assess your net income of the year and found that the payable tax is less than the paid tax then you demand a refund of extra payment from FBR in annual return.

It works the other way also. If payable tax is more than the the paid tax then you need to deposit the excess amount into National Bank as Income Tax.

In any case, withholding tax is always added into your income tax category.


#19

[quote=", post:, topic:"]

Please note that this rule applies only to cash transactions, cheaques are expemted.
[/quote]

That doesn’t help as whenever you cash a check the WHT is levied.


#20

If you give a crossed cheque of what ever amount to some one & he deposits in his account, no tax will be deducted from you.

Tax of 0.30% will be imposed only on non-crossed/bearer cheques at the time of encashment, with the condition that total amount withdrawn with in a day is more than Pak Rs. 25,000.