ISLAMABAD: The Federal Government has not revised rates or limits for tax on cash withdrawal from bank accounts under section 231A and on issuance of cash denominated bank instruments such as pay orders and demand drafts under section 231AA of Income Tax Ordinance 2001. The FBR spokesperson has strongly refuted such news appearing on some sections of media.
According to some media reports, as per a notification, the non-filers would have to pay 0.6% tax on banking transactions above Rs 25,000 via cash or cheque. This amounts to a deduction of Rs 150. Earlier, tax was imposed on banking transactions above Rs 50,000. But the government has now restricted cash transactions to a minimum of Rs 25,000.
The FBR spokesperson has strongly refuted such news, saying that there has been no change in cash limits or tax rates in any of the two provisions of law. The only change which has been made through Finance 2nd Supplementary Act 2019 is taking out the tax filers from the scope of both these provisions. Now these withholding provisions are applicable only to non-filers, the spokesperson has further clarified.
The spokesperson added that this huge concessionary step has been taken by the Government to encourage commercial activity through banking channels which needs to be appreciated.