When you withdraw cash from banks in Pakistan, you must know the latest tax rules. In 2025, the government made clear rules for both tax filers and non-tax filers regarding taxes on cash withdrawals. Knowing these rules can help you save money and benefit from what is available to tax filers. Here I am going to discuss the tax rates on cash withdrawal from banks in Pakistan in 2025.
How Much Tax Will You Pay?
You will be charged tax if you withdraw more than PKR 50,000 in one day. In case you are a filer, the rate will be 0.3%, and in case you are a non-filer, the rate will be higher at 0.6%. For instance, if you are a filer and withdraw PKR 100,000, then you will be charged PKR 150, whereas for a non-filer, it will be PKR 300.
What is the Threshold for Cash Withdrawal Tax in Pakistan?
The FBR imposes a tax on cash withdrawals exceeding PKR 50,000 per day from any bank account.
Example: If you withdraw PKR 70,000 in a day, the tax applies only to the excess amount of PKR 20,000.
Tax Rates for Filers and Non-Filers
| Category | Tax Rates | Example (PKR 100,000 Withdrawal) |
|---|---|---|
| Filer | 0.3% | PKR 150 |
| Non-Filer | 0.6% | PKR 300 |
Pro Tip: Joining the Active Taxpayer List (ATL) significantly reduces the tax burden.
Why is There a Difference in Tax Rates?
The government uses higher rates for non-filers as a penalty to encourage tax registration. That’s why if you want to pay less tax on your bank cash withdrawals you need to become a filer.
- Filers can adjust this tax against their annual liability.
- Non-Filers face non-adjustable taxes and pay more for banking transactions.
Who is Exempt from Cash Withdrawal Tax?
- Charitable Organizations like registered NGOs.
- Government Institutions conducting official transactions.
- Certain Foreign Missions operating in Pakistan.
How Does This Impact You?
The taxation on cash withdrawals is rather low for filers at 0.3%, and the good news is that it is also adjustable. That means a person would not have any additional cost at the time of filing his annual tax return. However, for non-filers, the rate is double the cost at 0.6%. The bad news is that this tax cannot be adjusted as well, which leaves the non-filer financially disadvantaged.
Real-Life Examples
Filer’s Advantage:
- A filer withdrawing PKR 1,000,000 in a month pays PKR 3,000 in taxes.
- A non-filer pays PKR 6,000, doubling the cost.
Annual Adjustments for Filers:
- If a filer pays PKR 5,000 in withdrawal tax during the year, it can be deducted from their income tax liability, making it effectively cost-free.
Why Become a Filer?
There are a few notable benefits for which you should become a filer in Pakistan. Some of them are given below:
- Save Money: Lower taxes on cash withdrawals and other transactions.
- Additional Benefits: Lower rates on bank profits, property transactions, and vehicle registration.
- Financial Privileges: Filers enjoy better banking and investment opportunities.
Statistics Highlighting the Importance
Over 4 million individuals are on the ATL as of 2024, reflecting increased tax compliance. Non-filers paid an estimated PKR 10 billion in cash withdrawal taxes last year—a significant loss compared to filers.
Regularly check FBR’s website for changes in rules and thresholds to ensure compliance and avoid penalties.
Conclusion
The latest rules regarding cash withdrawal tax in Pakistan have emphasized the benefits of being a filer. The filers get lower tax rates and can make adjustments to their taxes, whereas non-filers face double costs and restricted financial options. Enrollment in the Active Taxpayer List (ATL) is the best option for anyone who wants to save money and avoid unnecessary financial burdens.
Also read:
- How to File Income Tax Return in 2025
- How to Make NTN in 2025 for Salary and Business
- Income Tax Return Course in Pakistan
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