Sunday, 2 October 2016

Withholding Tax On Transfer In Pakistan

In this article we will discuss about the withholding tax on Transfer (Banking Transactions) in Pakistan, First of all we need to clear our concept regarding the term of Transfer, In Banking Terminology the word transfer refer to the, Any transaction that is not involved in cash withdrawal. For Example, Bankers Cheque, Demand Draft, Pay Order, Call Deposit, Inter Branch Funds Transfer, And Inter Bank Funds Transfer. All Above comes under the umbrella of Transfer Transaction.

As per our withholding tax Structure their is a benefit of zero percent tax for Filer if he wants to transfer their money from their bank account, and if we talk about for the Non-Filer he will be charged .4% for the transaction Above 50,000/= Rupees in a Single Day.

Now lets take one example of Filer and one for Non-Filer

Filer:

Mr. X is a Filer having an account in Bank AL Habib wants to transfer the funds of rupees 100,000/= to his party who has account in Habib Bank Limited, As per our withholding tax structure Mr. X will be Charged Zero Percent Tax because he is a Filer.

Lets find the amount of withholding tax in case of Mr. X

Tax Rate: 0%
Amount: 100,000/=
Withholding Tax Amount: 0.00/=  
Non-Filer

Mr. Y is a Non-Filer having an account in Meezan Bank wants to transfer the funds of rupees 80,000/= Rupees to his Son  who has an account in Bank AL Habib Karachi Main Branch, As we know that Mr. Y is a Non-Filer so as per our tax structure he will be charged .4% withholding tax. 

Lets find the amount of withholding tax in case of Mr. Y

Tax Rate: .4%
Amount: 80,000/=
Withholding Tax Amount: 80,000*.4% =  320/=
For Latest Updates Regarding Our Withholding Tax Structure Visit FBR Offical Website.

Saturday, 1 October 2016

Withholding Tax On Cash Withdrawal In Pakistan

The concept of withholding tax on cash withdrawal (Banking Tranaction) is when ever customer withdraw their money more than 50,000/= Rupees from their account in a single day than he will be charged tax, Now it is depend on whether the customer is Filer or Non-Filer, If he is Filer than he will be charged .3% Tax and if he is Non-filer than he will be Charged .6% Tax.

Lets take an example of both Cases Filer and Non-Filer

Filer

Mr. X is a Filer and he wants to withdraw 175,000/= Rupees from their bank account in single day because he want to purchase goods for their Shop, As we already discussed Mr. X is a Filer and According to our Tax Structure he will be Charged .3%.

Now Lets find the amount of withholding tax in Mr. X case,

Tax Rate: .3%
Amount: 175,000/=
Withholding Tax: 175,000*.3% =  525/=
Non-Filer

Mr. Y is a Non-Filer and he want to purchase laptop for his personal use, the price of that laptop is 80,000/= Rupees, So he wants to withdraw 80,000/= Rupees from his bank account, According to our Tax Structure Mr. Y will be charges .6% because he is a Non-Filer.

Now Lets find the amount of withholding tax in the case of Mr. Y

Tax Rate: .6%
Amount: 80,000/=
Withholding Tax: 80,000*.6%=  480/=
"Keep one thing in mind that Banking Transaction below the amount of 50,000/= Rupees in a single will not be charged any amount of Tax whether the person is Filer or Non-Filer "

For Latest Updates Regarding Withholding Tax visit FBR Official Website.

Sunday, 28 February 2016

How To Open A New Bank Account

Technically there are two approaches through which we can open a new bank account. First one is "Top Down Approach" and the Second Approach is "Bottom Up Approach", in both approaches we evaluate the product and take the rational decision that best fit with our needs.

Now lets discus each Approach Separately and understand the logic behind each Approach.

1. Top Down Approach: In Top Down Approach We Select the Bank First, and Evaluate the Products of that bank and take the decision by selecting the product, So we can say that the process starts from Selecting the Bank First, Assessing Your Need, Evaluating the Products and then Take Rational decision. Now lets take an example  For Example, In Our Country Pakistan there are soo many banks but out of all banks you select Bank Al Habib Ltd, after selecting the Bank your start evaluating that what is your need, say suppose you are a business person and you want to run the account on the name of your business, So it means that you need Current Account, Now you will search the products of bank that what sort of current accounts Bank Al Habib currently offering and you come to know that Current Plus account is the only account that matches and full fill my needs.

2. Bottom Up Approach: Bottom Up Approach is the reverse case of Top Down Approach, In this Approach First of all we Assess our needs then evaluate the products of all banks and then select the product and after do the analysis that which bank is offering the same product with low cost, in simple words we do cost benefits analysis. So we can say that the process start from Assessing the Need, Evaluating the Products and then Selecting Bank. For example, You are a Business Person and want to open a bank account, first of all you assess your needs, Like you need free SMS alerts, you needs free bankers cheque facility for your business. So after assessing you need your start search and evaluate the all banking products, After that You come to know that current account can full your needs. Now you do cost benefit analysis that which Bank is offering the same product with minimum cost. You come to know that Bank Al Habib is the bank which is offering all the facilities that you need to run your business with minimum cost.