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
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%
Withholding Tax Amount: 0.00/=
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
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Tax Rate: .4%
Withholding Tax Amount: 80,000*.4% = 320/=