Cash Withdrawal Tax Calculator Pakistan 2026-27

How the rule works

Section 231AB requires banks to deduct advance income tax when a non-filer withdraws cash above a daily limit. The bank checks your CNIC against FBR's Active Taxpayers List each time. If you're on it, no tax is deducted. If you're not, and your cash withdrawals that day add up to more than Rs 50,000, the bank takes 0.8% of the whole amount.

What counts as a withdrawal?

Cash taken over the counter, from an ATM, or by encashing a cheque counts. Withdrawals from all your accounts in the same bank on the same day are added together. Online transfers, card payments and IBFT don't count, because no cash leaves the bank.

A real-world example

Zubair runs a small hardware shop and withdraws Rs 300,000 in cash on Mondays to pay suppliers. He isn't a filer. Each Monday, the bank deducts Rs 2,400. Over a year that's Rs 124,800, gone before he's paid anyone. A filed return would bring that to zero. Paying suppliers by bank transfer would avoid it too.

Can I get the money back?

Tax deducted under 231AB is adjustable. If you file a return for the year, you can claim it against your income tax. But that only helps if you file. For a non-filer, it simply becomes a cost.

Why the government taxes cash

Cash transactions are hard to trace, so they make it easier to keep income outside the tax system. Taxing cash withdrawals by non-filers nudges people towards both filing and digital payments. Over the last few budgets, the filer rate has been removed entirely, while the non-filer rate has stayed.

Tips to avoid the deduction

• File your return. Once you're on the ATL, the deduction stops.
• Keep daily cash withdrawals at or below Rs 50,000 when you can.
• Pay bills, suppliers and staff by bank transfer, Raast or mobile wallet.
• Check your ATL status before large withdrawals, by sending ATL and your CNIC to 9966.

Questions people ask at the bank counter

"The bank cut tax, but I am a filer."

This happens more often than you'd think. The bank checks the ATL using the CNIC linked to your account. If your name was added to the list recently, or your account has an old or mistyped CNIC, the system may not recognise you. Ask the branch to update your CNIC and re-check your status. Tax wrongly deducted can be adjusted when you file.

"Does it matter which branch I use?"

No. The limit is applied per bank, across all your accounts in that bank, for the whole day. Using a different branch of the same bank doesn't reset it.

"What about joint accounts?"

For joint accounts, banks generally look at the status of the principal account holder, though practice varies. If one holder is a filer and the other isn't, ask your bank how it treats the account.

A bigger-picture view

For a salaried person who withdraws Rs 40,000 at a time from an ATM, this tax will probably never apply. It mainly hits traders, contractors and others who handle large amounts of cash. If that's you, two changes make the most difference: get on the ATL, and move regular payments to bank transfer or Raast. Both are free, and both stop the deduction for good.

It's also worth remembering that banks report large cash transactions to FBR regardless of tax. Regular big withdrawals by a non-filer are exactly the kind of pattern that leads to a notice asking why no return has been filed.

Related calculators

• Filer vs non-filer guide, to get the deduction removed.
• Mobile and internet tax calculator, for another tax that's much higher for non-filers.
• Business tax calculator, for traders who want to see their full yearly tax.

Rates: Income Tax Ordinance 2001 and its schedules as amended by the Finance Act 2026, plus FBR's withholding tax rate card for Tax Year 2027. Results are estimates. Check with FBR or a tax adviser before acting on them.