Cash Withdrawal Withholding Tax Calculator 2026

Withholding tax on cash withdrawal is a tax deducted at source by banks when non-filers withdraw cash above certain thresholds. It was introduced to encourage tax compliance and document the economy.

Filers of income tax returns are completely exempt from this withholding tax. Additionally, senior citizens (age 60+), widows, disabled persons, and certain government transactions are also exempt.

The threshold limit is Rs. 50,000 per day. This means if a non-filer withdraws more than Rs. 50,000 in cash from a bank in a single day, 0.8% withholding tax will apply to the entire withdrawal amount.

For non-filers, the tax is calculated as 0.8% of the withdrawal amount. For example, on a withdrawal of Rs. 100,000, the tax would be Rs. 800 (100,000 × 0.008).

Banks aggregate all cash withdrawals made by a non-filer in a single day. If the total exceeds Rs. 50,000, withholding tax applies to all withdrawals made that day.

For non-filers, this tax is usually final. However, if you become a filer later, you may be able to adjust it against your final tax liability. Always consult with a tax advisor for your specific situation.

Yes, the tax applies to all cash withdrawals including ATM withdrawals, over-the-counter withdrawals, and any other method of cash withdrawal from bank accounts.

You can avoid this tax by: 1) Filing your income tax returns to become a filer, 2) Keeping daily withdrawals under Rs. 50,000, 3) Using digital payment methods instead of cash, or 4) Using banking instruments like cheques or bank transfers.

While the primary limit is daily (Rs. 50,000), banks also monitor monthly patterns. However, the 0.8% tax specifically applies when daily withdrawals exceed the threshold.

You need your original CNIC for any cash withdrawal. Banks are required to verify your taxpayer status through your CNIC, which is linked to your NTN and filer status.