Budget 2021-22: Govt abolishes withholding tax from banking transactions

KARACHI: The government has abolished the withholding tax on cash withdrawal from the banking system and non-cash banking transfers to provide relief to the general public.

The federal government in its Federal Budget 2021/22 presented on Friday took major relief measures by abolishing 12 withholding provisions from the Income Tax Ordinance, 2001.

Under the relief measures, the government has abolished the provisions of Section 231A related to banking cash withdrawal and Section 236P related to non-cash banking transfers of the Income Tax Ordinance, 2001.

Other provisions deleted from the ordinance to abolish the withholding tax included the collection of tax from persons remitting amounts abroad through credit or debit or prepaid cards; collection of tax on domestic air travel; collection of tax on international air travel; tax collection on extraction of minerals; collection of tax from the members by a stock exchange registered in Pakistan, it said.

Similarly, the collection of tax on marginal financing by the National Clearing Company Pakistan Limited (NCCPL); tax collection from compressed natural gas (CNG) stations; and collection of tax on certain petroleum products have also been abolished.

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