There’s been a lot of buzz lately claiming that the federal government is now taxing every bank transaction—whether you’re a tax filer or not. But let’s clear the air: that’s simply not true.
Starting July 1, 2025, the government has only revised the withholding tax (WHT) policy on cash withdrawals over Rs. 50,000 per day, and even that only applies to non-filers.
So if you’re someone who files your taxes and appears on the Active Taxpayers List, you’re completely exempt from this tax—even if you withdraw large amounts from a bank counter or an ATM. Nothing has changed for you.
However, for non-filers, the WHT on daily cash withdrawals above Rs. 50,000 has gone up slightly—from 0.6% to 0.8%. The deduction is automatic and only applies to cash withdrawals, not to online transfers, cheque payments, or deposits.
Government sources have clarified that this move aims to encourage more people to file their taxes and formalize their income, not to burden everyone across the board. The viral claim that all bank transactions are now being taxed is misleading.
Bottom line:
✅ Filers? No WHT on cash withdrawals.
❌ Non-filers? 0.8% tax on cash withdrawals over Rs. 50,000/day.
💸 No tax on online transfers, cheque payments, or deposits.
