Withholding Tax on Banking Transactions

[hash4u]

0.3 % non filer
0.0 % filer

read reference article below

Withholding Tax placed on PRISM transactions | Pakistan Today

[mohummed.ahmed]

What it means that nobody is exempted from tax, filer and non filer have to pay in any case. Does it apply on cross cheque too to transfer in other banks.

Meray bhai, filers are exempt from this tax u/s 236P if they make non-cash transactions of whatever amount by crossed cheque, PO, DD, IBFT, PRISM, or any other banking instrument/method not involving physical cash. Make a written complain to your parent branch with a copy to head office. Filer honay Kay bawajood Bank aap ko loot rahi hay.

[pomi_pbs]

Meray bhai, filers are exempt from this tax u/s 236P if they make non-cash transactions of whatever amount by crossed cheque, PO, DD, IBFT, PRISM, or any other banking instrument/method not involving physical cash. Make a written complain to your parent branch with a copy to head office. Filer honay Kay bawajood Bank aap ko loot rahi hay.

I understood your point, I have done a cheque transfer from one bank to other bank which was over 50,000 and as I am a filer bank as deducted tax from my account, I am not in Pakistan so I have made one on-line complaint about it and after providing all documents as my NTN number, my filer proof, bank has rejected my application as they are saying again and again.

Filer 0.3%
non Filer 0.6%

You have to pay tax whoever you are.

I have provided them document of FBR for article 236P and they are saying as written on top of document Uptill 30th June 2015 it means this documents is not more effective after 30th June 2015. This is what they have done definition for that document.

Nobody in exempted.

[mohummed.ahmed]

I understood your point, I have done a cheque transfer from one bank to other bank which was over 50,000 and as I am a filer bank as deducted tax from my account, I am not in Pakistan so I have made one on-line complaint about it and after providing all documents as my NTN number, my filer proof, bank has rejected my application as they are saying again and again.

Filer 0.3%
non Filer 0.6%

You have to pay tax whoever you are.

I have provided them document of FBR for article 236P and they are saying as written on top of document Uptill 30th June 2015 it means this documents is not more effective after 30th June 2015. This is what they have done definition for that document.

Nobody in exempted.

Bro, my sincere sympathies are with you. Ask the bank to provide you a copy of that section of law which says filer 0.3% and non-filer 0.6% (non-cash transactions), else my humble advice would be to take out every single penny from that bank account. Why would you pay some thing which you aren't supposed to pay at all?

[pomi_pbs]

Bro, my sincere sympathies are with you. Ask the bank to provide you a copy of that section of law which says filer 0.3% and non-filer 0.6% (non-cash transactions), else my humble advice would be to take out every single penny from that bank account. Why would you pay some thing which you aren't supposed to pay at all?

As I am not in Pakistan so I only have a way to communicate with them is via mail, I have send them mails twice the time and now waiting for their reply, if they will not give me anything written then for sure I will not go with them any more, as UBL was always deducting much more service charges from me but I was operating my account their coz of online facilities I have of funds transfer and other ways.

This time matter is serious so let see their final reply.

[pomi_pbs]

As I have received call from my bank just now they are saying there is a new amendment in Article 236P issued by State bank of Pakistan to all banks that for any kind of transaction they have to deduct 0.3% from filers and 0.6% from non filers.

Does anybody on forum has copy of this latest order.

[mohummed.ahmed]

As I have received call from my bank just now they are saying there is a new amendment in Article 236P issued by State bank of Pakistan to all banks that for any kind of transaction they have to deduct 0.3% from filers and 0.6% from non filers.

Does anybody on forum has copy of this latest order.

I don't know if I should laugh or weep at this pathetic reply. Only Federal Board of Revenue (FBR) is empowered to amend any thing related to Taxation matters, encompassing section 236P of Income Tax Ordinance, 2001. The bank is surely playing with you.

I have thoroughly checked FBR's website, but couldn't find out any SRO/Notification/Order/Circular of FBR, regarding any amendment in section 236 P related to non-cash transactions, other than reducing the WHT rate from 0.6% to 0.3% for non-filers, and extending the applicability of reduced rate of 0.3% for non-filers till 31st December 2015.

[PKTUN]

0.3% do ya 0.6% do kuch bhi hai bhai dayna paray ga koi exemption nahi hai mayray walid marhoom ki pension baywa behan k account mai jati hai uss par bhi tax kat layta hai yeah gunja party.

parha hai business recorder online paper mai k senior citizen aur widow ka bank accounts ki exemption ki summary out box mai dal kar bhool gaya hai ishaq dalaar soaar zaat

[pomi_pbs]

I don't know if I should laugh or weep at this pathetic reply. Only Federal Board of Revenue (FBR) is empowered to amend any thing related to Taxation matters, encompassing section 236P of Income Tax Ordinance, 2001. The bank is surely playing with you.

I have thoroughly checked FBR's website, but couldn't find out any SRO/Notification/Order/Circular of FBR, regarding any amendment in section 236 P related to non-cash transactions, other than reducing the WHT rate from 0.6% to 0.3% for non-filers, and extending the applicability of reduced rate of 0.3% for non-filers till 31st December 2015.

The person on call was saying he has this new notification, and he was asking me to check on state bank web site do not check with FBR web site, and then he reads by his own as saying he has no authority to send you this document by mail as proof.

I have go through all press resale, notification on FBR and State Bank but could not find anything there.

Only this document.

[mohummed.ahmed]

The person on call was saying he has this new notification, and he was asking me to check on state bank web site do not check with FBR web site, and then he reads by his own as saying he has no authority to send you this document by mail as proof.

I have go through all press resale, notification on FBR and State Bank but could not find anything there.

Only this document.

I have already explained every thing in detail. Close your account with that bank. They may well learn their lesson after that.

[pomi_pbs]

I have already explained every thing in detail. Close your account with that bank. They may well learn their lesson after that.

I am seriously thinking about it but I am yet afraid that any other bank can give online facilities as UBL is giving, coz I am always doing branchless banking like online transactions for everything always.

[mohummed.ahmed]

I am seriously thinking about it but I am yet afraid that any other bank can give online facilities as UBL is giving, coz I am always doing branchless banking like online transactions for everything always.

There are other banks in Pakistan, doing business all over the world. Even Islamic Banks like Meezan, Al-Baraka, Dubai Islamic etc provide every facility that UBL has to offer, and their customer care service is much better than UBL. Dubai Islamic and Al-Baraka have branches in many countries of the world outside Pakistan.

[capsat]

@mohummed.ahmed sir you are grossly mistaken and misleading the facts.

I suggest please STOP spreading wrong information, substantiate your " HEAR SAY NEWS " with facts & notification reference from FBR site, please

@pomi_pbs calm down. mate, the bank is not wrong, the above FBR document is enough evidence to give you peace.

do not commit mistake of shutting down your bank account, - The credit history you created over this bank account is priceless if & when you need some financial background check in Pakistan.

The other member is seriously having problems grasping the banking & taxation laws practiced in Pakistan. -

The WHT deduction regime is applicable across every BANK operation in Pakistan under State Bank of Pakistan registry.

@PKTUN long time no c where've you been ?? you are right the summary is ON Hold for retired citizens & widows

I have already explained every thing in detail. Close your account with that bank. They may well learn their lesson after that.

[mohummed.ahmed]

@mohummed.ahmed sir you are grossly mistaken and misleading the facts.

I suggest please STOP spreading wrong information, substantiate your " HEAR SAY NEWS " with facts & notification reference from FBR site, please
@pomi_pbs calm down. mate, the bank is not wrong, the above FBR document is enough evidence to give you peace.

The WHT deduction regime is applicable across every BANK operation in Pakistan under State Bank of Pakistan registry.

Sir for your kind information I am an accountant myself working in Managerial capacity in a federal government organization. Please read that fbr notification posted above again. Where does it say that tax is to be deducted from filers as well. The bank is totally wrong in deducting that tax on non cash transactions from filers under section 236P. My evidence is the on the first page of this forum, where creator has posted FBR rate card. Read section 236P with wide open eyes please. It says filer is exempt u/s 236P

[capsat]

Sir for your kind information I am an accountant myself working in Managerial capacity in a federal government organization. Please read that fbr notification posted above again. Where does it say that tax is to be deducted from filers as well. The bank is totally wrong in deducting that tax on non cash transactions from filers under section 236P. My evidence is the on the first page of this forum, where creator has posted FBR rate card. Read section 236P with wide open eyes please. It says filer is exempt u/s 236P

That 236P clause of exemptionhas been revoked by the FBR, October 10 2015

[mohummed.ahmed]

That 236P clause of exemptionhas been revoked by the FBR, October 10 2015

Where in the whole notification does it talk about lifting exemption for filers u/s 236 P sub section 2? It only talks about amendment in sub section 4 of section 236 P, to include PRISM transactions in WHT applicability for non filers only.

[capsat]

omitted means ... expunged, cancelled, revoked. - thats the best i can deduce from my little knowledge english as 2nd language.

and

Pay 0.3 % WHT ... if you are a tax payer and cnic number is appearing in active tax payer's list

Pay 0.6%. WHT ... if your cnic number is not in the active tax payer's list.

period.
@raza1

[mohummed.ahmed]

omitted means ... expunged, cancelled, revoked. - thats the best i can deduce from my little knowledge english as 2nd language.

and

Pay 0.3 % WHT ... if you are a tax payer and cnic number is appearing in active tax payer's list

Pay 0.6%. WHT ... if your cnic number is not in the active tax payer's list.

period.
@raza1

Have you ever read Income Tax ordinance 2001? Just by reading notification without correlating it to the actual section is sheer blunder. The clause 2 you have highlighted above talks about PRISM transactions which were excluded from the scope of WHT deduction, and now by omitting that exclusion, have been included in WHT applicability for non filers. Clause 3 of notification talks about amendment in section 153, which has nothing to do with WHT applicability on banking transactions. One of my acquaintances made a transafer of Rs 7.6 lac a few days back. I accompanied him till the bank and the bank deducted no tax from his account for that non cash transaction, as he was a filer? Can you explain why? The company I work in makes non cash transfers in millions and no WHT is deducted on any online transfer, as company is filer? Can you explain why?

[capsat]

Pay 0.3 % WHT ... if you are a tax payer and cnic number is appearing in active tax payer's list

Pay 0.6%. WHT ... if your cnic number is not in the active tax payer's list.

period.

[pomi_pbs]

@mohummed.ahmed sir you are grossly mistaken and misleading the facts.

I suggest please STOP spreading wrong information, substantiate your " HEAR SAY NEWS " with facts & notification reference from FBR site, please

- -

@pomi_pbs calm down. mate, the bank is not wrong, the above FBR document is enough evidence to give you peace.

do not commit mistake of shutting down your bank account, - The credit history you created over this bank account is priceless if & when you need some financial background check in Pakistan.

The other member is seriously having problems grasping the banking & taxation laws practiced in Pakistan. -

The WHT deduction regime is applicable across every BANK operation in Pakistan under State Bank of Pakistan registry.

@PKTUN long time no c where've you been ?? you are right the summary is ON Hold for retired citizens & widows

You are right that credit history I have made with this bank is last 9 years of my job continue in abroad and it sure has a value for me but really when they will deduct the tax like that I will not have any option to remove my account, the customer center person was actually referring me a letter from State Bank of Pakistan issued in July 2015 somewhere which I have not found anywhere on SBP website, and he was saying the same as you are telling me 0.3% for filers and 0.6% non filers.

Yet on other hand all FBR documents, all state bank documents, all news paper cuttings are saying another story that person who is a filer will not pay any withholding tax upon transactions other than cash like IBFT.

[TABLE="width: 100%"]
[TR]
[TD="width: 200"]Jul 31, 2015[/TD]
[TD="width: 685, align: justify"]FBR clarifies news reports about WHT on bank transactions[/TD]
[/TR]
[TR]
[TD="width: 685, align: justify"]Federal Board of Revenue (FBR) clarifies certain reports published in a section of the press based on incorrect facts and presumptions regarding the ongoing interaction between trader community and federal government.
To remove any ambiguity, it is clarified that:-
• 0.3% tax on bank transactions is only an advance tax on non-filers of Income Tax Returns.
• Non-filers can become “filer” at any time by submitting his Income Tax Return.
• Regarding difficulties that some businessmen may have in becoming filers due to their being out of the tax net, the Government has set up 3 committees for making entry into the tax net easy.
The Government is committed to expanding the tax net to those who are presently non-filers.
The Government is also committed to improving ease of doing business and facilitation of existing taxpayers.
Public may contact FBR’s FATE Wing or their committee members with any suggestions. List of committee members are on FBR website under the page titled “press release”.

============================================================

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[TD="width: 200"]Aug 17, 2015[/TD]
[TD="width: 685, align: left"]Press Release[/TD]
[/TR]
[TR]
[TD="width: 685, align: left"]A news item has been published in some of the newspapers on 16th August, 2015, stating that Mr. Haroon Akhtar Khan, Special Assistant to Prime Minister on Revenue has asked non-filers to file their tax return by February 28, 2016 and get exemption from Withholding tax deduction on their bank instruments.
It is hereby clarified that Mr. Haroon Akhtar Khan along with Mr. Shahid Hussain Asad, Senior Member (Inland Revenue Policy) and Mr. Nadeem Dar, Member Facilitation and Taxpayer Education (FATE) and Mr. Zubair Tufail from Federation of Pakistan Chambers of Commerce & Industry met representatives of the traders at Islamabad Chamber of Commerce & Industry on 12th August, 2015, to discuss reservations of traders on new Withholding tax on bank instruments of “non-filers”.
Different proposals were raised by the traders’ representatives. The non-filers were advised by Mr. Haroon Akhtar Khan to file their Income Tax Returns and attain the status of “filer” and thus avoid application of Section 236P envisaging withholding tax on bank instruments of non-filers. He never mentioned 28 February, 2016 as closing date for non-filers to file their income tax returns for tax year 2014. The FBR strongly denies attribution of this date to Mr. Haroon Akhtar Khan, Special Assistant to Prime Minister on Revenue.
FBR takes this opportunity to advise “non-filers” to become “filer” by filing return for tax year 2014 immediately and avoid application of section 236P envisaging withholding tax on bank instruments of non-filers.
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