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Foreign Remittances: Non-filers get exemption on cash withdrawal

Foreign Remittances: Non-filers get exemption on cash withdrawal

ISLAMABAD: The government has granted exemption from deduction of income tax on cash withdrawal by non-filers from Pak Rupee bank accounts, which have been opened for receiving foreign remittances.

Through Finance Supplementary (Second Amendment) Act, 2019 a clause 101A has been inserted to Second Schedule of Income Tax Ordinance, 2001.

It said: “The provisions of Section 231A shall not apply to Pak Rupee account if the deposits in the account are made solely from foreign remittances credited directly into such account.” The Section 231A is related to deduction of withholding tax on cash withdrawal from banking system.

The government through the latest Act already exempted deduction of withholding tax on cash withdrawal by filers of income tax returns.

The instant clause also exempts the non-filers of income tax returns if their bank accounts receive foreign remittances.

Sources in Federal Board of Revenue (FBR) said that the measures have been taken to promote inflows of foreign remittances through normal banking system.

The sources further said that on normal transactions by non-filers a tax rate of 0.6 percent will apply on cash withdrawal of Rs50,000 per day.