KARACHI: Federal Budget 2018-19 has proposed reduced rate of advance tax on banking transactions by non-filers.
Under section 236P of the Ordinance banks are obliged to collect advance tax at the rate of 0.6 percent from non-filers on non-cash banking transactions such as transfer of funds through demand draft, pay order, cash deposit receipt cheques/clearing, online transfers, direct debit, telegraphic transfers etc, which are in excess of Rs.50,000 per day.
This rate has temporarily been reduced to 0.4 percent and is extended periodically pursuant to the recommendation of the Economic Coordination Committee (ECC) of the cabinet. In order to provide certainty and to allay concerns regarding likelihood of restoration of 0.6 percent tax, such rate of tax for non-filers has been reduced to 0.4 percent on a permanent basis.