Cash Withdrawal Limit Raised to Rs75,000 Under New WHT Rate

The federal government has proposed increasing the withholding tax (WHT) rate on cash withdrawals by non-filers from 0.6% to 0.8%, while also raising the daily withdrawal threshold from Rs50,000 to Rs75,000.

The Federal Board of Revenue (FBR) Chairman, Rashid Mahmood Langrial, revealed the changes during a meeting of the National Assembly’s Standing Committee on Finance. He clarified that a 1% tax rate mentioned in the proposed budget for 2025-26 was an error, stating, “the actual proposed rate was 0.8%.”

Committee Chairman Naveed Qamar argued that the previous threshold of Rs50,000 was too low, suggesting it should be increased to at least Rs100,000. However, after discussions, the committee and FBR agreed on a compromise limit of Rs75,000.

Langrial assured that “all changes to tax laws related to the banking sector were made with the consent of the State Bank of Pakistan.”

Meanwhile, Minister of State for Finance Bilal Azhar Kayani informed the committee that the Finance Bill 2025-26 includes tax relief for salaried individuals across all income brackets, particularly benefiting those earning up to Rs3.2 million annually.

The Federal Budget 2025-26, with an outlay of Rs17,573 billion, was presented on June 10, focusing on “inclusive and sustainable economic growth.”

Finance Minister Muhammad Aurangzeb, while presenting the budget, stated, “This budget is a beginning of a strategy, crafted to promote a competitive economy.” He emphasized that the measures aim to “bolster exports and foreign exchange reserves” while preventing payment imbalances and boosting productivity.

The budget reflects the government’s commitment to “bringing fundamental changes in the country’s economy,” aligning with broader fiscal reforms.