ATM Cash Withdrawal Tax Pakistan
Pakistan has always relied heavily on cash transactions, but now the government is moving toward a modern digital economy.
The Federal Board of Revenue (FBR) has introduced a new policy under ATM Cash Withdrawal Tax Pakistan 2025, aiming to expand the tax network, encourage non-filers to register, and promote online banking.
This new policy affects every bank account holder — whether you are a tax filer or not.
If you withdraw cash regularly, it’s important to understand how much tax you’ll now pay, what the new daily limits are, and what goals the government hopes to achieve through this change.
Let’s break down all the important details of the ATM Cash Withdrawal Tax Pakistan 2025 and see why it matters for every citizen.
Key Details:
| Detail | Information |
|---|---|
| Announced By | Federal Board of Revenue (FBR) |
| New Tax Rate for Non-Filers | 1.2% on daily ATM withdrawals above Rs. 75,000 |
| Tax Rate for Filers | 0.3% on daily withdrawals above Rs. 50,000 |
| New Daily Withdrawal Limit | Rs. 75,000 |
| Monitoring System | Centralized real-time link with FBR |
What Is the ATM Cash Withdrawal Tax and Why Was It Introduced?
This tax applies whenever you withdraw money from your bank account using an ATM.
The purpose isn’t just to collect tax — it’s to create a documented economy, where all financial transactions are traceable.
The government aims to reduce dependence on cash, encourage digital payments, and bring transparency to banking.
Both filers and non-filers are subject to this tax, but with different rates to push more people to register as taxpayers.
What’s New in ATM Cash Withdrawal Tax Pakistan 2025?
1. Higher Tax Rate for Non-Filers
Non-filers will now pay 1.2% tax if they withdraw more than Rs. 75,000 per day.
Previously, the rate was 0.6%, meaning it has doubled — a move designed to pressure non-filers to register with the FBR.
2. Increased Daily Withdrawal Limit
Citizens can now withdraw up to Rs. 75,000 per day tax-free.
Withdrawals above this limit will be taxed based on filer status.
3. Filers Also Included
For the first time, even filers will pay a small tax of 0.3% on withdrawals above Rs. 50,000 per day.
This ensures fairness while keeping the rate minimal for compliant taxpayers.
4. Real-Time FBR Monitoring
All banks are now digitally linked to the FBR’s monitoring system.
Every transaction is verified using your CNIC and tax profile, and tax is deducted automatically — leaving no chance for evasion or error.
ATM Cash Withdrawal Tax 2025 – Filers vs. Non-Filers
| Account Type | Amount Withdrawn | Tax Rate | Tax Deducted |
|---|---|---|---|
| Filer | Rs. 60,000 | 0.3% | Rs. 180 |
| Non-Filer | Rs. 100,000 | 1.2% | Rs. 1,200 |
| Small Withdrawal | Rs. 40,000 | 0% | No Tax |
This table shows that non-filers pay up to 75% more tax than filers — a clear reason why becoming a filer is financially smarter.
Purpose and Policy Background
According to the government, ATM Cash Withdrawal Tax Pakistan 2025 is not just a revenue-collection tool.
Its main goals are to:
- Encourage more people to file tax returns.
- Promote digital payments and reduce cash use.
- Bring undocumented income into the formal economy.
- Increase transparency in banking transactions.
This initiative is part of the “Digital Pakistan Vision 2025”, which aims to build a connected, transparent, and inclusive financial system.
How to Check ATM Cash Withdrawal Tax Deductions
| Method | Description |
|---|---|
| Bank App or Online Portal | Tax details appear beside each transaction. |
| Monthly E-Statement | Look for “Withholding Tax on Cash Withdrawals.” |
| FBR Portal | Visit iris.fbr.gov.pk to verify your deductions. |
| SMS Service | Some banks send instant alerts for each tax deduction. |
Impact on Filers and Non-Filers
For Filers
- Pay only 0.3% on withdrawals over Rs. 50,000.
- Enjoy tax-free digital transactions.
- Get better credibility and benefits from FBR schemes.
For Non-Filers
- Pay 1.2% on withdrawals over Rs. 75,000.
- Face more scrutiny from banks and FBR.
- May find it harder to open business or foreign accounts.
Smart Tips to Reduce ATM Cash Withdrawal Tax
- Become a Filer:
Register with the FBR and file your annual tax return.
This reduces your tax rate from 1.2% to 0.3%. - Use Digital Payments:
Pay bills and make purchases using debit/credit cards or mobile banking apps — these are tax-free. - Plan Withdrawals:
Instead of withdrawing Rs. 100,000 in one go, withdraw Rs. 50,000 over two days to stay below the taxable limit. - Check Your Bank Statements:
Review your e-statements monthly and report errors immediately. - Avoid Excessive Cash Use:
Use mobile wallets like Easypaisa, JazzCash, or NayaPay for small payments to minimize cash dependency.
Economic Impact of ATM Cash Withdrawal Tax 2025
| Area | Expected Benefit |
|---|---|
| Tax Compliance | More people will file tax returns. |
| Digital Banking | Higher adoption of online payments. |
| Cash Dependency | Significant reduction in cash use. |
| Revenue Growth | Increased FBR collections. |
| Transparency | Better tracking of money flow. |
Experts believe this move will help Pakistan transition to a digitally documented economy, ensuring long-term stability and compliance with IMF goals.
FAQs – Frequently Asked Questions
1. What is the ATM Cash Withdrawal Tax rate in 2025?
Filers pay 0.3% on withdrawals above Rs. 50,000 per day, while non-filers pay 1.2% above Rs. 75,000 per day.
2. Does every ATM transaction have tax?
No. Withdrawals below the daily threshold are completely tax-free.
3. How can I verify if tax was deducted?
You can check through your mobile banking app, e-statement, or the FBR IRIS portal.
4. Are online payments also taxed?
No. Digital transactions such as card payments and mobile app transfers are tax-exempt.
5. How can I become a tax filer in Pakistan?
Visit iris.fbr.gov.pk, create an account, and submit your annual income tax return.
Conclusion
The ATM Cash Withdrawal Tax Pakistan 2025 marks an important shift toward a digital and transparent economy.
While non-filers face higher deductions, tax filers enjoy lower rates and greater financial freedom.
By registering as a filer, planning your withdrawals smartly, and embracing digital banking, you can save more money and help Pakistan move toward a stronger, documented, and progressive economy.
