How is tax on cash withdrawal worked out?
The bank adds up the cash you withdraw in a day. If you are not on the Active Taxpayers' List and that total is more than Rs 50,000, it deducts 0.8% of the total. If the total is Rs 50,000 or less, or you are on the list, nothing is deducted under section 231AB.
What section 231AB says
(1) Every banking company shall deduct advance adjustable tax at the rate of 0.8% of the cash withdrawal from a person whose name is not appearing in the active taxpayers' list on the sum total of the payments for cash withdrawal in a day, exceeding fifty thousand rupees.
Explanation. - For removal of doubt, it is clarified that the said fifty thousand rupees shall be aggregate cash withdrawals in a single day.
The text applies the rate to the sum total once it exceeds Rs 50,000. It does not carve out the first Rs 50,000, so a day's total of Rs 50,001 carries tax on the whole amount, not on one rupee. The rate was 0.6% before the Finance Act, 2025 substituted 0.8%.
Examples at 0.8%
| Cash withdrawn in a day | Not on the ATL | On the ATL |
|---|---|---|
| Rs 50,000 | Rs 0 | Rs 0 |
| Rs 50,001 | Rs 400 | Rs 0 |
| Rs 100,000 | Rs 800 | Rs 0 |
| Rs 250,000 | Rs 2,000 | Rs 0 |
| Rs 1,000,000 | Rs 8,000 | Rs 0 |
Section 114C(1)(d) separately says a banking company shall not allow cash withdrawal beyond a threshold in the Fifteenth Schedule, which sets an annual limit of one hundred million rupees for an individual not eligible under that section. Section 114C(5) says these restrictions come into force on a date the Federal Government notifies in the official Gazette. This calculator does not check that limit.
Where the rates come from
Every rate is read from the Income Tax Ordinance, 2001 as consolidated by FBR. The rates on this page were last checked against the official text on 2026-09-26.
- Income Tax Ordinance, 2001, section 231AB, advance tax on cash withdrawal, printed page 535 (as amended to 2026-06-30) official file
- Income Tax Ordinance, 2001, section 181A, Active Taxpayers' List (as amended to 2026-06-30) official file
- Income Tax Ordinance, 2001, section 100BA, persons not on the Active Taxpayers' List (as amended to 2026-06-30) official file
- Income Tax Ordinance, 2001, Tenth Schedule, rule 10(ga), printed page 784 (as amended to 2026-06-30) official file
- Income Tax Ordinance, 2001, section 114C, restriction on economic transactions (as amended to 2026-06-30) official file
Common questions
How much tax does a bank deduct on cash withdrawal in Pakistan?
Under section 231AB of the Income Tax Ordinance, 2001, a banking company deducts advance adjustable tax at 0.8% of the cash withdrawal from a person whose name is not on the Active Taxpayers' List, where the sum total of cash withdrawals in a day exceeds Rs 50,000.
Is there tax on cash withdrawal for people on the Active Taxpayers' List?
No. Section 231AB applies only to a person whose name is not appearing in the Active Taxpayers' List. The Tenth Schedule, which raises most rates for people not on the list, excludes tax deducted under section 231AB in rule 10(ga), so the rate stays at 0.8%.
Is the tax charged only on the amount above Rs 50,000?
The wording of section 231AB applies 0.8% to the sum total of the payments for cash withdrawal in a day once that total exceeds Rs 50,000. It does not say the first Rs 50,000 is left out, so this calculator applies the rate to the whole day's total.
Does the Rs 50,000 limit apply per account or across all accounts?
The Explanation to section 231AB says the Rs 50,000 is aggregate cash withdrawals in a single day. The earlier section 231A, omitted in 2021, spelled out "from all the bank accounts". The current Explanation does not repeat those words.
Can I get the tax deducted on cash withdrawal back?
Section 231AB calls it advance adjustable tax, so it can be adjusted against the tax payable in the return of income for the year. Whether any amount is refunded depends on the final tax liability worked out in that return.