Cash Withdrawal Tax in Pakistan Explained
5 min read · Updated 2026-07-05
Why Rs. 800 vanished from a Rs. 100,000 withdrawal — Section 231AB in plain English.
What Section 231AB is
Section 231AB requires banks to deduct advance income tax from cash withdrawals made by people who are not on the Active Taxpayer List. The rate is 0.8% of the withdrawal.
The daily threshold
The tax is triggered by the total cash you withdraw in a single day, not by any one transaction. Splitting a withdrawal across several visits to the same bank on the same day does not avoid it, because the bank aggregates the day's withdrawals.
Filers pay nothing
Section 231AB applies only to persons not appearing on the ATL. If you are a filer, no deduction is made under this section at all — this is one of the few taxes where filer status removes the charge entirely rather than halving it.
Why it adds up
0.8% sounds small. Withdraw Rs. 100,000 a week and it is Rs. 800 each time — over Rs. 41,000 a year, quietly, without a single bill or notice.
Calculate your cash withdrawal tax
See what a single withdrawal — and a year of them — costs.
Open the calculatorFrequently asked questions
Does this apply to ATM withdrawals?
Yes. It applies to cash withdrawn from your bank account, including through ATMs, once the daily aggregate crosses the threshold.
Is the deduction refundable?
It is advance tax and adjustable against your annual liability if you file a return. Non-filers, who are the only ones charged, generally do not file and so do not recover it.
Do digital transfers attract this tax?
Section 231AB targets cash withdrawals. Moving money by transfer rather than cash is one way filers and non-filers alike avoid the deduction.
Rates sourced from FBR's Finance Act 2025 and Finance Act 2026. Tax law can change — always verify current rates at fbr.gov.pk before relying on this for a real transaction. Last updated 1 July 2026.