The Federal Board of Revenue (FBR) has made it compulsory for banks to submit withholding tax info on cash withdrawals exceeding Rs. 50,000.
Note that this is only for accounts with withdrawals exceeding Rs. 1 million or more every month and is only for non-filers.
The board has released an SRO to this effect. Earlier, FBR had asked banks to share the info of account holders whose withdrawals ranged between Rs. 50,000 and Rs. 1,000,000. However, it didn’t ask for the record of withholding tax collected from these account holders.
In an amendment to the Income Tax Ordinance (ITO), a Section 165 A was inserted into the ITO, making it compulsory for the banks to provide online access to their central database containing details of account holders.
However, the banks refused to provide access because of banking data confidentiality. In order to solve the issue, the amendment now makes it compulsory for the banks to disclose the details of tax collected on these cash withdrawals.
Also, the banks will be required to share info about certain income tax filers along with details of non-filers with the FBR.