Government to give tax benefits to individuals, non-filers to pay 0.4percent tax on bank transaction

The Government to announce Federal Budget for 2017-18 by end this month would likely to give tax benefits to individuals raising the bar of exemption to Rs 500,000 from Rs 400,000 while would charge 0.4 percent as withholding tax on all the bank transaction from non-filers.

The government is likely to keep the tax rate for the individuals for the next fiscal year but may give benefit to smaller segment of tax payers.

The government would pass the bill to impose withholding tax of 0.4 percent on every bank transaction executed by the non-filers like withdrawal of cash, payorder, draft or even cheque issuance. During the current fiscal year the government has to pass a nod from the Economic Coordination Committee to impose 0.4 percent on non-filers.

However filers have to pay 0.3 percent on cash withdrawal in excess of Rs 50000 while they are exempted from this tax if transaction done through issuance of cheque, payorder or draft. The main aim of the government has been tapped the movement of cash transaction as it generally promote movement of un tax funds.

Moreover, the government is likely to set revenue target of Rs 4 trillion during 2017-18 as against target of Rs 3.6 trillion.