Withholding Tax (WHT) is automatically deducted at source during various transactions, such as bank withdrawals, business invoices, advertising, and service contracts. The good news? Filers pay significantly less than non-filers in almost every category.
Once you submit your income tax return, your name appears in the Active Taxpayers List (ATL), making you eligible for reduced tax rates across the board.
Bank Transactions
| Transaction Type | Filer | Non-Filer |
|---|---|---|
| Bank Withdrawal over Rs. 50,000 | 0.3% | 0.6% |
| Cross Cheques, Pay Orders, Demand Drafts | Exempt | Exempt |
Example: For every Rs. 100,000 withdrawn from your account:
- Filer pays Rs. 300
- Non-filer pays Rs. 600
Business Payments & Commercial Transactions
| Activity | Filer | Non-Filer |
|---|---|---|
| Supplies from Distributors | 3% | 3.5% |
| Export of Goods | 4% | 6% |
| Sale of Other Goods | 4.5% | 6.5% |
| Electronic or Print Media Advertising | 1.5% | 12%–15% |
| Travel Agency Services (Company) | 8% | 12% |
| Travel Services (Non-Company) | 10% | 15% |
| Contract Execution (Company) | 7% | 10% |
| Contract Execution (Non-Company) | 7.5% | 10.5% |
| Sale of Petroleum Products at Petrol Pump | 12% | 15% |
Note: For businesses, becoming a filer is essential to avoid high tax deductions on invoices and contracts.
Why This Matters
- ❌ Non-filers pay almost double in many categories.
- ✅ Filers benefit from reduced WHT and have a competitive edge in business.
- A single transaction, especially in advertising or contract execution, can cost thousands more if you’re not on the ATL.
Join the Active Taxpayers List & Start Saving
Being a filer doesn’t just reduce your withholding tax — it enhances your credibility, helps in securing business contracts, and improves your financial profile.