The government is likely to increase the financial pressure on non-filers in the upcoming fiscal year by doubling the withholding tax on their bank cash withdrawals. This move is aimed at generating an extra Rs. 15–20 billion in revenue for the 2025–26 budget, according to sources.
A proposal is being considered to raise the current withholding tax on cash withdrawals by non-filers from 0.6 percent to 1.2 percent. Currently, if a non-filer withdraws more than Rs. 50,000 in a single day through ATMs or using credit cards, they are taxed at 0.6 percent.
Under the Finance Act 2023, the government had reintroduced this tax measure through Section 231AB, requiring banks to deduct a 0.6 percent adjustable tax on daily cash withdrawals exceeding Rs. 50,000 from people not listed on the Active Taxpayer List (ATL). This rule also applies to ATM and credit card withdrawals.
