Withholding taxes in banking 2026-27: profit, cash withdrawals, cards and prize bonds
Every tax your bank deducts in 2026-27: 20% on profit (40% for non-filers), 0.8% on non-filers’ cash withdrawals, card payments abroad and prize bond tax.
Work it out with the Bank profit calculator →
Your bank does more than hold your money: it also deducts tax for FBR. These deductions are withholding taxes, and most of their rates depend on whether your name is on the Active Taxpayers’ List (ATL). Using FBR’s withholding tax rate card for tax year 2027 and the Income Tax Ordinance as amended to 30 June 2026, this guide lists every deduction an ordinary account holder can meet in 2026-27, and the ones that no longer exist.
At a glance: 2026-27 rates
| Deduction | Section | Filer | Non-filer |
|---|---|---|---|
| Profit on bank deposits and savings accounts | 151 | 20% | 40% |
| Profit on National Savings schemes | 151 | 15% | 30% |
| Cash withdrawals (over Rs 50,000 a day) | 231AB | None | 0.8% |
| Card payments abroad | 236Y | 0.5% | 1% |
| Prize bond prizes | 156 | 15% | 30% |
Check whether you are on the list by sending your CNIC number by SMS to 9966 or on FBR’s website. Your bank checks the same status each time it deducts.
Tax on profit (section 151)
From profit on a savings account, term deposit or any bank account, the bank deducts 20% for filers and 40% for non-filers. There is no minimum: even a few hundred rupees of profit is taxed. If the bank deducted zakat, the tax is worked out on the profit after the zakat.
Example: Rs 1 million at 10% a year (the SBP minimum savings rate):
| Tax | Filer | Non-filer |
|---|---|---|
| Profit for the year | Rs 100,000 | Rs 100,000 |
| Tax | Rs 20,000 | Rs 40,000 |
| Profit in hand | Rs 80,000 | Rs 60,000 |
| Rate after tax | 8% | 6% |
So simply not being a filer costs Rs 20,000 a year on this one account. Try your own amount in the bank profit calculator.
Is it final? Section 151(3) makes the deduction a minimum tax. For individuals and AOPs, section 7B taxes profit on debt of up to Rs 5 million a year separately from other income at the same rate, so for an ordinary saver the bank’s deduction settles the matter. Above that, the profit joins your normal income and is taxed at slab rates.
National Savings, government securities and sukuk
Profit on National Savings certificates and accounts is taxed at 15% for filers and 30% for non-filers. Behbood certificates, the Pensioners’ Benefit Account and the Shuhada Family Welfare Account have no withholding and tax capped at 5%; our National Savings comparison covers them.
For sukuk issued by a company or SPV, the rate card sets 10% for an individual or AOP whose return is under Rs 1 million and 12.5% above Rs 1 million (doubled for non-filers).
Cash withdrawal tax (section 231AB)
This tax is in force in 2026-27, but only for people not on the Active Taxpayers’ List. When the total of all cash withdrawals in one day exceeds Rs 50,000, the bank deducts 0.8%. The Finance Act 2025 raised the rate from 0.6% to 0.8%, and the Finance Act 2026 left it unchanged.
- Example: a non-filer withdraws Rs 200,000 in cash in one day: 200,000 × 0.8% = Rs 1,600.
- The limit applies to the day’s total, so splitting a withdrawal into smaller amounts does not help.
- It is advance, adjustable tax, and it is not doubled for non-filers (Tenth Schedule rule 10).
- Online transfers, cheques paid to others and pay orders carry no withholding now: the old sections 231A, 231AA and 236P were omitted by the Finance Act 2021.
Card payments abroad (section 236Y)
When you pay a foreign website or a shop abroad with a debit, credit or prepaid card, the bank collects advance tax as it sends the money out. The Finance Act 2026 cut the rate from 5% to 0.5%; non-filers pay 1%. On a Rs 100,000 online purchase a filer pays Rs 500 and a non-filer Rs 1,000. This tax is adjustable. Customs on goods you order from abroad is a separate matter; see customs duty on online orders.
Prize bonds and prizes (section 156)
A prize bond or crossword prize has 15% deducted for filers and 30% for non-filers; a raffle, lottery, quiz or company sales-promotion prize has 20% and 40%. This is a final tax. If the prize is not cash, the tax is charged on its market value.
Who pays less or nothing
- Non-residents: profit on a non-resident’s foreign currency account, and on a rupee account funded only with money remitted from abroad, is exempt (Second Schedule Part I clauses 78 and 79). Roshan Digital Account holders should read our Roshan Digital Account guide.
- Not required to file: if you were not required to file a return, the bank can notify the Commissioner under rule 2 of the Tenth Schedule; if no order comes within 30 days, the normal rate applies. Check your position with the tax return filing checker.
- Exemption certificate: if your income is exempt or taxed at a lower rate, you can apply in writing to the Commissioner for a certificate under section 159 and give it to the bank.
How to see and claim what was deducted
- Ask your bank for the year’s withholding tax certificate; it shows deductions on profit, cash withdrawals and cards.
- Enter these deductions in your return; the adjustable ones (cash withdrawal, cards) are subtracted from the tax you owe.
- A non-filer who wants the lower rate from next year should file on time: once your name is on the list, the bank applies the lower rate. See how to become a filer.
Frequently asked questions
Is there tax on cash withdrawal from a bank in 2026-27?
Only for non-filers. Section 231AB makes banks deduct 0.8% of cash withdrawn by a person not on the Active Taxpayers’ List when the day’s total cash withdrawals exceed Rs 50,000. Filers pay nothing. The tax is adjustable against your income tax when you file a return.
How much tax is deducted on savings account profit?
20% of the profit for filers and 40% for non-filers, under section 151. It is deducted every time profit is credited, with no minimum amount. On Rs 1 million at 10% that is Rs 20,000 a year for a filer and Rs 40,000 for a non-filer.
Can I get back tax the bank deducted?
Only to the extent it is adjustable. Cash withdrawal tax and card tax are adjustable advance tax, so you can claim them in your return. Tax on bank profit is a minimum tax, and for individuals with profit on debt up to Rs 5 million it is charged as a separate block at the same rate, so in practice it is rarely refunded. Becoming a filer is what cuts the rate in half for the future. See how to become a filer.
Is there tax on prize bond prizes?
Yes. Section 156 deducts 15% from a prize bond prize for filers and 30% for non-filers, and it is a final tax: nothing more is due and nothing is refunded. On a Rs 100,000 prize a filer receives Rs 85,000.
I am not required to file a return. Must I pay the non-filer rate?
Not necessarily. Rule 2 of the Tenth Schedule lets the bank notify the Commissioner electronically, with your name, CNIC and the reason you were not required to file. If the Commissioner passes no order within 30 days, the claim is treated as accepted and the normal rate applies. Ask your branch whether it will file the notice.
Calculators for this guide
- Bank profit calculatorWork out the monthly, quarterly or half-yearly profit on a bank savings account after 20% (filer) or 40% (non-filer) withholding tax.
- National Savings calculatorAfter-tax profit on Behbood, Regular Income, Defence, Special and Short Term certificates, Pensioners’ Benefit and Savings Account, monthly or at maturity.
- Tax return filing checkerCheck if you must file an income tax return for tax year 2026: income above Rs 600,000, property, a car above 1000cc, an NTN or other section 114 tests.
Sources
- FBR Withholding Income Tax Rate Card, tax year 2027, updated up to 30 June 2026 as per Finance Act 2026: sections 151, 151(1A), 156, 231AB, 236, 236Y
- Income Tax Ordinance 2001 as amended up to 30 June 2026 (FBR): sections 7B, 151, 156, 159, 231AB, 236Y; First Schedule Part III Divisions IA, IB, VI and Part IV Division XXVII; Second Schedule Part I clauses (78) and (79), Part II clause (5AC); Tenth Schedule rules 1, 2 and 10
- FBR: Check Active Taxpayer Status (SMS 9966 and online)
- Bank profit example uses 10%, the SBP minimum savings rate used by the PakHisaab bank profit calculator (cited in its sources)
This guide explains the rules for general information. It is not official, legal or tax advice. Rules change, so check the official source or a qualified professional before acting. See how we check our information.