ISLAMABAD: Starting July 1, 2025, banks will no longer permit individuals who are not active taxpayers to withdraw cash beyond a specified limit, according to recent amendments made to the Finance Bill 2025-26.
The revised law targets non-filers, placing restrictions on large cash withdrawals from their bank accounts. Under the updated Section 114C of the Finance Bill—titled “Restriction on Economic Transactions by Certain Persons”—banks will be legally barred from processing withdrawals that exceed a threshold set by the Federal Board of Revenue (FBR).
The original version of the bill had already proposed that banks should not open or maintain current, savings, or investor portfolio securities accounts for individuals flagged by the FBR, with limited exceptions for Asaan Accounts and Pensioner Accounts. It also included a proposal to cap cash withdrawals for certain individuals.
However, the amended version now adds a clearer directive:
“A banking company shall not allow cash withdrawal from any of the bank accounts of any person, exceeding the threshold as specified in the Fifteenth Schedule.”
The precise withdrawal limit will be defined in the Fifteenth Schedule of the Finance Bill 2025-26.
In another significant amendment, the government has introduced a change regarding the taxation of pension income. Individuals receiving pension or annuity payments—classified as “income from other sources”—will now be taxed at a rate specified in the proviso to clause (2) of the applicable tax division.
These amendments are part of broader efforts to enhance tax compliance and formalize economic transactions by restricting privileges for non-filers.
