FBR has announced a 20.5% tax on cash transactions exceeding Rs. 200,000, starting from July 1 under the Finance Act 2025.
This new tax applies only to business-related cash transactions and is aimed at non-filers those who are not registered in the tax system. The goal is to increase tax collection and bring more transparency into the economy.
FBR has clarified that this tax does not apply to certain types of payments. Salaries, capital gains, property income, and agricultural purchases are all excluded from this rule. These exceptions have been made to avoid putting extra burden on ordinary citizens, farmers, and salaried individuals.
According to the FBR, many businesses deal in large amounts of cash without properly declaring their income. By taxing such transactions, the government wants to discourage unrecorded cash dealings and encourage people to use banking channels instead.
The FBR hopes this step will push more people to become tax filers and help formalize the economy. When more people pay taxes, the government can collect more revenue and use it for public welfare projects.
In short, if a non-filer makes a business-related cash transaction of over Rs. 200,000, they will now have to pay 20.5% tax on that amount.
This move is part of the government’s wider efforts to reduce tax evasion, promote financial transparency, and strengthen the country’s economy in the long run.
