The Federal Board of Revenue has also abolished taxes on remittances sent legally through money transfer or exchange companies.
Earlier, there was no tax on remittances from banks. A circular has been issued in this regard and embassies abroad have also been informed. The circular issued by the FBR also gives historical references to remittances and taxes on them.
The Income Tax Ordinance 2021 also exempted Pakistanis living abroad from sending money to Pakistan through banks. However, the sender also had to provide proof of his earnings abroad.
There was no limit on the amount to be sent for tax exemption till 2015. However, tax exemption was up to Rs 10 million in 2018 which was increased to Rs 5 million in 2019.
However, four conditions were also laid down for obtaining tax exemption on remittances. As remittances are in foreign currency, remittances should be sent and received through normal banking channels and the bank will also issue a certificate of receipt.
Withdrawal of cash from non-filers and non-filer bank transfers has also been abolished after the holding tax was abolished.