Own Money On Cars: The Government Has Finally Taken An Action!

Withholding tax to be paid by Punjab and Islamabad citizens for selling the car within three months of purchase!

Own Money On Cars


Own Money on Cars to be removed

Own money on cars is a major headache for the local car buyers. This culture is prevailing for many years in the country. However, despite all the complaints and reservations, there were no practical steps observed against it. In February 2021, President Arif Alvi issued an ordinance to implement a withholding tax to terminate the culture of own money on cars. Although it seemed like many other promises that reached nowhere, the latest updates in this regard are setting new hopes.

Withholding Tax In Punjab and Islamabad

The Punjab government and Islamabad capital authorities have finally imposed the withholding tax on the buyers. This means that if you buy a car within Punjab or Islamabad, and decide to sell it within three months of purchase, you will have to pay the tax. While this may be true, the tax amount varies based on the power block of your car.

Tax Details Category Wise

Own Money on Cars to be removed

The tax will be imposed based on the car engine category. The details are below:

Engine Withholding Tax
Up to 1000cc Rs. 50,000
2000cc and above Rs.200,000
1000cc to 2000cc Rs.100,000


What Is Own Money?

Own Money on Cars to be removed

Own money on cars is an additional amount paid to the dealerships for immediate delivery of cars. This means that if you want to buy a brand new car from any dealership, you will either have to follow the right channel – book your car and wait for 5-6 months – or pay additional own money to get it on spot. While this may be true, it is important to remember that the own money culture is an unfair advantage to dealerships. So, this practice should never be encouraged.

The government needs to keep a close eye on the automobile sector of Pakistan. Most of the buyers tend to pay their own money on cars due to the late delivery schedules followed by most automakers. It is equally important to speed up the delivery schedules to eradicate the own money culture completely from the country. For now, the consumers of Punjab and Islamabad will have to pay the withholding tax. However, we may also see the implementation of this ordinance in other provinces of the country.


Talal Farooqi
I'm a mass media graduate with a great deal of interest in blogging and copywriting. I'm told that I'm good with words. So, feel free to check out my work and I hope you have a good time reading my pieces of writing.

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