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Tax Laws Simply
Expert income tax & sales tax guides, calculators, and tutorials for salaried individuals, freelancers, and businesses — updated per FBR 2025–26.
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Frequently Asked Questions
Quick answers to the most common tax questions in Pakistan — based on the Income Tax Ordinance, 2001 and Sales Tax Act, 1990.
For Tax Year 2025-26, the salary income tax slabs are:
- Up to Rs. 600,000 — 0%
- Rs. 600,001 to 1,200,000 — 1% of amount exceeding Rs. 600,000
- Rs. 1,200,001 to 2,200,000 — Rs. 6,000 + 11% of amount exceeding Rs. 1,200,000
- Rs. 2,200,001 to 3,200,000 — Rs. 116,000 + 23% of amount exceeding Rs. 2,200,000
- Rs. 3,200,001 to 4,100,000 — Rs. 346,000 + 30% of amount exceeding Rs. 3,200,000
- Above Rs. 4,100,000 — Rs. 616,000 + 35% of amount exceeding Rs. 4,100,000
Use our Salary Tax Calculator to calculate your exact tax in seconds.
Yes. If an immovable property is purchased and sold within the same tax year, the advance tax collected on the sale of the property may be treated as Minimum Tax and cannot be adjusted against your overall tax liability, which can increase the effective tax cost of the transaction.
An Active Filer appears on FBR's Active Taxpayers List (ATL) and pays lower withholding tax rates — for example, 4.5% on property sale (Section 236C) and 1.5% on property purchase (Section 236K). A Late Filer also appears on ATL but pays higher rates — 7.5% on property sale and 4.5% on property purchase — and must pay a Rs. 1,000 ATL surcharge. A Non-Filer does not appear on ATL and pays the highest rates — 11.5% on property sale and 10.5% on property purchase.
Under Section 115 of the Income Tax Ordinance, 2001, the following persons are not required to file a return of income solely due to the ownership criteria under Section 114(1)(b)(iii) to (vi): a widow, an orphan below the age of 25 years, a disabled person, and a non-resident person (for immovable property ownership only). However, if any of these persons have taxable income exceeding Rs. 600,000, they must still file a return under Section 114(1)(a).
Pakistani freelancers who receive payments from foreign clients through proper banking channels are subject to withholding tax under Section 154A of the ITO 2001. For IT and IT-enabled services registered with PSEB, the rate is 0.25% for active filers and 0.5% for non-filers. For all other service exports, the rate is 1% for active filers and 2% for non-filers. This is a Final Tax — no additional tax is payable on this income when filing the annual return.
Section 7E of the ITO 2001 imposes a 1% tax on the fair market value of immovable property held in Pakistan. However, certain properties are exempt including: one residential property of the owner, property used for business or manufacturing, agricultural land, properties held by widows, orphans below 25 years, and disabled persons, and properties whose annual value does not exceed Rs. 25,000. Properties located outside Pakistan are also not subject to Section 7E.
The advance tax deducted from electricity bills under Section 235 of the ITO 2001 is adjustable for commercial and industrial consumers — meaning it can be credited against the annual tax liability. However, for domestic consumers whose electricity bill exceeds a certain threshold, it may be treated differently. The dual appearance in both tabs reflects this distinction between consumer categories under the FBR rate card.
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Need help with tax filing?
Get expert assistance from Umair Mubeen, a tax educator & content creator based in Karachi.