Add your promotional text...
Income tax rates describing the percentage at which individuals, corporate entities or other organizations are taxed, in Pakistan the Federal Board of Revenue (FBR) uses an unconventional tax rate system, in which the percentage of tax charged increases as the amount of the person's or entity's taxable income increases, a tax rate results in a higher rupee amount collected from taxpayers with greater incomes.
To help build and maintain the infrastructures used in a country, the government usually taxes its residents. The tax collected is used for the betterment of the nation, of society, and of all living in it. In Pakistan and many other countries around the world, a tax rate is applied to some form of money received by a taxpayer. The money could be income earned from salary, wages, investment income (dividends, interest), capital gains from investments, profits made from goods or services rendered, etc. The percentage of the taxpayer’s earnings or money is taken and remitted to the federal government.
When it comes to income tax, the tax rate is the percentage of an individual's taxable income or a
RIZWAN & ASSOCIATES - LLP | INCOME TAX RATES- PAKISTAN
corporate entity's earnings that is owed to federal government. The tax rate that is applied to an individual’s earnings depends on the marginal tax bracket that the individual falls under. The marginal tax rate is the percentage taken from the next rupee of taxable income above a pre-defined income limit.
TAX RATES | TAX YEAR 2022-2023
WITHHOLDING TAX RATES ON IMPORTS
Sec. 148, Part II, 1st Schedule | Part I-III, Twelfth Schedule
The rate of advance tax to be collected by the Collector of Customs:
Table: Tax on Petroleum Products
TAX RATES FOR SALARIED INDIVIDUALS
Sec. 149, Division I, Part I, 1st Schedule
Where the income of an individual chargeable under the head "salary" exceeds seventy-five percent of his taxable income, the following rates of tax will apply, which are unchanged from the previous tax year:
Table: Withholding Tax Rates on Imports
WITHHOLDING TAX ON IMPORT OF MOBILE PHONES
Sec. 148
Table: Tax Rates for Salaried Individuals
TAX RATES FOR INDIVIDUALS & ASSOCIATION OF PERSONS
Division I, Part I, 1st Schedule
No change in the tax rates for individuals and association of persons has been made. the tax rates applicable for the Tax Year 2022 are set out in the following table:
Table: Tax Rates for Individuals & Association of Persons
TAX RATES FOR COMPANIES
Division II, Part I, 1st Schedule
Tax rates for a banking company, public & private company, small company, alternate corporate tax and modaraba are given in the following table:
Table: Tax Rates for Companies | Where the taxpayer is a small company , tax shall be payable at the rate of 20% for the Tax Year 2023 and onward.
SUPER TAX
Rate of Super Tax on high earning persons (Sec. 4C)
Table: Super Tax
DIVIDEND TAX
Sec. 150
Person paying a dividend shall deduct tax from the gross amount of the dividend paid or collect tax from the amount of dividend in specie.
Table: Dividend Tax
TAX ON PROFIT ON DEBT & RETURN ON INVESTMENT IN SUKUKS
Sec. 151, Division 1A & 1B, Part III, 1st Schedule
Table: Tax on Profit on Debt & Return on Investment in Sukuks
TAX ON NON-RESIDENTS
Sec 152, Division IV, Part I, 1st Schedule
Table: Tax on Non-Residents
TAX ON GOODS, SERVICES & CONTRACTS
Sec. 153, Division III A, Part III, 1st Schedule
Table: Tax on Profit on Debt & Return on Investment in Sukuks
TAX ON NON-RESIDENTS
Sec 152, Division IV, Part I, 1st Schedule
Table: Tax on Goods, Services & Contracts
TAX RATES ON EXPORTS & EXPORT OF SERVICES
Sec. 154 & 154A, Division IV, Part III, 1st Schedule
Table: Tax Rates on Exports & Export of Services
TAX ON RENT OF IMMOVABLE PROPERTY
Sec. 155, Division V, Part III, 1st Schedule
Table: Tax on Rent of Immovable Property | The rate of tax to be deducted u/Sec. 155, in case of company shall be 15% of the gross amount of rent.
TAX ON PRIZES & WINNINGS
Sec. 156, Division VI, Part III, 1st Schedule
Table: Tax on Prizes & Winnings
TAX ON PETROLEUM PRODUCTS
Sec. 156A, Division VIA, Part III, 1st Schedule
Table: Tax on Petroleum Products
ADVANCE TAX ON PURCHASE, REGISTRATION AND TRANSFER OF MOTOR VEHICLES
Sec. 231B & 234, Division VII, Part IV, 1st Schedule
Table: Tax on Telephone and Internet
ADVANCE TAX AT THE TIME OF SALE BY AUCTION
Sec. 236A, Division VIII, Part IV, 1st Schedule
Table: Advance Tax on Purchase, Registration & Transfer
TAX ON BROKERAGE AND COMMISSION
Sec. 233, Division II, Part IV, 1st Schedule
Table: Tax on Brokerage and Commission
TAX ON ELECTRICITY CONSUMPTION
Sec. 235, Division IV, Part IV, 1st Schedule
Table: Tax on Electricity Consumption
TAX ON TELEPHONE AND INTERNET
Sec. 236, Division IV, Part IV, 1st Schedule
Table: Advance Tax at the time of sale by auction
ADVANCE TAX ON SALE & PURCHASE OF IMMOVABLE PROPERTY
Sec. 236C & 236K, Division X & XVIII, Part IV, 1st Schedule
Table: Advance Tax on Sale & Purchase of Immovable Property
ADVANCE TAX ON DISTRIBUTORS, DEALERS OR WHOLESALERS
Sec. 236G, Division XIV, Part IV, 1st Schedule
Table: Advance Tax on Distributors, Dealers or Wholesalers
ADVANCE TAX ON SALE TO RETAILERS
Sec. 236H, Division XV, Part IV, 1st Schedule
Table: Advance Tax on Sale to Retailers
COLLECTION OF ADVANCE TAX BY EDUCATIONAL INSTITUTIONS
Sec. 236I, Division XVI, Part IV, 1st Schedule
Table: Collection of Advance Tax by Educational Institutions
PAYMENT TO A RESIDENT PERSON FOR RIGHT TO USE MACHINERY & EQUIPMENT
Sec. 236Q, Division XXIII, Part IV, 1st Schedule
Table: Tax for Profit on Debt | As per 10th Schedule, Tax Rate shall be increased by 100% in case the person is not appearing in Active Taxpayers' List.
Profit on Debt exceeding Rs.36 million shall be subject to tax under normal law.
TAX ON SHIPPING OR AIR TRANSPORT INCOME OF A NON-RESIDENT PERSON
Table: Tax on Shipping or Air Transport Income
TAX ON RETURN ON INVESTMENT IN SUKUKS
Sec. 5AA, Division IB, Part III, 1st Schedule
Table: Payment to Resident Person in using Machinery & Equipment
TAX FOR PROFIT ON DEBT - OTHER THAN A COMPANY
Sec. 7B, Division III A, Part I, 1st Schedule
Table: Tax on Return on Investment | As per 10th Schedule, Tax Rate shall be increased by 100% in case the person is not appearing in Active Taxpayers' List
TAX ON CERTAIN PAYMENTS TO NON-RESIDENTS
Table: Tax on Certain Payments to Non-Residents | As per 10th Schedule, Tax Rate shall be increased by 100% in case the person is not appearing in Active Taxpayers' List
TAX ON INCOME FROM PROPERTY FOR INDIVIDUALS AND ASSOCIATION OF PERSONS
Sec. 15, Division V, Part I, 1st Schedule
Table: Tax on Income from Property
CAPITAL GAINS ON DISPOSAL OF SECURITIES
Sec. 37A, Division VII, Part I, 1st Schedule
Table: Capital Gains on Disposal of Securities | The rate of tax on cash settled derivatives traded on the stock exchange shall be 5% for the tax years 2018 to 2020.
A Mutual Fund or a Collective Investment Scheme or a REIT Scheme shall deduct Capital Gains Tax at the rates as specified below on Redemption of Securities, as specified below:
Provided further that in case of a stock fund if dividend receipts of the fund are less than capital gains, then the rate of tax deduction shall be 12.5%. No capital gains tax shall be deducted, if the holding period of the security is more than 4 years.
CAPITAL GAINS ON DISPOSAL OF IMMOVABLE PROPERTY (CAPITAL ASSETS)
Sec. 37(1A), Division VIII, Part I, 1st Schedule
Table: Capital Gains on Disposal of Immovable Property
CAPITAL GAINS ON DISPOSAL OF IMMOVABLE PROPERTY
Sec. 37(3A)
TAX RATES | TAX YEAR 2022-2023
WITHHOLDING TAX RATES ON IMPORTS
Sec. 148, Part II, 1st Schedule | Part I-III, Twelfth Schedule
The rate of advance tax to be collected by the Collector of Customs:
Table: Tax on Petroleum Products
TAX RATES FOR SALARIED INDIVIDUALS
Sec. 149, Division I, Part I, 1st Schedule
Where the income of an individual chargeable under the head "salary" exceeds seventy-five percent of his taxable income, the following rates of tax will apply, which are unchanged from the previous tax year:
Table: Withholding Tax Rates on Imports
WITHHOLDING TAX ON IMPORT OF MOBILE PHONES
Sec. 148
Table: Tax Rates for Salaried Individuals
TAX RATES FOR INDIVIDUALS & ASSOCIATION OF PERSONS
Division I, Part I, 1st Schedule
No change in the tax rates for individuals and association of persons has been made. the tax rates applicable for the Tax Year 2022 are set out in the following table:
Table: Tax Rates for Individuals & Association of Persons
TAX RATES FOR COMPANIES
Division II, Part I, 1st Schedule
Tax rates for a banking company, public & private company, small company, alternate corporate tax and modaraba are given in the following table:
Table: Tax Rates for Companies | Where the taxpayer is a small company , tax shall be payable at the rate of 20% for the Tax Year 2023 and onward.
SUPER TAX
Rate of Super Tax on high earning persons (Sec. 4C)
Table: Super Tax
DIVIDEND TAX
Sec. 150
Person paying a dividend shall deduct tax from the gross amount of the dividend paid or collect tax from the amount of dividend in specie.
Table: Dividend Tax
TAX ON PROFIT ON DEBT & RETURN ON INVESTMENT IN SUKUKS
Sec. 151, Division 1A & 1B, Part III, 1st Schedule
Table: Tax on Profit on Debt & Return on Investment in Sukuks
TAX ON NON-RESIDENTS
Sec 152, Division IV, Part I, 1st Schedule
Table: Tax on Non-Residents
TAX ON GOODS, SERVICES & CONTRACTS
Sec. 153, Division III A, Part III, 1st Schedule
Table: Tax on Profit on Debt & Return on Investment in Sukuks
TAX ON NON-RESIDENTS
Sec 152, Division IV, Part I, 1st Schedule
Table: Tax on Goods, Services & Contracts
TAX RATES ON EXPORTS & EXPORT OF SERVICES
Sec. 154 & 154A, Division IV, Part III, 1st Schedule
Table: Tax Rates on Exports & Export of Services
TAX ON RENT OF IMMOVABLE PROPERTY
Sec. 155, Division V, Part III, 1st Schedule
Table: Tax on Rent of Immovable Property | The rate of tax to be deducted u/Sec. 155, in case of company shall be 15% of the gross amount of rent.
TAX ON PRIZES & WINNINGS
Sec. 156, Division VI, Part III, 1st Schedule
Table: Tax on Prizes & Winnings
TAX ON PETROLEUM PRODUCTS
Sec. 156A, Division VIA, Part III, 1st Schedule
Table: Tax on Petroleum Products
ADVANCE TAX ON PURCHASE, REGISTRATION AND TRANSFER OF MOTOR VEHICLES
Sec. 231B & 234, Division VII, Part IV, 1st Schedule
Table: Tax on Telephone and Internet
ADVANCE TAX AT THE TIME OF SALE BY AUCTION
Sec. 236A, Division VIII, Part IV, 1st Schedule
Table: Advance Tax on Purchase, Registration & Transfer
TAX ON BROKERAGE AND COMMISSION
Sec. 233, Division II, Part IV, 1st Schedule
Table: Tax on Brokerage and Commission
TAX ON ELECTRICITY CONSUMPTION
Sec. 235, Division IV, Part IV, 1st Schedule
Table: Tax on Electricity Consumption
TAX ON TELEPHONE AND INTERNET
Sec. 236, Division IV, Part IV, 1st Schedule
Table: Advance Tax at the time of sale by auction
ADVANCE TAX ON SALE & PURCHASE OF IMMOVABLE PROPERTY
Sec. 236C & 236K, Division X & XVIII, Part IV, 1st Schedule
Table: Advance Tax on Sale & Purchase of Immovable Property
ADVANCE TAX ON DISTRIBUTORS, DEALERS OR WHOLESALERS
Sec. 236G, Division XIV, Part IV, 1st Schedule
Table: Advance Tax on Distributors, Dealers or Wholesalers
ADVANCE TAX ON SALE TO RETAILERS
Sec. 236H, Division XV, Part IV, 1st Schedule
Table: Advance Tax on Sale to Retailers
COLLECTION OF ADVANCE TAX BY EDUCATIONAL INSTITUTIONS
Sec. 236I, Division XVI, Part IV, 1st Schedule
Table: Collection of Advance Tax by Educational Institutions
PAYMENT TO A RESIDENT PERSON FOR RIGHT TO USE MACHINERY & EQUIPMENT
Sec. 236Q, Division XXIII, Part IV, 1st Schedule
Table: Tax for Profit on Debt | As per 10th Schedule, Tax Rate shall be increased by 100% in case the person is not appearing in Active Taxpayers' List.
Profit on Debt exceeding Rs.36 million shall be subject to tax under normal law.
TAX ON SHIPPING OR AIR TRANSPORT INCOME OF A NON-RESIDENT PERSON
Table: Tax on Shipping or Air Transport Income
TAX ON RETURN ON INVESTMENT IN SUKUKS
Sec. 5AA, Division IB, Part III, 1st Schedule
Table: Payment to Resident Person in using Machinery & Equipment
TAX FOR PROFIT ON DEBT - OTHER THAN A COMPANY
Sec. 7B, Division III A, Part I, 1st Schedule
Table: Tax on Return on Investment | As per 10th Schedule, Tax Rate shall be increased by 100% in case the person is not appearing in Active Taxpayers' List
TAX ON CERTAIN PAYMENTS TO NON-RESIDENTS
Table: Tax on Certain Payments to Non-Residents | As per 10th Schedule, Tax Rate shall be increased by 100% in case the person is not appearing in Active Taxpayers' List
TAX ON INCOME FROM PROPERTY FOR INDIVIDUALS AND ASSOCIATION OF PERSONS
Sec. 15, Division V, Part I, 1st Schedule
Table: Tax on Income from Property
CAPITAL GAINS ON DISPOSAL OF SECURITIES
Sec. 37A, Division VII, Part I, 1st Schedule
Table: Capital Gains on Disposal of Securities | The rate of tax on cash settled derivatives traded on the stock exchange shall be 5% for the tax years 2018 to 2020.
A Mutual Fund or a Collective Investment Scheme or a REIT Scheme shall deduct Capital Gains Tax at the rates as specified below on Redemption of Securities, as specified below:
Provided further that in case of a stock fund if dividend receipts of the fund are less than capital gains, then the rate of tax deduction shall be 12.5%. No capital gains tax shall be deducted, if the holding period of the security is more than 4 years.
CAPITAL GAINS ON DISPOSAL OF IMMOVABLE PROPERTY (CAPITAL ASSETS)
Sec. 37(1A), Division VIII, Part I, 1st Schedule
Table: Capital Gains on Disposal of Immovable Property
CAPITAL GAINS ON DISPOSAL OF IMMOVABLE PROPERTY
Sec. 37(3A)
Table: Capital Gains on Disposal of Immovable Property
TAX ON BUILDERS
Sec. 7C, Division VIII A, Part I, 1st Schedule
Table: Capital Gains on Disposal of Immovable Property
TAX ON BUILDERS
Sec. 7C, Division VIII A, Part I, 1st Schedule
Table: Tax on Builders
TAX ON DEVELOPERS
Sec. 7D, Division VIII B, Part I, 1st Schedule
Table: Tax on Developers
MINIMUM TAX
Sec. 113, Division IX, Part I, 1st Schedule
Table: Minimum Tax
REDUCTION IN TAX LIABILITY FOR FULL TIME TEACHER
Clause (2), Part III of 2nd Schedule
Table: Payment of Advance Tax
ADVANCE TAX
Table: Reduction in Tax Liability for Full Time Teacher
PAYMENT OF ADVANCE TAX
Sec. 147
Table: Advance Tax
ADVANCE TAX ON DIVIDEND
Table: Advance Tax on Dividend
COLLECTION OF TAX BY A REGISTERED STOCK EXCHANGE IN PAKISTAN
Table: Collection of Tax by a Stock Exchange in Pakistan
COLLECTION OF TAX ON PASSENGER TRANSPORT VEHICLES
Table: Collection of Tax on Passenger Transport Vehicles
COLLECTION OF TAX ON TELEPHONE USERS
Table: Collection of Tax on Telephone Users
TAX ON CASH WITHDRAWAL FROM A BANK
Table: Tax on Cash Withdrawal from a Bank
ADVANCE TAX ON TRANSACTIONS IN BANK [TRANSFEROR]
Table: Advance Tax on Transactions in Bank
ADVANCE TAX ON BANKING TRANSACTIONS OTHERWISE THAN THROUGH CASH [RECEIVER]
Table: Advance Tax on Banking Transactions Otherwise Than Through Cash
TAX ON CABLE TELEVISION OPERATOR
Table: Tax on Cable Television Operator
ADVANCE TAX ON SALE TO DISTRIBUTORS, DEALERS OR WHOLESALERS
Table: Advance Tax on Sale to Distributors, Dealers or Wholesalers
ADVANCE TAX ON DEALERS, COMMISSION AGENTS AND ARHATIS, ETC.
Table: Advance Tax on Dealers, Commission Agents and Arhatis, etc.
ADVANCE TAX ON PURCHASE OF IMMOVABLE PROPERTY
Table: Advance Tax on Purchase of Immovable Property | The rate of tax to be collected under Sec. 236K shall be 1% of the fair market value.
ADVANCE TAX ON SALE OR TRANSFER OF IMMOVABLE PROPERTY
Table: Advance Tax on Sale or Transfer of Immovable Property
ADVANCE TAX ON INTERNATIONAL AIR TICKET
Table: Advance Tax on International Air Ticket
ADVANCE TAX ON FUNCTIONS AND GATHERINGS
Table: Advance Tax on Functions and Gatherings
ADVANCE TAX ON INSURANCE PREMIUM
