A comprehensive overview of the withholding tax rates for the tax year 2026 that apply to individual, association of person and company. Tax has been deducted at source by a person or authority duly prescribed under the law.
These deductions are made in accordance with the rates officially approved by the relevant tax regulations or governing authorities. These rates are set by the appropriate legislative or regulatory bodies to ensure consistency and compliance with the law. As such, any amount withheld is determined based on the applicable legal framework, ensuring transparency and adherence to established tax policies.
This section pertains specifically to salaries under Section 149 of the Income Tax Ordinance, 2001. It applies exclusively to individuals receiving income from employment and other benefits employer.
With reference to Section 149 of the Income Tax Ordinance, 2001, the applicable tax rates are prescribed in Division I, Part I of the First Schedule of the Ordinance.
SALARY SECTION 149 APPLICABLE TAX RATES
SR
SLABS
FROM
TO
RATE
RUPEES
REGIM
1
Where the taxable income does not exceed Rs. 600,000
Upto Rs. 600,000
0% Upto Rs. 600,000
N/A
Adj.
2
Where taxable income exceeds Rs. 600,000 but does not exceed Rs. 1,200,000
Rs. 600,001
Rs. 1,200,000
1% of amount exceeding Rs. 600,000
Rs. 6,000
Adj.
3
Where taxable income exceeds Rs. 1,200,000 but does not exceed Rs. 2,200,000
Rs. 1,200,001
Rs. 2,200,000
Rs. 6,000 plus 11% of the amount exceeding Rs. 1,200,000
Rs. 116,000
Adj.
4
Where taxable income exceeds Rs. 2,200,000 but does not exceed Rs. 3,200,000
Rs. 2,200,001
Rs. 3,200,000
Rs. 116,000 plus 23% of the amount exceeding Rs. 2,200,000
Rs. 346,000
Adj.
5
Where taxable income exceeds Rs. 3,200,000 but does not exceed Rs. 4,100,000
Rs. 3,200,001
Rs. 4,100,000
Rs. 346,000 plus 30% of the amount exceeding Rs. 3,200,000
Rs. 616,000
Adj.
6
Where taxable income exceeds Rs. 4,100,000
Rs. 4,100,001 and above
Rs. 616,000 plus 35% of the amount exceeding Rs. 4,100,000
Rs. 616,000 Plus 35%
Adj.
SECTION 4AB - SURCHARGE APPLICABLE TAX RATES
SR
SLABS
FROM
TO
RATE
RUPEES
REGIM
1
Where taxable income exceeds Rs. 10 million
Rs. 10,000,000 and above
Surcharge at the rate of 9% of tax liability arising on salary
As to be Calculated
Adj.
RELEVANT PROVISION AND SECTION
As per Sub-Section (2) of Division I, Part I of the Second Schedule to the Income Tax Ordinance, 2001, where an individual’s income chargeable under the head “Salary” exceeds 75% of their taxable income, the tax rates applicable to individuals and associations of persons (AOPs) shall be applied accordingly.
As per the relevant provisions of the Income Tax Ordinance, the tax payable by a full-time teacher or researcher employed in a non-profit educational or research institution, duly recognized by the Higher Education Commission (HEC), a Board of Education, or a university recognized by the HEC, including government research institutions, shall be reduced by 25% of the tax payable on their income under the head "Salary."
This section specifically pertains to the directorship fee or fee for attending meetings, as outlined under Sub-Section (3) of Section 149 of the Income Tax Ordinance, 2001. It applies exclusively to individuals receiving remuneration for attending Board of Directors (BOD) meetings.
As per Sub-Section (3) of Section 149 of the Income Tax Ordinance, 2001, the applicable tax rates on are specifically prescribed within this same section of the Ordinance.
BoD MEETINGS SECTION 149(3) APPLICABLE TAX RATES
SR
PARTICULARS
AMOUNT
RATE
REGIM
1
Where any amount is paid to a director for attending a meeting
Any amount
20% on Gross amount to Director
Adj.
This section specifically pertains to pensions, annuities, and similar sources, as outlined under Sub-Section (1A) of Section 149 of the Income Tax Ordinance, 2001. It applies exclusively to employee below the age of 70 years receiving such income from a former employer.
With reference to Section 149 of the Income Tax Ordinance, 2001, the applicable tax rates are prescribed in Division I, Part I of the First Schedule of the Ordinance.
PENSIONS, ANNUITIES & SIMILAR SOURCES SECTION 149(1A) APPLICABLE TAX RATES
SR
PARTICULARS
FROM
TO
RATE
RUPEES
REGIM
1
Where any amount of pensions, annuities, or similar sources is paid by a former employer to an individual below the age of 70
Upto Rs. 10,000,000
0% Upto Rs. 10M
N/A
N/A
2
Rs. 10,000,000 or above
5% of amount exceeding Rs. 10M
As to be Calculated
FTR
This section specifically relates to dividend as outlined under Section 150 of the Income Tax Ordinance, 2001. It is applicable solely to individuals, associations of persons, and companies that receive dividends from companies or investment entities.
With reference to Section 150 of the Income Tax Ordinance, 2001, the applicable tax rates are prescribed in Division III, Part I of the First Schedule of the Ordinance.
DIVIDENDS SECTION 150 APPLICABLE TAX RATES
SR
PARTICULARS
IND, AOP, CO
REGIME
FBR CODE
FILER
NON FILER
1
Independent Power Producers where such dividend tax is a pass- through item under an Implementation Agreement or Power Purchase Agreement or Energy Purchase Agreement and is required to be reimbursed by Central Power Purchasing Agency (CPPA-G) or its predecessor or successor entity
7.5%
15%
FTR
64030052
2
Company where no tax is payable due to exemption of income or carry forward business losses or claim of tax credit
25%
50%
FTR
64030081
3
Cash Dividend
15%
30%
FTR
64030055
4
Specie Dividend (Shares of Group Company)
15%
30%
FTR
64030055
5
In case of Mutual Funds, where proportional income derived from average annual investments in Debt Securities where recipient is Corporate entity
29%
58%
FTR
64030055
6
In case of Mutual Funds, where proportional income derived from average annual investments in Debt Securities where recipient is other than Corporate entity
25%
50%
FTR
64030055
7
In case of Mutual Funds, where proportional income derived from average annual investments in Equities
15%
30%
FTR
64030055
8
In case of Dividend received by a REIT scheme from Special Purpose Vehicle (SPV)
0%
N/A
N/A
9
In case of dividend received by others from Special Purpose Vehicle (SPV) as defined under the Real Estate Investment Trust Regulations, 2015
35%
70%
FTR
10
Any other case
15%
30%
FTR
64030055
RELEVANT PROVISION AND SECTION
Under Section 150 of the Income Tax Ordinance, 2001, any person distributing dividends is required to deduct tax from the gross amount of the dividend paid, or collect tax on dividends paid in specie, at the rate specified in the Ordinance.
This section specifically relates to profit on debt as outlined under Section 151 of the Income Tax Ordinance, 2001. It is applicable solely to individuals, associations of persons, and companies that receive profit from different sources.
With reference to Section 151 of the Income Tax Ordinance, 2001, the applicable tax rates are prescribed in Division IIIA, Part I of the First Schedule of the Ordinance.
PROFIT ON DEBT SECTION 151 APPLICABLE TAX RATES
SR
SEC
PARTICULARS
CATEGORY
REGIME
FBR CODE
TYPE OF TAX PAYER
FILER
NON FILER
IND
AOP
CO.
1
151(1)(a)
Yield on an account, deposit or a certificate under the National Savings Scheme (NSC) or Post office saving account
15%
30%
*FTR
ADJ.
64040001
2
151(1)(b)
Yield or profit on a debt, being on an account or deposit maintained with a banking company or a financial institution
20%
40%
*FTR
ADJ.
64040002
3
151(1)( c)
Yield or profit on any security issued by Federal Government, a Provincial Government or a local Government other than profit on National Saving Scheme or Post Office Saving account to any person
20%
40%
*FTR
ADJ.
64040003
4
153(1)(d)
Profit on any bond, certificate, debenture, security or instrument of any kind (excluding loan agreement between a borrower and a banking company or a development finance institution) issued by a banking company, a financial institution, company or a finance society, to any person other than a financial institution
15%
30%
*FTR
ADJ.
64040004
5
In all cases, other than mentioned above
15%
30%
*FTR
ADJ.
-
Note: For individuals and association of persons, if the profit on debt exceeds Rs. 5 million, the tax deducted under this section shall be treated as minimum tax (MTR).
MTR
RELEVANT PROVISION AND SECTION
Under Section 151(3) of the Income Tax Ordinance, 2001, the tax deducted on profit on debt shall be treated as minimum tax for the taxpayer, except in the following cases:
(a) Taxpayer is a company; or (b) Profit on debt is taxable under section 7B.
This section specifically relates to profit on debt as outlined under Section 151(1A) of the Income Tax Ordinance, 2001. It is applicable solely to individuals, associations of persons, and companies that receive interest on investment in sukuks.
With reference to Section 151 of the Income Tax Ordinance, 2001, the applicable tax rates are prescribed in Division IB, Part III of the First Schedule of the Ordinance.
RETURN ON INVESTMENT SECTION 151 (1A) APPLICABLE TAX RATES
SR
PARTICULARS
TYPE OF TAX PAYER
FBR CODE
COMPANY
FILER
NON FILER
REGIME
1
Return on investment in sukuk, (excluding “The Second Pakistan Sukuk Company” and “The Third Pakistan Sukuk Company”).
25%
50%
FTR
64030081
INDIVIDUAL / AOP
FBR CODE
FILER
NON FILER
REGIME
2
Return on investment in sukuk, (excluding “The Second Pakistan Sukuk Company” and “The Third Pakistan Sukuk Company”).
(a) Where the return is less than Rs. 1 million; or
10%
20%
FTR
64030083
(b) Where the return is more than Rs. 1 million
12.5%
25%
FTR
64030082
This section deals specifically with payments for goods under Section 151(1)(a) of the Income Tax Ordinance, 2001. It applies only to individuals, associations of persons, and companies receiving payments from customers for goods supplied at the time of payment.
With reference to Section 151(1)(a) of the Income Tax Ordinance, 2001, the applicable tax rates are prescribed in Division III, Part III of the First Schedule of the Ordinance.
PAYMENT FOR GOODS SECTION 151 (1) (a) APPLICABLE TAX RATES
SR
PARTICULARS
TYPE OF TAX PAYER
FBR CODE
INDIVIDUAL / AOP / CO
FILER
NON FILER
REGIME
1
Sales of rice, cotton seed oil or edible oil
1.5%
3%
MTR
64060003
2
Distribution of Cigarettes
2.5%
5%
MTR
64060002
3
Distribution of Pharmaceutical Products
1%
2%
MTR
64060002
4
Distributors, dealers, sub-dealers, wholesalers and retailers of ; if they are appearing in active taxpayers list of income tax and sales tax
Note: For Companies, if the company is listed company or manufacture, the tax deducted under this section shall be treated as adjustable tax (ADJ).
ADJ.
SR
PARTICULARS
FILER
NON FILER
REGIME
FBR CODE
6
Sale of any other goods in the case of:
(a) Company (excluding toll manufacturing); or
5%
10%
MTR
64060060
(b) Company toll manufacturing; or
9%
18%
MTR
64060068
(d) Other taxpayers toll manufacturing
11%
22%
MTR
64060084
(d) Other taxpayers (excluding toll manufacturing)
5.5%
11%
MTR
64060083
Note: For Companies, if the company is listed company or manufacture, the tax deducted under this section shall be treated as adjustable tax (ADJ).
ADJ.
RELEVANT PROVISION AND SECTION
Under Section 153(1)(a) of the Income Tax Ordinance, 2001, every prescribed person making a payment in full or part including a payment by way of advance to a resident person making the payment, deduct tax from the gross amount payable (including sales tax, if any) at the rate specified in ordinance
(a) for the sale of goods including toll manufacturing except where payment is less than seventy-five thousand Rupees in aggregate, during a financial year
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