What do you understand by income tax rates?

ZAFAR & ASSOCIATES - LLP | Income Tax Rates - Pakistan

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 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:

Serial No	Payment / Transaction	Withholding Tax Rates
		Part I of 12th Schedule		Part II of 12th Schedule		Part III of 12th Schedule
		Filer	Non-Filer	Filer	Non-Filer	Filer	Non-Filer
01	Imports (Minimum Tax except manufacture and listed companies)	1%	2%	2%	4%	5.50%	11%
02	Commercial Imports (Importing goods)			3.5%	7%
03	Manufacturers Covered Under SRO 1125(I)/2011					1%	2%
04	Pharmaceutical Imported Finish Goods					4%	8%
05	Importers of CKD Kits of Electric Vehicles for Small Cars (SUVs with 50 kwh battery and LCVs with 150 kwh battery)					1%	2%

Table: Withholding Tax Rates on Imports

Withholding Tax on Import of Mobile Phones

Sec. 148

Serial No	C&F Value of Mobile Phone (US$)	Tax in Rupees
Serial No	C&F Value of Mobile Phone (US$)	Filer	Non-Filer
In CBU condition under PCT Heading 8517.1219
01	Up to 30 except smart phones	70	140
02	Exceeding 30 and up to 100 and smart phones up to 100	100	200
03	Exceeding 100 and up to 200	930	1,860
04	Exceeding 200 and up to 350	970	1,940
05	Exceeding 350 and up to 500	5,000	10,000
06	Exceeding 500	11,500	23,000
In CSK / SKD condition under PCT Heading 8517.1211
07	Exceeding 350 and up to 500	3,000	6,000
08	Exceeding 500	5,200	10,400

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:

Serial No	Taxable Income	Rate of Tax
01	Where taxable income does not exceed Rs.600,000	0%
02	Where taxable income exceeds Rs.600,000 but does not exceed Rs.1,200,000	2.5% of the amount exceeding Rs.600,000
03	Where taxable income exceeds Rs.1,200,000 but does not exceed Rs.2,400,000	Rs.15,000 plus 12.5% of the amount exceeding Rs.1,200,000
04	Where taxable income exceeds Rs.2,400,000 but does not exceed Rs.3,600,000	Rs.165,000 plus 20% of the amount exceeding Rs.2,400,000
05	Where taxable income exceeds Rs.3,600,000 but does not exceed Rs.6,000,000	Rs.405,000 plus 25% of the amount exceeding Rs.3,600,000
06	Where taxable income exceeds Rs. 6,000,000 but does not exceed Rs.12,000,000	Rs.1,005,000 plus 32.5% of the amount exceeding Rs.6,000,000
07	Where taxable income exceeds Rs. 12,000,000	Rs.2,955,000 plus 35% of the amount exceeding Rs.12,000,000

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:

Serial No	Taxable Income	Rate of Tax
01	Where taxable income does not exceed Rs.600,000	0%
02	Where taxable income exceeds Rs.600,000 but does not exceed Rs.800,000	5% of the amount exceeding Rs.600,000
03	Where taxable income exceeds Rs.800,000 but does not exceed Rs.1,200,000	Rs.10,000 plus 12.5% of the amount exceeding Rs.800,000
04	Where taxable income exceeds Rs.1,200,000 but does not exceed Rs.2,400,000	Rs.60,000 plus 17.5% of the amount exceeding Rs.1,200,000
05	Where taxable income exceeds Rs.2,400,000 but does not exceed Rs.3,000,000	Rs.270,000 plus 22.5% of the amount exceeding Rs.2,400,000
06	Where taxable income exceeds Rs.3,000,000 but does not exceed Rs.4,000,000	Rs.405,000 plus 27.5% of the amount exceeding Rs.3,000,000
07	Where taxable income exceeds Rs.4,000,000 but does not exceed Rs.6,000,000	Rs.680,000 plus 32.5% of the amount exceeding Rs.4,000,000
08	Where taxable income exceeds Rs.6,000,000	Rs.1,330,000 plus 35% of the amount exceeding Rs.6,000,000

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:

Serial No	Type	Rate of Tax
01	Banking Companies	39%
02	Public / Private Companies	29%
03	Small Companies	20%
04	Alternate Corporate Tax (ACT) u/Sec. 113C	17% of accounting profit
05	Modaraba	25%

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)

Serial No	Description	Rate of Tax
01	Up to Rs.150 million	0%
02	Exceeding Rs.150 million to Rs.200 million	1%
03	Exceeding Rs.200 million to Rs.250 million	2%
04	Exceeding Rs.250 million to Rs.300 million	3%
05	Above Rs.300 million	4%
06	For Banking Company Tax Year 2022	4%
07	For Banking Company Tax Year 2023 and onwards where income exceeds Rs.300 million.	10% of the income
08	For Airlines, Automobiles, Beverages, Cement, Chemicals, Cigarette & Tobacco, Fertilizers, Iron & Steel, LNG Terminals, Oil Marketing, Oil Refining, Petroleum & Gas Exploration and Production, Pharmaceuticals, Sugar and Textiles.	10% of the income where income exceeds Rs.300 million.

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.

Serial No	Description	Filer	Non-Filer
01	Dividend paid by Independent Power Producers where such dividend 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%
02	In case of a person receiving dividend from a Company where no tax is payable by such Company, due to exemption of income or carry-forward of business losses under Part VIII of Chapter III or claim of tax credits under Part X of Chapter III.	25%	50%
03	Dividend received by a REIT scheme from Special Purpose Vehicle	0%	-
04	Dividend received by others from Special Purpose Vehicle as defined under the Real Estate Investment Trust Regulations, 2015.	35%	-
05	In mutual fund, Real Estate Investment Trusts and cases other than mentioned above.	15%	30%
06	Dividends declared by a Company as are "attributable" to profits and gains derived from a bagasse and biomass-based co-generation power project qualifying for exemption under clause (132C) of Part-I of 2nd Schedule.	7.5% [Cl. 18C]	-

Table: Dividend Tax

Tax on Profit on Debt & Return on Investment in Sukuks

Sec. 151, Division 1A & 1B, Part III, 1st Schedule

Serial No	Description	Companies / Individual / AOP
Serial No	Description	Filer	Non-Filer
Interest on Profit on Debt [Sec. 151]
01	Interest	15%	30%
02	National Saving Scheme (NSS)
03	Bank Account
04	Federal, Provincial & Local Government Bonds
05	Company Loans
06	Profit on debt from instrument, whether conventional or sharia compliant, issued by Federal Govt under Public Debt Act, 1944 and purchased by resident citizen of Pakistan who has declared all his foreign assets to the Board through a Foreign Currency Value Account (FCVA) maintained with authorized banks in Pakistan under the foreign exchange regulation issued by the State Bank of Pakistan.	10% [Clause 5AB of Part II of 2nd Schedule]	-
07	Profit on debt paid, covered under clauses (78) and (79) of Part I of the 2nd Schedule	0% [Clause 5AC of Part II of 2nd Schedule]	-
Interest on Investment in Sukuks from a Sukuk Holder [Sec. 151(1A)]
01	Sukuk Holder as a Company	25%	50%
02	Sukuk Holder as an Individual or an Association of Persons, if the Return on Investment is more than one million	12.50%	25%
03	Sukuk Holder as an Individual or an Association of Persons, if the Return on Investment is less than one million	10%	20%

Table: Tax on Profit on Debt & Return on Investment in Sukuks

Tax on Non-Residents

Sec 152, Division IV, Part I, 1st Schedule

Serial No	Description	Companies / Individual / AOP
Serial No	Description	Filer		Non-Filer
01	Royalty or Fee for Technical Services	15%		30%
02	Construction Services	7%		7%
03	Advertisement by TV Satellite Channels	7%		7%
04	Media Person Advertisement Services	10%		10%
05	Fee for Offshore Digital Services	10%		10%
06	Any Other Services	20%		40%
		Companies		Individual / AOP
		Filer	Non-Filer	Filer	Non-Filer
07	Supply of Goods	4%	4%	4.50%	4.50%
08	Services	8%	16%	10%	20%
09	Contract	7%	14%	7%	14%
		Filer		Non-Filer
10	Sportsman	10%		20%
11	Foreign Produced Commercial	20%		40%
		Companies		Individual / AOP
		Filer	Non-Filer	Filer	Non-Filer
12	Transport Services	3%	6%	3%	6%
13	Freight Forwarding Services
14	Air Cargo Services
15	Courier Services
16	Manpower Outsourcing Services
17	Hotel Services
18	Security Guard Services
19	Software Development Services
20	IT Services & IT Enabled Services
21	Tracking Services
22	Advertising Services (Other than Print / Electronic Media)
23	Share Registrar Services
24	Engineering Services
25	Car Rental Services
26	Building Maintenance Services
27	Services rendered by Pakistan Stock Exchange Limited and Pakistan Mercantile Exchange Limited
28	Inspection
29	Certification
30	Testing
31	Training Services

Table: Tax on Non-Residents

Tax on Goods, Services & Contracts

Sec. 153, Division III A, Part III, 1st Schedule

Serial No	Description	Companies		Individual / AOP
Serial No	Description	Filer	Non-Filer	Filer	Non-Filer
01	Rice, Cotton Seed Oil, Edible Oils (If Annual Supplies > 75K)	1.5%	3%	1.5%	3%
02	Other Goods including Toll Manufacturing (If Annual Supplies > 75K)	4%	8%	4.5%	9%
03	Distributor, Wholesaler, Retailer, Dealer and Sub-Dealer of FMCG, Fertilizer, electronics excluding mobile phones, sugar, Cement and Edible Oil	0.25%	8%	0.25%	9%
04	Traders of Yarn	0.5%	1%	0.5%	1%
05	Services (If Annual Services > 30K)	8%	16%	10%	20%
06	Transport Services	3%	6%	3%	6%
07	Freight Forwarding Services
08	Air Cargo Services
09	Courier Services
10	Manpower Outsourcing Services
11	Hotel Services
12	Security Guard Services
13	Software Development Services
14	IT Services & IT Enabled Services
15	Tracking Services
16	Advertising Services (Other than Print / Electronic Media)
17	Share Registrar Services
18	Engineering Services
19	Warehousing Services
20	Services rendered by Asset Management Companies
21	Data Services Licensed by PTA
22	Telecommunication Infrastructure (Tower) Services
23	Car Rental Services
24	Building Maintenance Services
25	Services Rendered by Pakistan Stock Exchange Limited & Pakistan Mercantile Exchange Limited
26	Inspection
27	Certification
28	Testing
29	Training Services
30	Oilfield Service
31	Telecommunication Services
32	Collateral Management Services
33	Travel & Tour Services
34	Electronic & Print Media Advertising Services	1.5%	3%	1.5%	3%
35	Contracts (If Annual Contract > 10K)	7%	14%	7.5%	15%
		Filer		Non-Filer
36	Sportsman	10%		20%
		Companies / Individual / AOP
		Filer		Non-Filer
37	Stitching, Dying, Printing & Embroidery etc.	1%		2%

Table: Tax on Goods, Services & Contracts

Tax Rates on Exports & Export of Services

Sec. 154 & 154A, Division IV, Part III, 1st Schedule

Serial No	Description	Company / AOP / Individual
Serial No	Description	Filer / Non-Filer
01	Exports	1%
02	Export of Goods	1%
03	Export Commission	5%
04	Inland Bank to Bank Letter of Credit	1%
05	Export Processing Zone	1%
06	Indirect Exporter; SPO	1%
07	Clearing of Goods	1%
08	Export of Services	1%

Table: Tax Rates on Exports & Export of Services

Tax on Rent of Immovable Property

Sec. 155, Division V, Part III, 1st Schedule

Serial No	Gross Amount of Rent	Rate of Tax
01	Where the gross amount of rent does not exceed Rs.300,000	Nil
02	Where the gross amount of rent exceeds Rs.300,000 but does not exceed Rs.600,000	5% of the gross amount exceeding Rs.300,000
03	Where the gross amount of rent exceeds Rs.600,000 but does not exceed Rs.2,000,000	Rs.15,000 plus 10% of the gross amount exceeding Rs.600,000
04	Where the gross amount of rent exceeds Rs.2,000,000	Rs.155,000 plus 25% of the gross amount exceeding Rs.2,000,000

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

Serial No	Description	Companies / Individual / AOP
Serial No	Description	Filer	Non-Filer
01	Prize Bonds	15%	30%
02	Prizes, Winning, Lottery and Raffles	20%	40%

Table: Tax on Prizes & Winnings

Tax on Petroleum Products

Sec. 156A, Division VIA, Part III, 1st Schedule

Serial No	Description	Companies / Individual / AOP
		Filer	Non-Filer
01	Petrol & Petroleum Products	12%	24%

Table: Tax on Petroleum Products

Advance Tax on Purchase, Registration and Transfer of Motor Vehicles

Sec. 231B & 234, Division VII, Part IV, 1st Schedule

Serial No	Description	Engine Capacity	Filer	Non-Filer
01	At the time of Leasing of Motor Vehicle	Any Motor Vehicle	-	4%
02	On Registration by Excise & Taxation Dept. and On Sale by Manufacturer (Car or Jeep)	Up to 850cc	7,500	15,000
		851cc to 1000cc	15,000	30,000
		1001cc to 1300cc	25,000	50,000
		1301cc to 1600cc	50,000	100,000
		1601cc to 1800cc	75,000	150,000
		1801cc to 2000cc	100,000	200,000
		2000cc to 2500cc	150,000	300,000
		2500cc to 3000cc	200,000	400,000
		Above 3000cc	250,000	500,000
03	Transfer of Ownership (Tax rate shall be reduced by 10% each year from the date of 1st Registration)	Up to 850cc	-	-
		851cc to 1000cc	5,000	10,000
		1001cc to 1300cc	7,500	15,000
		1301cc to 1600cc	12,500	25,000
		1601cc to 1800cc	18,750	37,500
		1801cc to 2000cc	25,000	50,000
		2000cc 2500cc	37,500	75,000
		2500cc to 3000cc	50,000	100,000
		Above 3000cc	62,500	125,000
04	Sold Locally Manufactured Motor Vehicles	Up to 1000cc	50,000	100,000
		1001cc to 2000cc	100,000	200,000
		2001cc and above	200,000	400,000
05	Private Motor Vehicles	Up to 1000cc	800	1,600
		1001cc to 1199cc	1,500	3,000
		1200cc to 1299cc	1,750	3,500
		1300cc to 1499cc	2,500	5,000
		1500cc to 1599cc	3,750	7,500
		1600cc to 1999cc	4,500	9,000
		2000cc and above	10,000	20,000

Table: Advance Tax on Purchase, Registration & Transfer

Tax on Brokerage and Commission

Sec. 233, Division II, Part IV, 1st Schedule

Serial No	Description	Companies / Individual / AOP
Serial No	Description	Filer	Non-Filer
01	Advertising agents	10%	20%
02	Life insurance agents where commission received is less than Rs.0.5 million per annum	8%	16%
03	Persons not covered in 1 and 2 above	12%	24%

Table: Tax on Brokerage and Commission

Tax on Electricity Consumption

Sec. 235, Division IV, Part IV, 1st Schedule

Serial No	Gross Amount	Assessee	Companies / Individual / AOP
			Filer	Non-Filer
1	Up to Rs.500	Commercial	Rs. 0
		Industrial	Rs. 0	Rs. 0
2	Exceeds Rs.500 but does not exceed Rs.20,000	Commercial	10%
		Industrial	10%	20%
3	Exceeds Rs.20,000	Commercial	Rs.1,950 plus 12%
		Industrial	Rs.1,950 plus 5%	Rs.1,950 plus 10%
4	Less than Rs.25,000	Domestic Electricity Consumption	-	-
5	Exceeds Rs.25,000		-	7.5%

Table: Tax on Electricity Consumption

Tax on Telephone and Internet

Sec. 236, Division IV, Part IV, 1st Schedule

Serial No	Description	Companies / Individual / AOP
01	In case of telephone subscriber (other than the mobile phone subscriber) where the amount of monthly bill exceeds Rs.1,000	10% of the exceeding amount of bill
02	In the case of subscriber of internet, mobile telephone and pre-paid internet or telephone card	10% for tax year 2022 and 8% onwards of the amount of bill or sales price of internet pre-paid card or prepaid telephone card or sale of units through any electronic medium or whatever form.

Table: Tax on Telephone and Internet

Advance Tax at the time of sale by auction

Sec. 236A, Division VIII, Part IV, 1st Schedule

Serial No	Description	Companies / Individual / AOP
Serial No	Description	Filer	Non-Filer
01	Gross sale price of any property or goods sold by auction	10%	20%
02	Immovable property sold by auction	5%	10%

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

Serial No	Description	Companies / Individual / AOP
Serial No	Description	Filer	Non-Filer
01	On Sale of Property	1%	2%
02	On Purchase of Property and person responsible for collecting payments in instalment as per Fair Market Value	1%	2%

Table: Advance Tax on Sale & Purchase of Immovable Property

Advance Tax on Distributors, Dealers or Wholesalers

Sec. 236G, Division XIV, Part IV, 1st Schedule

Serial No	Category of Sale	Companies / Individual / AOP
Serial No	Category of Sale	Filer	Non-Filer
01	Fertilizers	0.25%	0.7%
02	Other than fertilizers	0.1%	0.2%

Table: Advance Tax on Distributors, Dealers or Wholesalers

Advance Tax on Sale to Retailers

Sec. 236H, Division XV, Part IV, 1st Schedule

Serial No	Gross amount of Sale	Companies / Individual / AOP
		Filer	Non-Filer
01	Sale to Retailers	0.5%	1%

Table: Advance Tax on Sale to Retailers

Collection of Advance Tax by Educational Institutions

Sec. 236I, Division XVI, Part IV, 1st Schedule

Serial No	Gross amount of Fee	Companies / Individual / AOP
		Filer	Non-Filer
01	Education Expenses	-	5%

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

Serial No	Description	Companies / Individual / AOP
01	Rent of Collection of Tax	10%

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

Serial No	Profit on Debt	Rate of Tax
01	Where profit on debt does not exceed Rs.5,000,000	15%
02	Where profit on debt exceeds Rs.5,000,000 but does not exceed Rs.25,000,000	17.5% of the amount exceeding Rs.5,000,000
03	Where profit on debt exceeds Rs.25,000,000 but does not exceed Rs.36,000,000	20% of the amount exceeding Rs.25,000,000

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

Serial No	Description	Rate of Tax
01	In the case of shipping income	8% of the gross amount received or receivable
02	In the case of air transport income	3% of the gross amount received or receivable

Table: Tax on Shipping or Air Transport Income

Tax on Return on Investment in Sukuks

Sec. 5AA, Division IB, Part III, 1st Schedule

Serial No	Sukuk-holder	Rate of Tax
01	Company	25%
02	Individual & AOP, if the return on investment is more than Rs.1,000,000	12.5%
03	Individual & AOP, if the return on investment is less than Rs.1,000,000	10%

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

Serial No	Category	Rate of Tax
01	Royalty (Sec. 6)	15% of the gross amount
02	Fee for Technical Services (Sec. 6)	15% of the gross amount
03	Offshore digital services (Sec. 6)	5% of the gross amount
04	Shipping income (Sec. 7)	8% of the gross amount received or receivables
05	Air transport income (Sec. 7)	3% of the gross amount received or receivables

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

Serial No	Gross Amount of Rent	Rate of Tax
01	Where the gross amount of rent does not exceed Rs.200,000	Nil
02	Where the gross amount of rent exceeds Rs.200,000 but does not exceed Rs.600,000	5% of the gross amount exceeding Rs.200,000
03	Where the gross amount of rent exceeds Rs.600,000 but does not exceed Rs.1,000,000	Rs.20,000 + 10% of the gross amount exceeding Rs.600,000
04	Where the gross amount of rent exceeds Rs.1,000,000 but does not exceed Rs.2,000,000	Rs.60,000 + 15% of the gross amount exceeding Rs.1,000,000
05	Where the gross amount of rent exceeds Rs.2,000,000 but does not exceed Rs.4,000,000	Rs.210,000 + 20% of the gross amount exceeding Rs.2,000,000
06	Where the gross amount of rent exceeds Rs.4,000,000 but does not exceed Rs.6,000,000	Rs.610,000 + 25% of the gross amount exceeding Rs.4,000,000
07	Where the gross amount of rent exceeds Rs.6,000,000 but does not exceed Rs.8,000,000	Rs.1,110,000 + 30% of the gross amount exceeding Rs.6,000,000
08	Where the gross amount of rent exceeds Rs.8,000,000	Rs.1,710,000 + 35% of the gross amount exceeding Rs.8,000,000

Table: Tax on Income from Property

Capital Gains on Disposal of Securities

Sec. 37A, Division VII, Part I, 1st Schedule

Serial No	Period	Tax Year 2015	Tax Year 2016	Tax Year 2017	Tax Years 2018 to 2021		Tax Year 2022 and onwards
Serial No	Period	Tax Year 2015	Tax Year 2016	Tax Year 2017	Securities acquired prior 01.07.2016	Securities acquired after 01.07.2016	Tax Year 2022 and onwards
01	Where holding period of a security is less than twelve months	12.5%	15%	15%	15%	15%	12.55%
02	Where holding period of a security is twelve months or more but less than twenty-four months	10%	12.5%	12.5%	12.5%
03	Where holding period of a security is twenty-four months or more but the security was acquired on or after 1st July, 2013	0%	7.5%	7.5%	7.5%
04	Where the security was acquired before 1st July, 2013	0%	0%	0%	0%	0%	0%
05	Future commodity contracts entered into by the members of Pakistan Mercantile Exchange	0%	0%	5%	5%	5%	5%

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 Redemtion of Securities, as specified below:

Serial No	Category	Rate of Tax
01	Individual and Association of Persons	10% for stock funds	10% for other funds
02	Company	10% for stock funds	25% for other funds

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

Serial No	Period	Rate of Tax
01	Where the gain does not exceed Rs.5 million	3.5%
02	Where the gain exceeds Rs.5 million but does not exceed Rs.10 million	7.5%
03	Where the gain exceeds Rs.10 million but does not exceed Rs.15 million	10%
04	Where the gain exceeds Rs.15 million	15%

Table: Capital Gains on Disposal of Immovable Property

Capital Gains on Disposal of Immovable Property

Sec. 37(3A)

Serial No	Holding Period	Rate of Tax
01	Where the holding period of an immovable property does not exceed one year	100%
02	Where the holding period of an immovable property exceeds one year	75%
03	Where the holding period of an immovable property exceeds two years but does not exceed three years	50%
04	Where the holding period of an immovable property exceeds three years but does not exceed four years	25%
05	Where the holding period of an immovable property exceeds four years	0%

Table: Capital Gains on Disposal of Immovable Property

Tax on Builders

Sec. 7C, Division VIII A, Part I, 1st Schedule

Karachi, Lahore and Islamabad		Abbottabad, Faisalabad, Gujranwala, Hyderabad, Mardan, Multan, Peshawar, Quetta, Rawalpindi, Sahiwal and Sukkur		Urban Areas not specified in A and B
For Commercial Buildings
Rs.210 / Sq Ft		Rs.210 / Sq Ft		Rs.210 / Sq Ft
For Residential Buildings
Area Sq. ft	Rate Sq. ft	Area Sq. ft	Rate Sq. ft	Area Sq. ft	Rate Sq. ft
Up to 750	Rs.20	Up to 750	Rs.15	Up to 750	Rs.10
751 to 1500	Rs.40	751 to 1500	Rs.35	751 to 1500	Rs.25
1501 and more	Rs.70	1501 and more	Rs.55	1501 and more	Rs.35

Table: Tax on Builders

Tax on Developers

Sec. 7D, Division VIII B, Part I, 1st Schedule

Karachi, Lahore and Islamabad		Hyderabad, Sukkur, Multan, Faisalabad, Rawalpindi, Gujranwala, Sahiwal, Peshawar, Mardan, Abbottabad and Quetta		Urban Areas not specified in A and B
For Commercial Plots
Rs.210 / Sq Yd		Rs.210 / Sq Yd		Rs.210 / Sq Yd
For Residential Plots
Area Sq. Yd	Rate Sq. Yd	Area Sq. Yd	Rate Sq. Yd	Area Sq. Yd	Rate Sq. Yd
Up to 120	Rs.20	Up to 120	Rs.15	Up to 120	Rs.10
121 to 200	Rs.40	121 to 200	Rs.35	121 to 200	Rs.25
201 and more	Rs.70	201 and more	Rs.55	201 and more	Rs.35

Table: Tax on Developers

Minimum Tax

Sec. 113, Division IX, Part I, 1st Schedule

Serial No	Person(s)	Minimum Tax as percentage of the person’s turnover for the year
01	Oil marketing companies, Oil refineries, Sui Southern Gas Company Limited and Sui Northern Gas Pipeline Limited (for the cases where annual turnover exceeds rupees one billion); Pakistani Airlines; and Poultry industry including poultry breeding, broiler production, egg production and poultry feed production.	0.75%
02	Oil refineries; and Motorcycle dealers registered under the Sales Tax Act, 1990	0.50%
03	Distributors of pharmaceutical products, fast moving consumer goods and cigarettes; Petroleum agents and distributors who are registered under the Sales Tax Act, 1990; Rice mills and dealers; Tier-1 retailers of fast moving consumer goods who are integrated with Board or its computerised system for real time reporting of sales and receipts; Person's turnover from supplies through e-commerce including from running an online marketplace as defined in clause (38B) of Sec. 2; Persons engaged in the sale and purchase of used vehicles; and Flour mills	0.25%
04	In all other cases	1.25%

Table: Minimum Tax

Reduction in Tax Liability for Full Time Teacher

Clause (2), Part III of 2nd Schedule

The tax payable by a fulltime teacher or a researcher, employed in a non-profit education or research institution duly recognised by HEC, a Board of Education or a University recognised by HEC including government research institution shall be reduced by an amount equal to 25% of the tax payable on his income from salary.

Provided that this clause shall not apply to teachers of medical profession who derive income from private medical practice or who receive share of consideration received from patients.

Table: Reduction in Tax Liability for Full Time Teacher

Payment of Advance Tax

Sec. 147

Installment	Quarter	Due Dates
Installment	Quarter	Individuals	AOPs / Companies
01	September	15th September	25th September
02	December	15th December	25th December
03	March	15th March	25th March
04	June	15th June	25th June

Table: Payment of Advance Tax

Advance Tax

Serial No	Person(s)	Rate of Tax
01	Industrial undertaking importing re-meltable steel (PCT Heading 72.04) and directly reduced iron for its own use; Persons importing potassic fertilizers in pursuance of Economic Coordination Committee of the cabinet’s decision No. ECC-155/12/2004 dated the 9th December, 2004; Persons importing urea; Manufacturers covered under Notification No. S.R.O. 1125(I)/2011 dated the 31st December, 2011 and importing items covered under S.R.O. 1125(I)/2011 dated the 31st December, 2011 Persons importing Gold; Persons importing Cotton; and Persons importing LNG	1% of the import value as increased by customs-duty, sales tax and federal excise duty
02	Persons importing pulses	2% of the import value as increased by customs-duty, sales tax and federal excise duty
03	Commercial importers covered under Notification No. S.R.O. 1125(I)/2011 dated the 31st December, 2011 and importing items covered under S.R.O 1125(I)/2011 dated the 31st December, 2011.	3% of the import value as increased by customs-duty, sales tax and federal excise duty
04	Persons importing coal	4%
05	Persons importing finished pharmaceutical products that are not manufactured otherwise in Pakistan, as certified by the Drug Regulatory Authority of Pakistan	4%
06	Ship breakers on import of ships	4.5%
07	Industrial undertakings not covered under S. Nos 01 to 06	5.5%
08	Companies not covered under S. Nos. 01 to 07	5.5%
09	Persons not covered under S. Nos. 01 to 08	6%

Table: Advance Tax

Advance Tax on Dividend

Serial No	Description	Rate of Tax
01	In case of dividends paid by Independent Power Purchasers where such dividend is a pass through item under an Implementation Agreement or Power Purchase Agreement or Energy Purchase Agreement and is required to be re-imbursed by Central Power Purchasing Agency (CPPA-G) or its predecessor or successor entoty.	7.5%
02	Other than mentioned above	15%

Table: Advance Tax on Dividend

Collection of Tax by a Registered Stock Exchange in Pakistan

Serial No	Description	Rate of Tax
01	In case of purchase of shares as per clause (a) of sub-section (1) of Section 233A.	0.02% of purchase value
02	In case of purchase of shares as per clause (b) of sub-section (1) of Section 233A.	0.02% of sale value

Table: Collection of Tax by a Stock Exchange in Pakistan

Collection of Tax on Passenger Transport Vehicles

Serial No	Capacity	Rate per seat per annum
01	Four or more persons but less than ten persons.	Rs.50
02	Ten or more persons but less than twenty persons.	Rs.100
03	Twenty persons or more.	Rs.300

Table: Collection of Tax on Passenger Transport Vehicles

Collection of Tax on Telephone Users

Serial No	Description	Rate of Tax
01	In the case of a phone subscriber (other than cell phone subscriber) where the amount of monthly bill exceeds Rs.1,000	10% of the exceeding amount of bill
02	In the case of subscriber of internet, mobile telephones and pre-paid internet or telephone card	12.5% of the amount of bill or sales price of internet pre-paid card or prepaid telephone card or sale of units through any electronic medium or whatever form.

Table: Collection of Tax on Telephone Users

Tax on Cash Withdrawal from a Bank

Serial No	Description	Rate of Tax
01	Cash amount withdrawn, for the person whose name is not appearing in the active taxpayer’s list.	0.6% of the amount withdrawn

Table: Tax on Cash Withdrawal from a Bank

Advance Tax on Transactions in Bank [Transferor]

Serial No	Description	Rate of Tax
01	The rate of tax to be deducted under Sec. 231AA for the person whose name is not appearing in the active taxpayers' list.	0.6% of the transaction

Table: Advance Tax on Transactions in Bank

Advance Tax on Banking Transactions Otherwise Than Through Cash [Receiver]

Serial No	Description	Rate of Tax
01	Banking Transaction (other than cash) at the time of sale of instrument, including demand draft, pay order, special deposit receipt, transfer of any sum through cheque, online transfer, ATM transfers or any other mode of electronic or paper based transfers.	0.4% of the transaction amount

Table: Advance Tax on Banking Transactions Otherwise Than Through Cash

Tax on Cable Television Operator

License Category as provided in PEMRA Rules	Tax on License Fee	Tax on Renewal
H	Rs.7,500	Rs.10,000
H-1	Rs.10,000	Rs.15,000
H-2	Rs.25,000	Rs.30,000
R	Rs.5,000	Rs.12,000
B	Rs.5,000	Rs.40,000
B-1	Rs.30,000	Rs.35,000
B-2	Rs.40,000	Rs.45,000
B-3	Rs.50,000	Rs.75,000
B-4	Rs.75,000	Rs.100,000
B-5	Rs.87,500	Rs.150,000
B-6	Rs.175,000	Rs.200,000
B-7	Rs.262,500	Rs.300,000
B-8	Rs.437,500	Rs.500,000
B-9	Rs.700,000	Rs.800,000
B-10	Rs.875,500	Rs.900,000

Table: Tax on Cable Television Operator

Advance Tax on Sale to Distributors, Dealers or Wholesalers

Serial No	Category of Sales	Rate of Tax
01	Fertilizers	0.7%
02	Other than Fertilizers	0.1%

Table: Advance Tax on Sale to Distributors, Dealers or Wholesalers

Advance Tax on Dealers, Commission Agents and Arhatis, etc.

Serial No	Group	Amount of Tax
01	Group or Class A	Rs.100,000
02	Group or Class B	Rs.7,5000
03	Group or Class C	Rs.5,0000
04	Any Other Category	Rs.5,0000

Table: Advance Tax on Dealers, Commission Agents and Arhatis, etc.

Advance Tax on Purchase of Immovable Property

Serial No	Period	Rate of Tax
01	Where the value of immovable property is up to 4 million	0%
02	Where the value of immovable property is more than 4 million	2%

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

Serial No	Description	Rate of Tax
01	The rate of tax to be collected under Sec 236K shall be in accordance with the fair market value.	1%

Table: Advance Tax on Sale or Transfer of Immovable Property

Advance Tax on International Air Ticket

Serial No	Type of Ticket	Rate of Tax
01	First / Executive Class	Rs.16,000 per person
02	Others excluding Economy	Rs.12,000 per person
03	Economy	0

Table: Advance Tax on International Air Ticket

Advance Tax on Functions and Gatherings

Serial No	Locations	Rate of Tax
01	For Islamabad, Lahore, Multan, Faisalabad, Rawalpindi, Gujranwala, Bahawalpur, Sargodha, Sahiwal, Sheikhupura, Dear Ghazi Khan, Karachi, Hyderabad, Sukkur, Thatta, Larkana, Mirpur Khas, Nawabshah, Peshawar, Mardan, Abbotabad, Kohat, Dera Ismail Khan, Quetta, Sibi, Loralai, Khuzdar, Dear Murad Jamali and Turbat.	5% of the bill ad valorem or Rs.20,000 per function, whichever is higher
02	For cities other than those mentioned above.	5% of the bill ad valorem or Rs.10,000 per function, whichever is higher

Table: Advance Tax on Functions and Gatherings

Advance Tax on Insurance Premium

Serial No	Type of Premium	Rate of Tax
01	General insurance premium	4%
02	Life insurance premium if exceeding Rs. 0.3 million in aggregate per annum	1%
03	Others	0%

Table: Advance Tax on Insurance Premium

Advance Tax on Extraction of Minerals

Serial No	Description	Rate of Tax
01	The rate of tax to be collected under Sec 236V as per value of the minerals.	5%

Table: Advance Tax on Extraction of Minerals

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What People Say About Us

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