ISLAMABAD: The Federal Board of Revenue (FBR) has issued its Withholding Income Tax Rate Card for fiscal year 2026-27, setting out tax rates for salaries, imports, banking transactions, property deals, digital payments, vehicles, utilities and a wide range of business activities.
The rate card has been updated in line with the Finance Act 2026 and reflects the tax position applicable up to June 30, 2026. FBR said the document is intended to help taxpayers, withholding agents and businesses understand the rates applicable to different categories of income, payments and transactions.
The card covers imports, salaries, profit on debt, payments to non-residents, goods and services, contracts, exports, rent, prizes, petroleum products, cash withdrawals, motor vehicles, electricity, telephone and internet services, property transactions and other areas.
Salary Tax Rates for FY2026-27
Under the new rate card, annual taxable salary income of up to Rs600,000 remains tax-free.
For income above Rs600,000 and up to Rs1.2 million, tax is charged at 1% of the amount exceeding Rs600,000.
For income between Rs1.2 million and Rs2.2 million, tax is Rs6,000 plus 11% of the amount exceeding Rs1.2 million.
For income between Rs2.2 million and Rs3.2 million, the tax is Rs116,000 plus 20% of the amount exceeding Rs2.2 million.
For income between Rs3.2 million and Rs4.1 million, the rate is Rs316,000 plus 25% of the amount exceeding Rs3.2 million.
For income between Rs4.1 million and Rs5.6 million, tax is Rs541,000 plus 29% of the amount exceeding Rs4.1 million.
Income between Rs5.6 million and Rs7 million is taxed at Rs976,000 plus 32% of the amount exceeding Rs5.6 million.
For annual taxable salary income above Rs7 million, the tax is Rs1.424 million plus 35% of the amount exceeding Rs7 million.
Banking and Profit on Debt
The rate card sets withholding tax on profit paid by banks or financial institutions at 20% for Active Taxpayers List (ATL) persons and 40% for non-ATL persons.
In certain other cases, profit on debt is subject to withholding tax rates of 15% for ATL taxpayers and 30% for non-ATL taxpayers.
Separate rates also apply to different categories of Sukuk returns and payments to non-residents.
IT, Services and Freelance Income
For IT and IT-enabled services, withholding tax is set at 4% for ATL persons and 8% for non-ATL persons.
Certain independent professional services are subject to withholding tax at 15% for ATL taxpayers and 30% for non-ATL taxpayers on the gross amount payable.
The card also sets a 0.25% withholding rate on export proceeds from computer software, IT and IT-enabled services for persons registered with the Pakistan Software Export Board.
General exports are subject to a withholding rate of 1.25%.
E-Commerce and Digital Payments
Payments for goods or services ordered through e-commerce platforms are also covered.
Where payment is made through digital or banking channels, withholding tax is set at 1% for ATL persons and 2% for non-ATL persons.
For cash-on-delivery transactions, the rates rise to 2% for ATL taxpayers and 4% for non-ATL taxpayers.
Income earned by digital content creators and social media influencers from social media platforms is subject to withholding tax at 5% for ATL persons and 10% for non-ATL persons.
Property Transactions
For transfer of immovable property, the rate card lists withholding tax at 2.75% for ATL persons and 11.5% for non-ATL persons.
Separate rates also apply to purchase of immovable property, rental income and other property-related transactions.
Vehicle Tax Rates
For motor vehicles, the withholding tax rate varies according to engine capacity.
For vehicles of up to 850cc, the rate is 0.5% for ATL persons and 1.5% for non-ATL persons.
For vehicles above 3,000cc, the rate rises to 12% for ATL taxpayers and 36% for non-ATL taxpayers.
The rate card also lists fixed tax amounts for other engine-capacity categories.
Electricity, Telephone and Internet
For commercial and industrial electricity consumers, no withholding tax applies on bills of up to Rs500.
Bills between Rs500 and Rs20,000 are subject to 10% withholding tax.
For commercial electricity bills above Rs20,000, the tax is Rs1,950 plus 12% of the amount exceeding Rs20,000. For industrial consumers, the corresponding rate is Rs1,950 plus 5% of the amount exceeding Rs20,000.
For non-ATL domestic consumers, monthly electricity bills below Rs25,000 are not subject to withholding tax, while bills of Rs25,000 or more attract a 7.5% rate.
For telephone users, monthly bills above Rs1,000 are subject to 10% tax on the amount exceeding Rs1,000.
Internet, mobile phone and prepaid internet or telephone cards are subject to 15% withholding tax on the bill or sale value.
FBR Says Rate Card Is for Guidance
FBR said the rate card has been prepared as a reference tool for taxpayers, withholding agents and other stakeholders.
The authority clarified that in case of any discrepancy or error, the Income Tax Ordinance 2001, as amended, will prevail.
The rate card itself cannot be treated as a legal document or relied upon before a court or legal forum.
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