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Selling rice, cotton seed, or edible oils comes with a low 1.5% tax for Filers, but a 3% tax for Non-Filers. • Salaries under Rs. 600,000 are completely tax-free, maintaining a 0% rate regardless of your taxpayer status. • Importing basic goods from Part-I of the Twelfth Schedule costs Active Taxpayers just 1% in tax, while Non-Filers have to pay 2%. • The sale of petroleum products is taxed at 12% for Filers and exactly double that at 24% for Non-Filers. • Buying a high-end 2501cc to 3000cc vehicle leaves Filers with a 9% tax bill, but absolutely punishes Non-Filers with a massive 27% tax rate. • Importing pharmaceutical products carries an 8% tax for Non-Filers, which is exactly double the 4% rate applied to Active Taxpayers. • Purchasing a 1601cc to 1800cc vehicle will cost Non-Filers a 9% tax, which is three times the 3% rate given to Active Filers. • Capital gains arising on the disposal of certain debt securities are taxed at 15% for Filers, but double to 30% for Non-Filers. • Cash withdrawals by a person whose name does not appear on the Active Taxpayers’ List are hit with an automatic 0.8% advance tax. • Winning a raffle, lottery, or sales promotion prize costs Non-Filers a whopping 40% in tax, compared to 20% for Filers. • Payments to electronic and print media for advertising services are taxed at just 1.5% for Active Taxpayers, compared to 3% for Non-Filers. • The withholding tax on banking and financial institution profits is set at 20% for those on the Active Taxpayers’ List, but jumps to 40% for those off the list. • Payments made to non-resident sportspersons incur a 15% tax if they are on the ATL, and a massive 30% if they are non-ATL. • Registering a 2001cc to 2500cc luxury vehicle incurs a 7% tax for Active Filers, but a staggering 21% tax for Non-Filers. • Commercial importers of Part-II goods face a 3.5% withholding tax if they are Filers, but the rate doubles to 7% for Non-Filers. • Profits on debt from mutual funds deriving 50% or more income from debt carry a huge 50% tax for Non-Filers, compared to 25% for Filers. • If you receive dividends from Independent Power Purchasers (IPPs), Filers pay a 7.5% tax while Non-Filers surrender 15%. • Providing IT and IT-enabled services costs Active Taxpayers just 4% in withholding tax, while Non-Filers must pay 8%. • Buyers of 1301cc to 1600cc cars pay a 2% advance tax if they are Filers, but Non-Filers pay exactly triple at 6%. • Companies generating rental income from immovable property pay a 15% tax if they are Active Filers, but face a 30% rate as Non-Filers. • Active Filers importing CKD kits for Electric Vehicles pay a minimal 1% tax, whereas Non-Filers pay double at 2%. • Winning a prize bond or crossword puzzle means you lose 15% to taxes as an Active Filer, but a massive 30% if you are a Non-Filer. • Pensions under 10 million rupees remain 100% tax-exempt for everyone, no matter what your filing status is. • Registering a 1000cc motor vehicle costs Filers just 1% in tax, while Non-Filers are penalized with a 3% tax. • Dividends from Real Estate Investment Trusts (REITs) and general companies cost Active Filers 15% in tax, but Non-Filers lose a massive 30%. • Commercial importers bringing in Part-III items are hit with a 12% tax rate if they are Non-Filers, compared to only 6% for Active Filers. • Selling rice, cotton seed, or edible oils comes with a low 1.5% tax for Filers, but a 3% tax for Non-Filers. • Salaries under Rs. 600,000 are completely tax-free, maintaining a 0% rate regardless of your taxpayer status. • Importing basic goods from Part-I of the Twelfth Schedule costs Active Taxpayers just 1% in tax, while Non-Filers have to pay 2%. • The sale of petroleum products is taxed at 12% for Filers and exactly double that at 24% for Non-Filers. • Buying a high-end 2501cc to 3000cc vehicle leaves Filers with a 9% tax bill, but absolutely punishes Non-Filers with a massive 27% tax rate. • Importing pharmaceutical products carries an 8% tax for Non-Filers, which is exactly double the 4% rate applied to Active Taxpayers. • Purchasing a 1601cc to 1800cc vehicle will cost Non-Filers a 9% tax, which is three times the 3% rate given to Active Filers. • Capital gains arising on the disposal of certain debt securities are taxed at 15% for Filers, but double to 30% for Non-Filers. • Cash withdrawals by a person whose name does not appear on the Active Taxpayers’ List are hit with an automatic 0.8% advance tax. • Winning a raffle, lottery, or sales promotion prize costs Non-Filers a whopping 40% in tax, compared to 20% for Filers. • Payments to electronic and print media for advertising services are taxed at just 1.5% for Active Taxpayers, compared to 3% for Non-Filers. • The withholding tax on banking and financial institution profits is set at 20% for those on the Active Taxpayers’ List, but jumps to 40% for those off the list. • Payments made to non-resident sportspersons incur a 15% tax if they are on the ATL, and a massive 30% if they are non-ATL. • Registering a 2001cc to 2500cc luxury vehicle incurs a 7% tax for Active Filers, but a staggering 21% tax for Non-Filers. • Commercial importers of Part-II goods face a 3.5% withholding tax if they are Filers, but the rate doubles to 7% for Non-Filers. • Profits on debt from mutual funds deriving 50% or more income from debt carry a huge 50% tax for Non-Filers, compared to 25% for Filers. • If you receive dividends from Independent Power Purchasers (IPPs), Filers pay a 7.5% tax while Non-Filers surrender 15%. • Providing IT and IT-enabled services costs Active Taxpayers just 4% in withholding tax, while Non-Filers must pay 8%. • Buyers of 1301cc to 1600cc cars pay a 2% advance tax if they are Filers, but Non-Filers pay exactly triple at 6%. • Companies generating rental income from immovable property pay a 15% tax if they are Active Filers, but face a 30% rate as Non-Filers. • Active Filers importing CKD kits for Electric Vehicles pay a minimal 1% tax, whereas Non-Filers pay double at 2%. • Winning a prize bond or crossword puzzle means you lose 15% to taxes as an Active Filer, but a massive 30% if you are a Non-Filer. • Pensions under 10 million rupees remain 100% tax-exempt for everyone, no matter what your filing status is. • Registering a 1000cc motor vehicle costs Filers just 1% in tax, while Non-Filers are penalized with a 3% tax. • Dividends from Real Estate Investment Trusts (REITs) and general companies cost Active Filers 15% in tax, but Non-Filers lose a massive 30%. • Commercial importers bringing in Part-III items are hit with a 12% tax rate if they are Non-Filers, compared to only 6% for Active Filers. •

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Commercial importers bringing in Part-III items are hit with a 12% tax rate if they are Non-Filers, compared to only 6% for Active Filers. • Payments to electronic and print media for advertising services are taxed at just 1.5% for Active Taxpayers, compared to 3% for Non-Filers. • Registering a 2001cc to 2500cc luxury vehicle incurs a 7% tax for Active Filers, but a staggering 21% tax for Non-Filers. • Winning a raffle, lottery, or sales promotion prize costs Non-Filers a whopping 40% in tax, compared to 20% for Filers. • Active Filers importing CKD kits for Electric Vehicles pay a minimal 1% tax, whereas Non-Filers pay double at 2%. • Importing pharmaceutical products carries an 8% tax for Non-Filers, which is exactly double the 4% rate applied to Active Taxpayers. • Salaries under Rs. 600,000 are completely tax-free, maintaining a 0% rate regardless of your taxpayer status. • If you receive dividends from Independent Power Purchasers (IPPs), Filers pay a 7.5% tax while Non-Filers surrender 15%. • Selling rice, cotton seed, or edible oils comes with a low 1.5% tax for Filers, but a 3% tax for Non-Filers. • The sale of petroleum products is taxed at 12% for Filers and exactly double that at 24% for Non-Filers. • Buyers of 1301cc to 1600cc cars pay a 2% advance tax if they are Filers, but Non-Filers pay exactly triple at 6%. • Winning a prize bond or crossword puzzle means you lose 15% to taxes as an Active Filer, but a massive 30% if you are a Non-Filer. • Capital gains arising on the disposal of certain debt securities are taxed at 15% for Filers, but double to 30% for Non-Filers. • Payments made to non-resident sportspersons incur a 15% tax if they are on the ATL, and a massive 30% if they are non-ATL. • Dividends from Real Estate Investment Trusts (REITs) and general companies cost Active Filers 15% in tax, but Non-Filers lose a massive 30%. • Cash withdrawals by a person whose name does not appear on the Active Taxpayers’ List are hit with an automatic 0.8% advance tax. • Importing basic goods from Part-I of the Twelfth Schedule costs Active Taxpayers just 1% in tax, while Non-Filers have to pay 2%. • Pensions under 10 million rupees remain 100% tax-exempt for everyone, no matter what your filing status is. • Buying a high-end 2501cc to 3000cc vehicle leaves Filers with a 9% tax bill, but absolutely punishes Non-Filers with a massive 27% tax rate. • Companies generating rental income from immovable property pay a 15% tax if they are Active Filers, but face a 30% rate as Non-Filers. • Commercial importers of Part-II goods face a 3.5% withholding tax if they are Filers, but the rate doubles to 7% for Non-Filers. • The withholding tax on banking and financial institution profits is set at 20% for those on the Active Taxpayers’ List, but jumps to 40% for those off the list. • Profits on debt from mutual funds deriving 50% or more income from debt carry a huge 50% tax for Non-Filers, compared to 25% for Filers. • Registering a 1000cc motor vehicle costs Filers just 1% in tax, while Non-Filers are penalized with a 3% tax. • Providing IT and IT-enabled services costs Active Taxpayers just 4% in withholding tax, while Non-Filers must pay 8%. • Purchasing a 1601cc to 1800cc vehicle will cost Non-Filers a 9% tax, which is three times the 3% rate given to Active Filers. • Commercial importers bringing in Part-III items are hit with a 12% tax rate if they are Non-Filers, compared to only 6% for Active Filers. • Payments to electronic and print media for advertising services are taxed at just 1.5% for Active Taxpayers, compared to 3% for Non-Filers. • Registering a 2001cc to 2500cc luxury vehicle incurs a 7% tax for Active Filers, but a staggering 21% tax for Non-Filers. • Winning a raffle, lottery, or sales promotion prize costs Non-Filers a whopping 40% in tax, compared to 20% for Filers. • Active Filers importing CKD kits for Electric Vehicles pay a minimal 1% tax, whereas Non-Filers pay double at 2%. • Importing pharmaceutical products carries an 8% tax for Non-Filers, which is exactly double the 4% rate applied to Active Taxpayers. • Salaries under Rs. 600,000 are completely tax-free, maintaining a 0% rate regardless of your taxpayer status. • If you receive dividends from Independent Power Purchasers (IPPs), Filers pay a 7.5% tax while Non-Filers surrender 15%. • Selling rice, cotton seed, or edible oils comes with a low 1.5% tax for Filers, but a 3% tax for Non-Filers. • The sale of petroleum products is taxed at 12% for Filers and exactly double that at 24% for Non-Filers. • Buyers of 1301cc to 1600cc cars pay a 2% advance tax if they are Filers, but Non-Filers pay exactly triple at 6%. • Winning a prize bond or crossword puzzle means you lose 15% to taxes as an Active Filer, but a massive 30% if you are a Non-Filer. • Capital gains arising on the disposal of certain debt securities are taxed at 15% for Filers, but double to 30% for Non-Filers. • Payments made to non-resident sportspersons incur a 15% tax if they are on the ATL, and a massive 30% if they are non-ATL. • Dividends from Real Estate Investment Trusts (REITs) and general companies cost Active Filers 15% in tax, but Non-Filers lose a massive 30%. • Cash withdrawals by a person whose name does not appear on the Active Taxpayers’ List are hit with an automatic 0.8% advance tax. • Importing basic goods from Part-I of the Twelfth Schedule costs Active Taxpayers just 1% in tax, while Non-Filers have to pay 2%. • Pensions under 10 million rupees remain 100% tax-exempt for everyone, no matter what your filing status is. • Buying a high-end 2501cc to 3000cc vehicle leaves Filers with a 9% tax bill, but absolutely punishes Non-Filers with a massive 27% tax rate. • Companies generating rental income from immovable property pay a 15% tax if they are Active Filers, but face a 30% rate as Non-Filers. • Commercial importers of Part-II goods face a 3.5% withholding tax if they are Filers, but the rate doubles to 7% for Non-Filers. • The withholding tax on banking and financial institution profits is set at 20% for those on the Active Taxpayers’ List, but jumps to 40% for those off the list. • Profits on debt from mutual funds deriving 50% or more income from debt carry a huge 50% tax for Non-Filers, compared to 25% for Filers. • Registering a 1000cc motor vehicle costs Filers just 1% in tax, while Non-Filers are penalized with a 3% tax. • Providing IT and IT-enabled services costs Active Taxpayers just 4% in withholding tax, while Non-Filers must pay 8%. • Purchasing a 1601cc to 1800cc vehicle will cost Non-Filers a 9% tax, which is three times the 3% rate given to Active Filers. •

Individual and Business Income Tax Slabs (2026-27) in Pakistan

This article outlines the business income tax rates applicable in Pakistan for individuals and associations of persons (AOPs) as per 2025-26.

The taxation system of Pakistan is a multifaceted framework comprising federal and provincial levies on income, goods, and services. This guide provides a detailed exposition of the current tax rates applicable across various categories, including federal income tax for individuals, associations of persons (AOPs), and corporations, as well as federal sales tax on goods and services.

Individuals & AOPs Tax Slabs

The income tax rates applicable to AOPs in Pakistan for the fiscal year 2026-2027 align with those for non-salaried individuals or whose income from salary is less than 75% of their total taxable income. This indicates a consistent tax treatment for unincorporated business structures and individuals whose primary income is derived from business or profession.

For individuals whose income from salary exceeds 75% of their total taxable income, a specific set of salary tax slabs and rates is applicable for the fiscal year 2026-2027.

A specific set of tax slabs and rates is applicable for the fiscal year 2025-2026, with increasing rates applied to higher income brackets.

Income Tax Slabs Individuals and AOPs (FY 2026-27)

S.No	Taxable Income (PKR)	Rate of Tax
1	Does not exceed 600,000	0%
2	Exceeds 600,000 but does not exceed 1,200,000	15% of the amount exceeding 600,000
3	Exceeds 1,200,000 but does not exceed 1,600,000	PKR 90,000 + 20% of the amount exceeding 1,200,000
4	Exceeds 1,600,000 but does not exceed 3,200,000	PKR 170,000 + 30% of the amount exceeding 1,600,000
5	Exceeds 3,200,000 but does not exceed 5,600,000	PKR 650,000 + 40% of the amount exceeding 3,200,000
6	Exceeds 5,600,000	PKR 1,610,000 + 45% of the amount exceeding 5,600,000

Small and Medium Enterprises (SMEs) engaged in the manufacturing sector benefit from special income tax rates based on their annual business turnover.

Category 1 SMEs, with a turnover not exceeding PKR 100 million, are taxed at 7.5% of their taxable income.
Category 2 SMEs, with a turnover exceeding PKR 100 million but not exceeding PKR 250 million, are taxed at 15% of their taxable income.

Furthermore, SMEs have the option to opt for a final tax regime (FTR) based on their gross turnover, with rates of 0.25% for Category 1 and 0.5% for Category 2. This differentiated tax regime aims to support the growth and development of the SME sector.

Corporate Tax Rates in Pakistan

The federal corporate income tax rates in Pakistan vary based on the type of company. For the fiscal year 2026-2027, banking companies are subject to a tax rate of 39%, while public companies (other than banking companies) and any other companies face a rate of 29%. A reduced rate of 20% is applicable to small companies. , whose annual turnover is less than 250 million rupees.

Where the tax payable by a company is less than 1.25% of its turnover, the company is required to pay a minimum tax equivalent to 1.25% of the turnover.

Super Tax Rates in Pakistan

S. No.	Category of Person / Sector	Threshold	Rate of Tax
1.	Banking Companies	Income exceeding Rs. 150 million	10% of income
2.	Exploration & Production (E&P) (Fifth Schedule, Part I)	Income exceeding Rs. 150 million	10% of income
3.	Fertilizer Sector	Income exceeding Rs. 150 million	10% of income
4.	Other Persons (Individuals, AOPs, and all other Companies)	Income exceeding Rs. 500 million	8% of income

Alternate Corporate Tax Rates in Pakistan

The Alternate Corporate Tax (ACT) sets the minimum tax liability for corporations as the higher of 17% of their accounting income or their corporate tax liability calculated under the Income Tax Ordinance 2001, including the minimum tax on turnover. This acts as an additional safeguard to ensure a minimum level of tax contribution from companies.

Export Income Tax Rates in Pakistan

The taxation regime for exporters has undergone a significant change with the abolition of the Final Tax Regime (FTR). Income from exports is now subject to the normal tax rates. However, a tax collected at the rate of 1% on export proceeds is treated as a minimum tax. This shift aims for greater equity in taxation across different income sources.

An exception exists for the export of IT and IT-enabled services by entities registered with the Pakistan Software Export Board (PSEB), where a withholding tax (WHT) of 0.25% is considered the final discharge of tax liability until the tax year 2029.

Sales Tax Rates

The federal government levies sales tax on the supply of goods and services, with a standard rate and specific variations and exemptions.

The current standard federal sales tax rate on goods in Pakistan is 18%. This rate was increased from 17% in 2023 as part of measures to reduce the fiscal gap and increase the tax-to-GDP ratio. While the standard rate applies to most goods, certain exemptions and variations exist based on the nature of the goods and government policies.

Sales Tax on Services is 15% in Islamabad, Sindh, Balochistan and Khyber Pakhtunkhwa. However, in Punjab GST rate is 16%.

Taxes on Agricultural Income

While agricultural income is exempt from federal income tax in Pakistan, this does not mean it is entirely tax-free. Under the Constitution of Pakistan, the authority to tax agricultural income lies with the provincial governments. This means each province has its own rules, tax slabs, and exemptions regarding agricultural income.

If you earn income through agriculture, it’s essential to understand the agricultural tax laws of the province where your agricultural land is situated.

Understanding business and individual income tax rates is essential for responsible financial management in Pakistan. By referring to these tax rates and consulting a tax professional, businesses can ensure they are fulfilling their tax obligations accurately.

Faiza Ehsan

Articles: 72

11 Comments

Shas

September 25, 2025 / 9:38 pm Reply

WH Tax on Services rendered by I.T Vendor?? If he is non – filer
Ms. Asghar

July 22, 2025 / 10:34 am Reply

Thank you for providing feedback on individual queries; it is really appreciated.
I would request again the guidance on profit on debt exceeding 5 million per year. When we talk about profit on debt, 1) does it mean GROSS PROFIT?

2) For 5 million limit, does it consider total profit received from National Saving Certificate and deposit in Bank collectively or 5 million limit is considered for each entity separately, as both account codes are different (profit from National Saving Cert 39(4A)- 64230052 and from bank/financial institutions 7B- 64310056.
3) If Gross profit from National Saving certificate is 25 Lacs and from bank saving account is 26 lacs, tax applicability on total profit, Business tax will apply on total profit 51 lacs (25+26=51) or 5 million will be charges under 15% for filer and 0.1 million under business tax slabs. Your kind feedback is requested
- Hayat Akbar
  
  July 24, 2025 / 6:12 pm Reply
  
  WHT is taxed on Gross, Final will be calculated on Net (excluding Zakat, and other bank charges). Tax on Saving Certificates is final. The rest of the profits will be treated as for 5 million slab.
  - Shahid Saeed
    
    September 3, 2025 / 10:21 pm Reply
    
    Sir, I am a 73-year-old retired person. I have kept all my savings in savings accounts in two banks and I use their monthly profits to meet my and my daughter’s all day to day & household expenses. This year, my total profit from both banks is more than 5 million (e.g 6.1 mio), on which the banks have already deducted 15% tax. Now I have to file the return for the year 2024-2025. Please guide me that how much more tax I will have to pay on this profit.
    Many thanks & regards
    - Hayat Akbar
      
      September 3, 2025 / 10:41 pm Reply
      
      The slabs are given above. Your taxes will be about PKR 1,610,000 + 45% of the amount exceeding 5,600,000 (500,000). However, the taxes deducted by the bank on the profit (15%) will be adjusted.
      - Shahid Saeed
        
        September 6, 2025 / 7:07 am
        
        Thank you for your quick response, appreciate it.
        Regards
  - nisar ahmed
    
    September 20, 2025 / 3:59 pm Reply
    
    I am a salary person and my annual gross salary is Rs.1150000/- per annum and my 2nd income earned as commission Rs.700000/-per annum, please advise which tax rate will be applicable & why?
    - Binte Zafar
      
      September 20, 2025 / 5:01 pm Reply
      
      Tax will be calculated on total income.
Muhammad Imran

July 16, 2025 / 3:36 pm Reply

profit on tax for filer 2025/2026 15% or 20%
- Binte Zafar
  
  July 16, 2025 / 8:39 pm Reply
  
  Profit on Bank deposits 20%
NAVEED BUTT (FPA)

July 7, 2025 / 7:21 pm Reply

what parameter for registration in