Final Tax on Income from Rent

Question

I have a rental proprty for which WHT is decucted at source. This year first time I seem to pay Final Tax on Income from Rent in addition to WHT. Was it applicable in previous year 2023-24?

Answer 1

• Income from property (rent) is normally under the normal tax regime (Section 15, Income Tax Ordinance 2001).

• The withholding tax (WHT) deducted by tenant under Section 155 is adjustable, not final tax—meaning it is advance tax against your actual tax liability.

• You must still compute your rental income, apply slab rates, and then adjust the deducted WHT.

• In Tax Year 2023–24, this treatment was the same; it was not a final tax regime then either.

• So, the current year is consistent—you’re required to pay tax on net rental income, with credit for WHT deducted at source.