Tax Savings on Property Rent Income by Deducting Expenses

Renting Out Property: Understand Tax Deductions

This article explains the deductions you can claim when filing taxes on rental income in Pakistan.

Maximizing Tax Benefits:

  • Reduce your tax burden by claiming allowable expenses against your rental income.

Deductible Expenses:

  1. Repair and Maintenance: Annual costs incurred for repairs and maintenance of the property (e.g., 20% for repairs and maintenance).
  2. Building Insurance: Premiums paid for property insurance.
  3. Property Tax: Taxes paid on the rental property.
  4. Loan Interest: Interest paid on a loan taken to purchase the rental property.
  5. Legal Fees: Legal expenses incurred during the transfer of the property (e.g., court fees, stamp duty).
  6. Other Expenses: Any other legitimate expenses related to the rental property.

Tax Calculation:

  • Deduct the allowable expenses from your total rental income.
  • Apply the relevant tax rate to the remaining amount.

Benefits of Proper Recordkeeping:

  • Maintain records of all expenses for claiming deductions.
  • Accurate recordkeeping helps avoid overpaying or underpaying taxes.

Filing Returns:

  • File your tax return to claim deductions and pay any remaining tax.


Understanding tax deductions for rental income can significantly reduce your tax liability. Keep proper records and consult Us for specific tax advice.

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