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 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 NoPayment / TransactionWithholding Tax Rates
Part I of 12th SchedulePart II of 12th SchedulePart III of 12th Schedule
FilerNon-FilerFilerNon-FilerFilerNon-Filer
01Imports (Minimum Tax except manufacture and listed companies)1%2%2%4%5.50%11%
02Commercial Imports (Importing goods)3.5%7%
03Manufacturers Covered Under SRO 1125(I)/20111%2%
04Pharmaceutical Imported Finish Goods4%8%
05Importers 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 NoC&F Value of Mobile Phone (US$)Tax in Rupees
FilerNon-Filer
In CBU condition under PCT Heading 8517.1219
01Up to 30 except smart phones70140
02Exceeding 30 and up to 100 and smart phones up to 100100200
03Exceeding 100 and up to 2009301,860
04Exceeding 200 and up to 3509701,940
05Exceeding 350 and up to 5005,00010,000
06Exceeding 50011,50023,000
In CSK / SKD condition under PCT Heading 8517.1211
07Exceeding 350 and up to 5003,0006,000
08Exceeding 5005,20010,400

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 NoTaxable IncomeRate of Tax
01Where taxable income does not exceed Rs.600,0000%
02Where taxable income exceeds Rs.600,000 but does not exceed Rs.1,200,0002.5% of the amount exceeding Rs.600,000
03Where taxable income exceeds Rs.1,200,000 but does not exceed Rs.2,400,000Rs.15,000 plus 12.5% of the amount exceeding Rs.1,200,000
04Where taxable income exceeds Rs.2,400,000 but does not exceed Rs.3,600,000Rs.165,000 plus 20% of the amount exceeding Rs.2,400,000
05Where taxable income exceeds Rs.3,600,000 but does not exceed Rs.6,000,000Rs.405,000 plus 25% of the amount exceeding Rs.3,600,000
06Where taxable income exceeds Rs. 6,000,000 but does not exceed Rs.12,000,000Rs.1,005,000 plus 32.5% of the amount exceeding Rs.6,000,000
07Where taxable income exceeds Rs. 12,000,000Rs.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 NoTaxable IncomeRate of Tax
01Where taxable income does not exceed Rs.600,0000%
02Where taxable income exceeds Rs.600,000 but does not exceed Rs.800,0005% of the amount exceeding Rs.600,000
03Where taxable income exceeds Rs.800,000 but does not exceed Rs.1,200,000Rs.10,000 plus 12.5% of the amount exceeding Rs.800,000
04Where taxable income exceeds Rs.1,200,000 but does not exceed Rs.2,400,000Rs.60,000 plus 17.5% of the amount exceeding Rs.1,200,000
05Where taxable income exceeds Rs.2,400,000 but does not exceed Rs.3,000,000Rs.270,000 plus 22.5% of the amount exceeding Rs.2,400,000
06Where taxable income exceeds Rs.3,000,000 but does not exceed Rs.4,000,000Rs.405,000 plus 27.5% of the amount exceeding Rs.3,000,000
07Where taxable income exceeds Rs.4,000,000 but does not exceed Rs.6,000,000Rs.680,000 plus 32.5% of the amount exceeding Rs.4,000,000
08Where taxable income exceeds Rs.6,000,000Rs.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 NoTypeRate of Tax
01Banking Companies39%
02Public / Private Companies29%
03Small Companies20%
04Alternate Corporate Tax (ACT) u/Sec. 113C17% of accounting profit
05Modaraba25%

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 NoDescriptionRate of Tax
01Up to Rs.150 million0%
02Exceeding Rs.150 million to Rs.200 million1%
03Exceeding Rs.200 million to Rs.250 million2%
04Exceeding Rs.250 million to Rs.300 million3%
05Above Rs.300 million4%
06For Banking Company Tax Year 20224%
07For Banking Company Tax Year 2023 and onwards where income exceeds Rs.300 million.10% of the income
08For 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 NoDescriptionFilerNon-Filer
01Dividend 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%
02In 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%
03Dividend received by a REIT scheme from Special Purpose Vehicle0%
04Dividend received by others from Special Purpose Vehicle as defined under the Real Estate Investment Trust Regulations, 2015.35%
05In mutual fund, Real Estate Investment Trusts and cases other than mentioned above.15%30%
06Dividends 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 NoDescriptionCompanies / Individual / AOP
FilerNon-Filer
Interest on Profit on Debt [Sec. 151]
01Interest15%30%
02National Saving Scheme (NSS)
03Bank Account
04Federal, Provincial & Local Government Bonds
05Company Loans
06Profit 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]
07Profit on debt paid, covered under clauses (78) and (79) of Part I of the 2nd Schedule0% [Clause 5AC of Part II of 2nd Schedule]
Interest on Investment in Sukuks from a Sukuk Holder [Sec. 151(1A)]
01Sukuk Holder as a Company25%50%
02Sukuk Holder as an Individual or an Association of Persons, if the Return on Investment is more than one million12.50%25%
03Sukuk Holder as an Individual or an Association of Persons, if the Return on Investment is less than one million10%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 NoDescriptionCompanies / Individual / AOP
FilerNon-Filer
01Royalty or Fee for Technical Services15%30%
02Construction Services7%7%
03Advertisement by TV Satellite Channels
04Media Person Advertisement Services10%10%
05Fee for Offshore Digital Services
06Any Other Services20%40%
CompaniesIndividual / AOP
FilerNon-FilerFilerNon-Filer
07Supply of Goods4%4%4.50%4.50%
08Services8%16%10%20%
09Contract7%14%7%14%
FilerNon-Filer
10Sportsman10%20%
11Foreign Produced Commercial20%40%
CompaniesIndividual / AOP
FilerNon-FilerFilerNon-Filer
12Transport Services3%6%3%6%
13Freight Forwarding Services
14Air Cargo Services
15Courier Services
16Manpower Outsourcing Services
17Hotel Services
18Security Guard Services
19Software Development Services
20IT Services & IT Enabled Services
21Tracking Services
22Advertising Services (Other than Print / Electronic Media)
23Share Registrar Services
24Engineering Services
25Car Rental Services
26Building Maintenance Services
27Services rendered by Pakistan Stock Exchange Limited and Pakistan Mercantile Exchange Limited
28Inspection
29Certification
30Testing
31Training Services

Table: Tax on Non-Residents

TAX ON GOODS, SERVICES & CONTRACTS

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

Serial NoDescriptionCompaniesIndividual / AOP
FilerNon-FilerFilerNon-Filer
01Rice, Cotton Seed Oil, Edible Oils (If Annual Supplies > 75K)1.5%3%1.5%3%
02Other Goods including Toll Manufacturing (If Annual Supplies > 75K)4%8%4.5%9%
03Distributor, Wholesaler, Retailer, Dealer and Sub-Dealer of FMCG, Fertilizer, electronics excluding mobile phones, sugar, Cement and Edible Oil0.25%8%0.25%9%
04Traders of Yarn0.5%1%0.5%1%
05Services (If Annual Services > 30K)8%16%10%20%
06Transport Services3%6%3%6%
07Freight Forwarding Services
08Air Cargo Services
09Courier Services
10Manpower Outsourcing Services
11Hotel Services
12Security Guard Services
13Software Development Services
14IT Services & IT Enabled Services
15Tracking Services
16Advertising Services (Other than Print / Electronic Media)
17Share Registrar Services
18Engineering Services
19Warehousing Services
20Services rendered by Asset Management Companies
21Data Services Licensed by PTA
22Telecommunication Infrastructure (Tower) Services
23Car Rental Services
24Building Maintenance Services
25Services Rendered by Pakistan Stock Exchange Limited & Pakistan Mercantile Exchange Limited
26Inspection
27Certification
28Testing
29Training Services
30Oilfield Service
31Telecommunication Services
32Collateral Management Services
33Travel & Tour Services
34Electronic & Print Media Advertising Services1.5%3%1.5%3%
35Contracts (If Annual Contract > 10K)7%14%7.5%15%
FilerNon-Filer
36Sportsman10%20%
Companies / Individual / AOP
FilerNon-Filer
37Stitching, 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 NoDescriptionCompany / AOP / Individual
Filer / Non-Filer
01Exports1%
02Export of Goods1%
03Export Commission5%
04Inland Bank to Bank Letter of Credit1%
05Export Processing Zone1%
06Indirect Exporter; SPO1%
07Clearing of Goods1%
08Export of Services1%

Table: Tax Rates on Exports & Export of Services

TAX ON RENT OF IMMOVABLE PROPERTY

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

Serial NoGross Amount of RentRate of Tax
01Where the gross amount of rent does not exceed Rs.300,000Nil
02Where the gross amount of rent exceeds Rs.300,000 but does not exceed Rs.600,0005% of the gross amount exceeding Rs.300,000
03Where the gross amount of rent exceeds Rs.600,000 but does not exceed Rs.2,000,000Rs.15,000 plus 10% of the gross amount exceeding Rs.600,000
04Where the gross amount of rent exceeds Rs.2,000,000Rs.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 NoDescriptionCompanies / Individual / AOP
FilerNon-Filer
01Prize Bonds15%30%
02Prizes, Winning, Lottery and Raffles20%40%

Table: Tax on Prizes & Winnings

TAX ON PETROLEUM PRODUCTS

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

Serial NoDescriptionCompanies / Individual / AOP
FilerNon-Filer
01Petrol & Petroleum Products12%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 NoDescriptionEngine CapacityFilerNon-Filer
01At the time of Leasing of Motor VehicleAny Motor Vehicle4%
02On Registration by Excise & Taxation Dept. and On Sale by Manufacturer (Car or Jeep)Up to 850cc7,50015,000
851cc to 1000cc15,00030,000
1001cc to 1300cc25,00050,000
1301cc to 1600cc50,000100,000
1601cc to 1800cc75,000150,000
1801cc to 2000cc100,000200,000
2000cc to 2500cc150,000300,000
2500cc to 3000cc200,000400,000
Above 3000cc250,000500,000
03Transfer of Ownership (Tax rate shall be reduced by 10% each year from the date of 1st Registration)Up to 850cc
851cc to 1000cc5,00010,000
1001cc to 1300cc7,50015,000
1301cc to 1600cc12,50025,000
1601cc to 1800cc18,75037,500
1801cc to 2000cc25,00050,000
2000cc 2500cc37,50075,000
2500cc to 3000cc50,000100,000
Above 3000cc62,500125,000
04Sold Locally Manufactured Motor VehiclesUp to 1000cc50,000100,000
1001cc to 2000cc100,000200,000
2001cc and above200,000400,000
05Private Motor VehiclesUp to 1000cc8001,600
1001cc to 1199cc1,5003,000
1200cc to 1299cc1,7503,500
1300cc to 1499cc2,5005,000
1500cc to 1599cc3,7507,500
1600cc to 1999cc4,5009,000
2000cc and above10,00020,000

Table: Advance Tax on Purchase, Registration & Transfer

TAX ON BROKERAGE AND COMMISSION

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

Serial NoDescriptionCompanies / Individual / AOP
FilerNon-Filer
01Advertising agents10%20%
02Life insurance agents where commission received is less than Rs.0.5 million per annum8%16%
03Persons not covered in 1 and 2 above12%24%

Table: Tax on Brokerage and Commission

TAX ON ELECTRICITY CONSUMPTION

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

Serial NoGross AmountAssesseeCompanies / Individual / AOP
FilerNon-Filer
1Up to Rs.500CommercialRs. 0
IndustrialRs. 0Rs. 0
2Exceeds Rs.500 but does not exceed Rs.20,000Commercial10%
Industrial10%20%
3Exceeds Rs.20,000CommercialRs.1,950 plus 12%
IndustrialRs.1,950 plus 5%Rs.1,950 plus 10%
4Less than Rs.25,000Domestic Electricity Consumption
5Exceeds Rs.25,0007.5%

Table: Tax on Electricity Consumption

TAX ON TELEPHONE AND INTERNET

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

Serial NoDescriptionCompanies / Individual / AOP
01In case of telephone subscriber (other than the mobile phone subscriber) where the amount of monthly bill exceeds Rs.1,00010% of the exceeding amount of bill
02In the case of subscriber of internet, mobile telephone and pre-paid internet or telephone card10% 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 NoDescriptionCompanies / Individual / AOP
FilerNon-Filer
01Gross sale price of any property or goods sold by auction10%20%
02Immovable property sold by auction5%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 NoDescriptionCompanies / Individual / AOP
FilerNon-Filer
01On Sale of Property1%2%
02On Purchase of Property and person responsible for collecting payments in instalment as per Fair Market Value1%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 NoCategory of SaleCompanies / Individual / AOP
FilerNon-Filer
01Fertilizers0.25%0.7%
02Other than fertilizers0.1%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 NoGross amount of SaleCompanies / Individual / AOP
FilerNon-Filer
01Sale to Retailers0.5%1%

Table: Advance Tax on Sale to Retailers

COLLECTION OF ADVANCE TAX BY EDUCATIONAL INSTITUTIONS

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

Serial NoGross amount of FeeCompanies / Individual / AOP
FilerNon-Filer
01Education Expenses5%

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 NoDescriptionCompanies / Individual / AOP
01Rent of Collection of Tax10%

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 NoProfit on DebtRate of Tax
01Where profit on debt does not exceed Rs.5,000,00015%
02Where profit on debt exceeds Rs.5,000,000 but does not exceed Rs.25,000,00017.5% of the amount exceeding Rs.5,000,000
03Where profit on debt exceeds Rs.25,000,000 but does not exceed Rs.36,000,00020% 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 NoDescriptionRate of Tax
01In the case of shipping income8% of the gross amount received or receivable
02In the case of air transport income3% 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 NoSukuk-holderRate of Tax
01Company25%
02Individual & AOP, if the return on investment is more than Rs.1,000,00012.5%
03Individual & AOP, if the return on investment is less than Rs.1,000,00010%

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 NoCategoryRate of Tax
01Royalty (Sec. 6)15% of the gross amount
02Fee for Technical Services (Sec. 6)15% of the gross amount
03Offshore digital services (Sec. 6)5% of the gross amount
04Shipping income (Sec. 7)8% of the gross amount received or receivables
05Air 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 NoGross Amount of RentRate of Tax
01Where the gross amount of rent does not exceed Rs.200,000Nil
02Where the gross amount of rent exceeds Rs.200,000 but does not exceed Rs.600,0005% of the gross amount exceeding Rs.200,000
03Where the gross amount of rent exceeds Rs.600,000 but does not exceed Rs.1,000,000Rs.20,000 + 10% of the gross amount exceeding Rs.600,000
04Where the gross amount of rent exceeds Rs.1,000,000 but does not exceed Rs.2,000,000Rs.60,000 + 15% of the gross amount exceeding Rs.1,000,000
05Where the gross amount of rent exceeds Rs.2,000,000 but does not exceed Rs.4,000,000Rs.210,000 + 20% of the gross amount exceeding Rs.2,000,000
06Where the gross amount of rent exceeds Rs.4,000,000 but does not exceed Rs.6,000,000Rs.610,000 + 25% of the gross amount exceeding Rs.4,000,000
07Where the gross amount of rent exceeds Rs.6,000,000 but does not exceed Rs.8,000,000Rs.1,110,000 + 30% of the gross amount exceeding Rs.6,000,000
08Where the gross amount of rent exceeds Rs.8,000,000Rs.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 NoPeriodTax Year 2015Tax Year 2016Tax Year 2017Tax Years 2018 to 2021Tax Year 2022 and onwards
Securities acquired prior 01.07.2016Securities acquired after 01.07.2016
01Where holding period of a security is less than twelve months12.5%15%15%15%15%12.55%
02Where holding period of a security is twelve months or more but less than twenty-four months10%12.5%12.5%12.5%
03Where holding period of a security is twenty-four months or more but the security was acquired on or after 1st July, 20130%7.5%7.5%7.5%
04Where the security was acquired before 1st July, 20130%0%0%0%0%0%
05Future commodity contracts entered into by the members of Pakistan Mercantile Exchange0%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 NoCategoryRate of Tax
01Individual and Association of Persons10% for stock funds10% for other funds
02Company10% for stock funds25% 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 NoPeriodRate of Tax
01Where the gain does not exceed Rs.5 million3.5%
02Where the gain exceeds Rs.5 million but does not exceed Rs.10 million7.5%
03Where the gain exceeds Rs.10 million but does not exceed Rs.15 million10%
04Where the gain exceeds Rs.15 million15%

Table: Capital Gains on Disposal of Immovable Property

CAPITAL GAINS ON DISPOSAL OF IMMOVABLE PROPERTY

Sec. 37(3A)

Serial NoHolding PeriodRate of Tax
01Where the holding period of an immovable property does not exceed one year100%
02Where the holding period of an immovable property exceeds one year75%
03Where the holding period of an immovable property exceeds two years but does not exceed three years50%
04Where the holding period of an immovable property exceeds three years but does not exceed four years25%
05Where the holding period of an immovable property exceeds four years0%

Table: Capital Gains on Disposal of Immovable Property

TAX ON BUILDERS

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

Karachi, Lahore and IslamabadAbbottabad, Faisalabad, Gujranwala, Hyderabad, Mardan, Multan, Peshawar, Quetta, Rawalpindi, Sahiwal and SukkurUrban Areas not specified in A and B
For Commercial Buildings
Rs.210 / Sq FtRs.210 / Sq FtRs.210 / Sq Ft
For Residential Buildings
Area Sq. ftRate Sq. ftArea Sq. ftRate Sq. ftArea Sq. ftRate Sq. ft
Up to 750Rs.20Up to 750Rs.15Up to 750Rs.10
751 to 1500Rs.40751 to 1500Rs.35751 to 1500Rs.25
1501 and moreRs.701501 and moreRs.551501 and moreRs.35

Table: Tax on Builders

TAX ON DEVELOPERS

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

Karachi, Lahore and IslamabadHyderabad, Sukkur, Multan, Faisalabad, Rawalpindi, Gujranwala, Sahiwal, Peshawar, Mardan, Abbottabad and QuettaUrban Areas not specified in A and B
For Commercial Plots
Rs.210 / Sq YdRs.210 / Sq YdRs.210 / Sq Yd
For Residential Plots
Area Sq. YdRate Sq. YdArea Sq. YdRate Sq. YdArea Sq. YdRate Sq. Yd
Up to 120Rs.20Up to 120Rs.15Up to 120Rs.10
121 to 200Rs.40121 to 200Rs.35121 to 200Rs.25
201 and moreRs.70201 and moreRs.55201 and moreRs.35

Table: Tax on Developers

MINIMUM TAX

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

Serial NoPerson(s)Minimum Tax as percentage of the person’s turnover for the year
01Oil 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; andPoultry industry including poultry breeding, broiler production, egg production and poultry feed production.0.75%
02Oil refineries; andMotorcycle dealers registered under the Sales Tax Act, 19900.50%
03Distributors 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; andFlour mills0.25%
04In all other cases1.25%

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

InstallmentQuarterDue Dates
IndividualsAOPs / Companies
01September15th September25th September
02December15th December25th December
03March15th March25th March
04June15th June25th June

Table: Payment of Advance Tax

ADVANCE TAX

Serial NoPerson(s)Rate of Tax
01Industrial 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, 2011Persons importing Gold;Persons importing Cotton; andPersons importing LNG1% of the import value as increased by customs-duty, sales tax and federal excise duty
02Persons importing pulses2% of the import value as increased by customs-duty, sales tax and federal excise duty
03Commercial 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
04Persons importing coal4%
05Persons importing finished pharmaceutical products that are not manufactured otherwise in Pakistan, as certified by the Drug Regulatory Authority of Pakistan4%
06Ship breakers on import of ships4.5%
07Industrial undertakings not covered under S. Nos 01 to 065.5%
08Companies not covered under S. Nos. 01 to 075.5%
09Persons not covered under S. Nos. 01 to 086%

Table: Advance Tax

ADVANCE TAX ON DIVIDEND

Serial NoDescriptionRate of Tax
01In 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%
02Other than mentioned above15%

Table: Advance Tax on Dividend

COLLECTION OF TAX BY A REGISTERED STOCK EXCHANGE IN PAKISTAN

Serial NoDescriptionRate of Tax
01In case of purchase of shares as per clause (a) of sub-section (1) of Section 233A.0.02% of purchase value
02In 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 NoCapacityRate per seat per annum
01Four or more persons but less than ten persons.Rs.50
02Ten or more persons but less than twenty persons.Rs.100
03Twenty persons or more.Rs.300

Table: Collection of Tax on Passenger Transport Vehicles

COLLECTION OF TAX ON TELEPHONE USERS

Serial NoDescriptionRate of Tax
01In the case of a phone subscriber (other than cell phone subscriber) where the amount of monthly bill exceeds Rs.1,00010% of the exceeding amount of bill
02In the case of subscriber of internet, mobile telephones and pre-paid internet or telephone card12.5% 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 NoDescriptionRate of Tax
01Cash 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 NoDescriptionRate of Tax
01The 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 NoDescriptionRate of Tax
01Banking 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 RulesTax on License FeeTax on Renewal
HRs.7,500Rs.10,000
H-1Rs.10,000Rs.15,000
H-2Rs.25,000Rs.30,000
RRs.5,000Rs.12,000
BRs.5,000Rs.40,000
B-1Rs.30,000Rs.35,000
B-2Rs.40,000Rs.45,000
B-3Rs.50,000Rs.75,000
B-4Rs.75,000Rs.100,000
B-5Rs.87,500Rs.150,000
B-6Rs.175,000Rs.200,000
B-7Rs.262,500Rs.300,000
B-8Rs.437,500Rs.500,000
B-9Rs.700,000Rs.800,000
B-10Rs.875,500Rs.900,000

Table: Tax on Cable Television Operator

ADVANCE TAX ON SALE TO DISTRIBUTORS, DEALERS OR WHOLESALERS

Serial NoCategory of SalesRate of Tax
01Fertilizers0.7%
02Other than Fertilizers0.1%

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

ADVANCE TAX ON DEALERS, COMMISSION AGENTS AND ARHATIS, ETC.

Serial NoGroupAmount of Tax
01Group or Class ARs.100,000
02Group or Class BRs.7,5000
03Group or Class CRs.5,0000
04Any Other CategoryRs.5,0000

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

ADVANCE TAX ON PURCHASE OF IMMOVABLE PROPERTY

Serial NoPeriodRate of Tax
01Where the value of immovable property is up to 4 million0%
02Where the value of immovable property is more than 4 million2%

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 NoDescriptionRate of Tax
01The 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 NoType of TicketRate of Tax
01First / Executive ClassRs.16,000 per person
02Others excluding EconomyRs.12,000 per person
03Economy0

Table: Advance Tax on International Air Ticket

ADVANCE TAX ON FUNCTIONS AND GATHERINGS

Serial NoLocationsRate of Tax
01For 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
02For 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 NoType of PremiumRate of Tax
01General insurance premium4%
02Life insurance premium if exceeding Rs. 0.3 million in aggregate per annum1%
03Others0%

Table: Advance Tax on Insurance Premium

ADVANCE TAX ON EXTRACTION OF MINERALS

Serial NoDescriptionRate of Tax
01The 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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