Every year we get asked the same question, about the same time, around when budget season rolls around – “what actually changed?” That’s our own quick summary of the Finance Act 2026-27, in the way we present it to our clients – not a copy of the FBR’s finance bill text, but an actual summary covering the changes which affect tax calculations.
1. Salaried Individuals – Big Change In The Tax Slab
The 9% surcharge withheld from the highest salary earners has been removed for this year – but it does still apply to AOPs and salaried individuals with taxable income of more than Rs. 10 million. For a complete view of the 8 bracket salary tax slab, take a look here.
2. Property Transactions – Fewer Brackets, Lower Rates For Active Filers
236K (purchase) and 236C (sale) tax rates for active filers have been adjusted to have single slab rates of 1.25% and 2.75% respectively – while FCVA/NRVA buyers can claim a 0% purchase rate. The “enhancement schedule” for late filing under the Tenth Schedule has been eliminated. For more on property tax rates, see our Property Tax Rates guide.
3. Sections 7E And CVT Are Both Gone
The deemed rental income tax (Section 7E), and the Capital Value Tax on foreign assets have both been repealed altogether. See our Section 7E repeal guide for more on how this will affect taxpayers with outstanding liabilities from previous years, if any.
4. Super Tax – Less Revenue Than Before, But Higher Threshold
Super Tax under Section 4C now only applies to income streams of more than Rs. 500 million (earlier lower threshold), at a rate of 8% for non-banking companies. Special rules continue to apply to banks, E&P, and fertiliser companies.
5. Capital Gains – Higher Rates For Property & Securities
New rules for capital gains on property acquired on or after 1 July 2024 see this category of income shifted to the Normal Tax Regime, with a maximum rate of 15% for ATL persons. For income from the sale of securities acquired on or after 1 July 2025, the 100% enhanced rate for non-ATL holders has also been reinstated. For details on the holding period schedules for property and securities, see our Capital Gains on Property calculator and Capital Gains on Securities calculator, respectively.
6. Social Media Revenue Tax (Section 154B)
Income from social media has been subjected to a 5% minimum tax – as a final tax for non-residents and a minimum tax for residents.
7. E-Commerce And Exporters Get Some Relief
Withholding under Section 6A is now only final for businesses with a turnover of more than Rs. 200 million – while exporters see a net benefit as the 1% advance tax on exports is repealed, even as withholding under Sections 154/154A increases by 0.25%.
8. Dealing As A Non-Filer Becomes Costly From 1 July 2026
Besides the obvious (higher rates for most income streams), non-filers should now be aware of restrictions on major transactions imposed under Section 114C – and increased withholding on securities, property and services. In short, this Finance Act made it much more expensive to continue being a non-filer – in more ways than one.
9. Other Notable Adjustments
- 236Y withholding has been reduced from 5% to 0.5%
- Withholding tax on foreign TV drama payments (236CA) has been repealed
- Debt securities withholding (151A) increased from 15% to 20%, and now matches the profit-on-debt rate under Section 151
- The concessional minimum tax list (0.5% rate) has seen steel, cement and edible oil delisted – but packaged food, fertiliser, locally-produced mobiles, sugar and electronics retain their concessional status
This is a summary – not a substitute – for a detailed review of your personal or business tax situation, as the Finance Act rarely covers all scenarios in a single document, and there are often exceptions not mentioned in this summary. If any of the above changes are relevant to a transaction or filing you are considering, consult with us on our contact page before proceeding.
FAQs
Does the surcharge removal apply retroactively to previous years?
Generally speaking, new Finance Act changes take effect from the current or following tax year, and not previous ones.
I have a small side-income from content creation – does the social media tax apply to me?
If the income is generated through a social media platform by a resident, a 5% minimum tax applies, so it would be worthwhile to look at whether that particular type of income falls under those guidelines or not.
How often do these kinds of major tax law changes occur?
There is a Finance Act every year (budget), and while some changes are minor, others (like this one) make major overhauls to certain aspects of the tax regime. We usually update our guides every year at this point, rather than trying to maintain a comprehensive single guide.
