Every year we get the same question around budget season: “what actually changed?” Here’s our own working summary of the Finance Act 2026-27, organized the way we actually explain it to clients — not a copy of the FBR‘s finance bill text, just the changes that matter in practice.
1. Salaried Individuals — Biggest Win This Year
The 9% surcharge that used to apply to high-earning salaried individuals has been withdrawn. It still applies to AOPs and non-salaried individuals with taxable income above Rs. 10 million, but if you’re on payroll, you no longer pay it. See our full Salary Tax Slabs guide for the current 8-bracket table.
2. Property Transactions — Simplified and Flattened
Sections 236K (purchase) and 236C (sale) moved from multi-tier slabs to single flat rates: 1.25% on purchase and 2.75% on sale for active filers, with a 0% purchase rate available to FCVA/NRVA-funded buyers. The old “late-filer enhancement” schedule under the Tenth Schedule was scrapped. Full detail in our Property Tax Rates guide.
3. Section 7E and CVT — Both Repealed
The deemed-rental-income tax on property (Section 7E) and Capital Value Tax on foreign assets have both been omitted from the Ordinance. See our dedicated Section 7E repeal post for what this means if you have prior-year liabilities.
4. Super Tax — Eased, But Narrower Trigger
Super Tax under Section 4C now applies only where taxable income exceeds Rs. 500 million (up from lower thresholds), at 8% for non-bank companies. Banks, E&P companies, and fertiliser manufacturers remain on a separate, higher schedule.
5. Capital Gains — Property and Securities
Property acquired on or after 1 July 2024 is now taxed under the Normal Tax Regime, capped at 15% for ATL persons — a shift from the old flat holding-period schedule for newer acquisitions. For securities acquired on or after 1 July 2025, the 100% enhanced rate for non-ATL holders has been restored. See our Capital Gains on Property and Capital Gains on Securities calculators for the full holding-period tables.
6. New: Social Media Revenue Tax (Section 154B)
A new 5% tax on social media revenue was introduced — a minimum tax for residents, final tax for non-residents. This is directly relevant if you earn from content creation, sponsorships, or platform monetization.
7. E-Commerce and Exports
E-commerce withholding under Section 6A is now adjustable (not final) for businesses with turnover above Rs. 200 million. Exporters benefit from a net saving as the 1% advance tax on exports was removed while withholding under Sections 154/154A rose only 0.25%.
8. Non-Filer Restrictions — Effective 1 July 2026
Beyond rate differences, non-filers now face activity restrictions under Section 114C on certain major transactions, plus enhanced withholding on securities, property, and services. If you’ve been putting off filing, this Finance Act made the cost of staying a non-filer materially higher, not just in tax rate but in what you’re able to do.
9. Miscellaneous Changes Worth Knowing
- Section 236Y withholding cut from 5% to 0.5%.
- Withholding tax on foreign TV drama payments (Section 236CA) abolished.
- Debt securities withholding (Section 151A) raised from 15% to 20%, aligning it with the profit-on-debt rate under Section 151.
- Minimum tax concessional list (0.5% rate) dropped cement, steel, and edible oil, while keeping packaged food, fertiliser, locally-made mobiles, sugar, and electronics.
This is a working summary, not a substitute for checking your specific situation — Finance Acts have exceptions and transitional provisions that don’t always show up in a general summary like this one. If any of the above affects a transaction or filing you’re planning, get in touch via our contact page before you commit to anything.
FAQs
Does the surcharge removal apply retroactively to prior tax years?
No — Finance Act changes generally apply from the tax year specified in the Act going forward, not retroactively to years already filed.
I run a small content-creation side income — does the Section 154B social media tax apply to me?
If you’re earning revenue from platform monetization, sponsorships, or similar social media income as a resident, the 5% minimum tax likely applies — worth having this checked against your specific income structure rather than assuming either way.
How often does this kind of major tax law change happen?
Every Finance Act (annual, tied to the federal budget) makes changes, but the scale varies — some years are minor rate adjustments, others (like this one) restructure entire tax categories. We update our relevant guides each year rather than maintaining one static page indefinitely.
