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Pakistan Income Tax Information 2025-2026
Complete guide to income tax rates and regulations as per Federal Board of Revenue (FBR)
About Pakistan Income Tax
The Federal Board of Revenue (FBR) of Pakistan administers income tax under the Income Tax Ordinance, 2001. The tax year runs from July 1 to June 30, and tax rates are updated annually through the Finance Act.
- Tax Year 2025-26: July 1, 2025 to June 30, 2026
- Filing Deadline: September 30 for individuals
- Tax Relief: Significant relief for middle-income earners
- Exemption Limit: PKR 600,000 for salaried individuals
Taxpayer Categories
Pakistani income tax law categorizes taxpayers into different groups with varying tax rates:
- Salaried Individuals: Lower tax rates with relief measures
- Non-Salaried Individuals: Higher rates for business income
- Association of Persons (AOP): Standard business rates
- Professional Firms: Capped at 40% maximum rate
- Companies: Corporate tax rates (29% standard)
Detailed Tax Slabs for Tax Year 2025-2026
Salaried Individuals
Applicable to individuals whose salary income is 75% or more of their total income.
| Income Range (PKR) | Tax Rate | Fixed Tax (PKR) | Rate on Excess |
|---|---|---|---|
| Up to 600,000 | 0% | 0 | Tax Free |
| 600,001 to 1,200,000 | 2.5% | 0 | 2.5% on amount exceeding 600,000 |
| 1,200,001 to 2,200,000 | 11% | 15,000 | 11% on amount exceeding 1,200,000 |
| 2,200,001 to 3,200,000 | 23% | 125,000 | 23% on amount exceeding 2,200,000 |
| 3,200,001 to 4,100,000 | 30% | 355,000 | 30% on amount exceeding 3,200,000 |
| Above 4,100,000 | 35% | 625,000 | 35% on amount exceeding 4,100,000 |
Non-Salaried Individuals & AOP
Applicable to individuals with business income, self-employed persons, and Association of Persons.
| Income Range (PKR) | Tax Rate | Fixed Tax (PKR) | Rate on Excess |
|---|---|---|---|
| Up to 600,000 | 0% | 0 | Tax Free |
| 600,001 to 1,200,000 | 7.5% | 0 | 7.5% on amount exceeding 600,000 |
| 1,200,001 to 1,600,000 | 15% | 45,000 | 15% on amount exceeding 1,200,000 |
| 1,600,001 to 3,200,000 | 25% | 105,000 | 25% on amount exceeding 1,600,000 |
| 3,200,001 to 5,600,000 | 35% | 505,000 | 35% on amount exceeding 3,200,000 |
| Above 5,600,000 | 45% | 1,345,000 | 45% on amount exceeding 5,600,000 |
Special Provisions & Additional Information
Surcharge
A surcharge of 10% is applicable on tax payable where taxable income exceeds PKR 10,000,000.
Professional AOP
Professional firms (AOP) have a maximum tax rate of 40% instead of 45% for the highest income bracket.
Small Companies
Simplified 20% tax rate on taxable income for qualifying small companies with specific turnover criteria.
Tax Relief 2025-26
Significant relief for salaried individuals, particularly in middle-income brackets compared to previous years.
Important Notes
- Advance Tax: Applicable based on previous year's tax liability or current year's income estimates.
- Withholding Tax: Various rates apply on different transactions and payments.
- Final Tax Regime: Some incomes are subject to final withholding tax rates.
- Filing Requirements: Mandatory filing for individuals with taxable income above exemption limit.
- Late Filing Penalty: Penalties apply for late submission of tax returns.
- Professional Advice: Consult tax professionals for complex situations and business income calculations.
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