Withholding tax (WHT) is the most common form of tax collection in Pakistan — deducted at source from payments before the recipient gets them. This complete guide covers WHT rates for 2026, who deducts it, how to claim credit, and how being a filer saves you money on every transaction.

What is Withholding Tax in Pakistan?

Withholding tax is an advance collection mechanism under the Income Tax Ordinance 2001 where a person making a payment (the withholding agent) deducts tax at a specified rate before handing over the amount to the recipient. The recipient can then adjust this WHT against their final annual tax liability when filing their return.

Pakistan has one of the most extensive WHT systems in the world — covering over 60 different payment types under Sections 148 to 236U of the ITO 2001.

Filer vs Non-Filer WHT Rates — Key Comparison 2026

SectionTransactionFiler RateNon-Filer Rate
231ACash withdrawal above Rs. 50,000/day0%0.6%
151Bank profit / savings interest15%30%
150Dividend from company15%30%
236CSale of immovable property3%6%
236KPurchase of immovable property3%6%
231BVehicle registration (1001–1800cc)Rs. 25,000Rs. 75,000
148Imports (commercial)2.5–5.5%Up to 9%
156Prize bond / lottery winnings above Rs. 40,00015%25%
233Commission income12%15%
236ASale of goods by auction10%12%
153(1)(a)Sale of goods (by company)4%8%
153(1)(b)Rendering of services8%16%
155Rent of immovable property15%30%

Who is a Withholding Agent in Pakistan?

A withholding agent is any person required by law to deduct WHT before making a payment. This includes:

If you are a withholding agent, you must deduct WHT, deposit it to FBR by the 15th of the following month, and file a monthly WHT statement (Form 165) by the 15th.

How to Claim WHT Credit in Your Tax Return

Every WHT deducted from your income is a prepaid tax that you can adjust against your final annual tax liability:

  1. Collect WHT certificates from every deductor (bank, employer, buyer, etc.)
  2. Enter each WHT amount in the Tax Already Paid section of your IRIS return
  3. IRIS calculates: Final Tax Liability minus Total WHT Paid = Balance payable or refundable
  4. If WHT exceeds your final liability, claim a refund under Section 170

Adjustable vs Final WHT in Pakistan

Not all WHT is creditable against your annual tax:

WHT TypeExamplesAdjustable?
Adjustable WHTSalary WHT, bank profit WHT, rent WHT, commission WHTYes — credit against annual tax
Final WHT (minimum tax)WHT on imports (Section 148), WHT on sale of goods (153), certain dividend WHTNo — this is the final tax, no further liability
Fixed taxVehicle registration WHT (Section 231B)No — fixed amount, not refundable

Frequently Asked Questions

Can I get a refund if too much WHT was deducted?
Yes, if your total adjustable WHT paid exceeds your final income tax liability calculated in your annual return, the excess is refundable. File your return, and if a refund is due, apply to the Commissioner via IRIS. Refunds are typically processed within 3–6 months.
What if my employer deducted wrong WHT from salary?
The employer's WHT deduction is reflected in your annual return. If it was too high, you receive a refund when you file. If too low, you must pay the shortfall. Always verify your employer's tax certificate (Form 16) against your actual salary before filing your return.
Is WHT on bank profit the final tax or can I get it back?
Bank profit WHT under Section 151 is an adjustable advance tax for filers — you can credit it against your annual tax and claim a refund if excess. For non-filers, it becomes a final tax at 30% — no refund, no credit. This is why becoming a filer significantly reduces effective bank tax.

Questions About Withholding Tax in Pakistan?

Kamboh Associates helps businesses comply with WHT deduction and filing obligations, and helps individuals claim WHT refunds in their annual returns. WhatsApp us for a free consultation.