What is Withholding Tax (WHT)?
Withholding Tax is income tax deducted at source by the payer before making a payment to you — whether it's your employer paying salary, a bank paying profit, or a client paying for services. The deducted amount is deposited to FBR on your behalf and is adjustable against your final tax liability when you file your annual return (except for "final tax" transactions).
Complete WHT Rate Table 2025–26
| Transaction | Section | Filer Rate | Non-Filer Rate |
|---|---|---|---|
| Salary Income | 149 | Per slab (0-35%) | Per slab (0-35%) |
| Contractor/Supplier Payment | 153(1)(a) | 4% | 8% |
| Services Payment | 153(1)(b) | 7-11% | 14-22% |
| Sale of Goods | 153(1)(a) | 4.5% | 9% |
| Rent on Immovable Property | 155 | Per rent slab | Per rent slab |
| Profit on Debt/Bank Profit | 151 | 15% | 30% |
| Dividend (Mutual Fund/Co.) | 150 | 15% | 30% |
| Prize / Lottery / Bond Winnings | 156 | 15% | 25% |
| Brokerage / Commission | 233 | 12% | 24% |
| Import of Goods | 148 | 2-5.5% | 4-11% |
| Export Proceeds (final tax) | 154 | 1% | 1% |
| Property Purchase | 236K | 3% | 6% |
| Property Sale | 236C | 1% | 2% |
| Vehicle Registration (1000-2000cc) | 231B | Rs.10,000-100,000 | Rs.30,000-300,000 |
| Cash Withdrawal (above Rs.50,000/day) | 231A | 0% | 0.6% |
| Electricity Bill (commercial) | 235 | Per slab | Per slab (higher) |
| Phone/Mobile Bill | 236 | 10% | 15% |
| Educational Fee (above Rs.200,000/yr) | 236I | 0% | 5% |
| Foreign Remittance through banking channel | — | Exempt | Exempt |
Final tax vs adjustable tax: Most WHT is "adjustable" — it counts toward your annual tax bill and excess is refundable. But export proceeds (1%), some property transactions, and prize winnings are "final tax" — meaning no further tax is due regardless of your actual income level.
Who Deducts WHT? — Withholding Agents
Any person or entity making specified payments above the threshold is legally required to act as a "withholding agent" — deduct tax, deposit it to FBR within the prescribed time, and file a monthly/quarterly withholding statement (Annex). Common withholding agents include:
- Employers (on salary payments)
- Banks (on profit, cash withdrawal)
- Companies (on supplier/contractor payments)
- Government departments (on contracts)
- Telecom companies (on phone bills)
- Property registrars (on sale/purchase)
Claiming WHT Refund
If the total WHT deducted from your income during the year exceeds your actual tax liability, you can claim a refund when filing your annual return on IRIS. This commonly happens with freelancers (Payoneer/Wise WHT), salaried persons with extra deductions, and businesses with seasonal income.
Frequently Asked Questions
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We handle withholding statements, exemption certificates, and refund claims for businesses across Pakistan.
WhatsApp Now — 0328-4675162Income Tax in Pakistan — Comprehensive 2026-27 Guide
Pakistan's income tax system is governed by the Income Tax Ordinance 2001 (amended through Finance Acts). The tax year runs from July 1 to June 30, and returns are due by September 30. Understanding how income is classified and taxed is essential for every salaried person, business owner, and investor.
Tax Slabs 2026-27 — Salaried Individuals
| Annual Taxable Income | Tax Rate |
|---|---|
| Up to Rs.600,000 | 0% |
| Rs.600,001 to Rs.1,200,000 | 2.5% of amount exceeding Rs.600,000 |
| Rs.1,200,001 to Rs.2,200,000 | Rs.15,000 plus 12.5% exceeding Rs.1,200,000 |
| Rs.2,200,001 to Rs.3,200,000 | Rs.140,000 plus 20% exceeding Rs.2,200,000 |
| Rs.3,200,001 to Rs.4,100,000 | Rs.340,000 plus 25% exceeding Rs.3,200,000 |
| Rs.4,100,001 to Rs.6,000,000 | Rs.565,000 plus 32.5% exceeding Rs.4,100,000 |
| Above Rs.6,000,000 | Rs.1,182,500 plus 35% exceeding Rs.6,000,000 |
Tax Exemptions and Deductions Available
- Zakat paid through official channels — fully deductible
- Donations to approved NPOs/NGOs — up to 30% of taxable income
- Medical allowance — exempt up to 10% of basic salary (if not on medical scheme)
- Life insurance premium — 100% deductible (if eligible plan)
- Pension contributions — deductible under Section 60
Tax Credits That Reduce Your Tax Bill
Unlike deductions (which reduce income), tax credits reduce the tax itself:
- Section 62 — Investment in shares/equity mutual funds: credit up to Rs.150,000
- Section 63 — Contribution to approved pension fund: up to 20% of income for under-40s
- Section 64 — Premium on life insurance / health insurance: deductible
How to File Your Income Tax Return
- Login to IRIS (iris.fbr.gov.pk) with your NTN and password
- Select the relevant tax year from the Returns menu
- Enter income details across all categories (salary, business, property, capital gains)
- Complete wealth statement (assets and liabilities as of June 30)
- Review tax computation and pay any balance due via CPR challan
- Submit and save your acknowledgment receipt
Kamboh Associates provides end-to-end income tax return filing filing. Call 0328-4675162 for same-day filing service.
Frequently Asked Questions — Income Tax Pakistan 2026
Who is required to file an income tax return in Pakistan?
Under Section 114 of the Income Tax Ordinance, you must file a return if: your income exceeds Rs.600,000 in a year; you own immovable property with an area of 500 square yards or more; you own a motor vehicle with engine capacity of 1000cc or above; you have obtained a commercial or industrial electricity connection; you are registered for sales tax; or you have received a prize bond prize above Rs.10,000. Even if none of these apply, filing a return helps you get on the ATL and reduces withholding taxes.
What is the deadline to file income tax return in Pakistan for 2026?
For individuals (salaried and business), the deadline to file the income tax return for tax year 2026 (July 2025 – June 2026) is September 30, 2026. For companies (AOPs, SECP company registration), the deadline is December 31, 2026. These deadlines can be extended by FBR notification. Late filing after the deadline attracts a penalty of Rs.1,000 per month (individual) or Rs.10,000 per month (company) plus 0.1% of tax per day.
Can I file my own income tax return on IRIS without a consultant?
Yes. FBR's IRIS portal allows individuals to file returns themselves. The process involves: creating an account at iris.fbr.gov.pk using your CNIC, completing the income return form (declaring all income sources), filling in the wealth statement preparation (all assets and liabilities), computing tax, paying via 1-Bill or bank challan if any tax is due, and submitting. However, if you have multiple income sources, foreign assets, business income, or have received notices, professional help is strongly recommended to avoid errors.
What is the wealth statement and who must file it?
The wealth statement (filed under Section 116) is a declaration of all your assets and liabilities as of June 30 of the tax year. Everyone who files a return must also file the wealth statement. It includes: property (residential, commercial, agricultural), vehicles, bank balances, investments, business capital, cash in hand, jewelry, and all liabilities (loans, mortgages). The difference between opening and closing wealth should be explainable by your declared income minus living expenses. Unexplained increases trigger notices under Section 111.
How can I reduce my income tax legally in Pakistan?
Legal tax reduction strategies include: investing in approved pension funds (up to 20% of income deductible under Section 63); investing in equity mutual funds or shares listed on PSX (tax credit up to Rs.150,000 under Section 62); paying health/life insurance premiums (deductible under Section 62); making charitable donations to FBR-approved organizations (up to 30% deductible); paying Zakat through official channels (directly deductible from tax); and claiming all legitimate business expenses if self-employed. These strategies can legally reduce your tax bill by Rs.50,000-Rs.300,000 depending on income level.
File Your Income Tax Return — Same Day Service
Kamboh Associates files income tax returns for salaried individuals, freelancers, business owners, and companies. Professional filing starts at Rs.3,000.
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