What changed at a glance
Federal outlay
PKR 19.278T
FY 2025–26
PKR 18.771T
FY 2026–27
−2.6%FBR revenue target
PKR 14.131T
FY 2025–26
PKR 15.264T
FY 2026–27
+8.0%Fiscal deficit
3.9% of GDP
FY 2025–26
3.6% of GDP
FY 2026–27
—Defence services
PKR 2.55T
FY 2025–26
PKR 3.00T
FY 2026–27
+17.6%Who benefits — and who pays more?
Who benefits
- Salaried income from PKR 2.2M–7M
- Property buyers and sellers
- PSEB-registered IT exporters
- Most persons below PKR 500M super-tax threshold
Who pays more
- Social-media receipts: new 5% WHT
- Specified distributors: minimum tax 0.5%
- Luxury imported EVs and vehicles
- E-liquid FED: PKR 16,500/kg
Salary tax: the biggest personal impact
FY 2025–26
Annual tax
PKR 466,000
FY 2026–27
Annual tax
PKR 416,000
You save
PKR 50,000
/ year
| Annual taxable income slab | FY 2025–26 rate | FY 2026–27 rate | Change |
|---|---|---|---|
| Up to PKR 600,000 | 0% | 0% | — |
| PKR 2.2M–3.2M | 23% | 20% | −3 pp |
| PKR 3.2M–4.1M | 30% | 25% | −5 pp |
| PKR 4.1M–5.6M | 35% | 29% | −6 pp |
| Above PKR 7M | 35% | 35% | — |
Budget impact by sector
Freelancers & IT
- 0.25% PSEB rate extended to Tax Year 2029
- Export collection: 1.25%
- Foreign-card WHT: 0.5%
Business & super tax
- 0% for most persons up to PKR 500M
- 8% above PKR 500M
- Banks, E&P and fertiliser remain at 10%
Property
- Section 7E repealed
- Sale WHT: 2.75%
- Purchase WHT: 1.25%
Vehicles
- Imported EV FED: 0% / 30% / 40% by USD value
- Imported 2000cc+ vehicles: new special duty
- ICT ≤1000cc: PKR 20,000 lifetime
Solar
- 10% sales tax continues
- No new Finance Act 2026 increase
Defence
- PKR 3.00T defence services
- PKR 822B military pensions, separate
- PKR 925.8B physical assets
Frequently asked questions
When do these budget changes take effect?
The Finance Act 2026 received assent on 26 June 2026. Its income-tax and budget measures generally apply from 1 July 2026 for FY 2026-27, subject to the commencement wording of each provision.
Who should file an income tax return under the new rules?
The Finance Act changes rates and some treatments, but filing depends on the Income Tax Ordinance requirements for your income, assets, registration and other circumstances. Check current FBR rules or obtain professional advice for your filing position.
How do I calculate my salary tax under the new slabs?
Apply the FY 2026-27 progressive salaried rates to annual taxable salary: 0% up to PKR 600,000, then marginal rates of 1%, 11%, 20%, 25%, 29%, 32% and 35%. Use the salary calculator for an automatic annual and monthly estimate.
Where can I find the official budget documents?
Use the official Finance Act 2026 and Salient Features published by FBR, together with the Budget in Brief and Annual Budget Statement published by the Finance Division. The source links on this page go directly to those documents.
What are the main enacted changes in Budget 2026-27?
The enacted changes include lower middle-income salary rates and abolition of the salaried surcharge, repeal of Section 7E, lower property transfer withholding, extension of the 0.25% PSEB export rate, super-tax relief for most persons up to PKR 500 million, new social-media withholding, revised vehicle levies and a PKR 3 trillion defence-services allocation.
Do freelancers and IT exporters get tax relief?
The 0.25% rate for qualifying PSEB-registered IT and IT-enabled services exporters is extended through Tax Year 2029. The general ATL collection rate under Section 154A remains 1%, while non-ATL rates remain higher.
What property tax changes were enacted?
Section 7E was omitted. For ATL persons, advance tax on property sales under Section 236C is 2.75% and advance tax on purchases under Section 236K is 1.25%. The late-filer property category was also removed.
What is Pakistan's defence budget for FY 2026-27?
The FY 2026-27 budget estimates allocate PKR 3 trillion to defence services, up from PKR 2.55 trillion. Military pensions are budgeted separately at PKR 822 billion and are not included in the PKR 3 trillion figure.
