Pakistan Rental Income Tax Calculator 2026-27

For a filer, nothing is taken out of the first Rs. 300,000 of yearly rent. Above that it is 5% of the rent over Rs. 300,000 up to Rs. 600,000; Rs. 15,000 plus 10% of the rent over Rs. 600,000 up to Rs. 2,000,000; and Rs. 155,000 plus 25% of the rent over Rs. 2,000,000. So Rs. 1,200,000 of yearly rent means Rs. 75,000 is taken out. Non-filers pay double these amounts.

It is not final. The amount your tenant takes out counts towards the total tax you owe for the year. When you file your yearly return you claim it as tax already paid — if your final tax is lower you get the difference back as a refund, and if it is higher you pay the balance.

Section 155 of the Income Tax Ordinance 2001 is the rule that makes a tenant take tax out of the rent and pay it to the FBR in the owner’s name. It covers rent for land and buildings, including rent for furniture and fittings and money charged for services tied to the property.

Double. Rule 1 of the Tenth Schedule increases the rate by 100% for anyone not on the FBR Active Taxpayer List, so a filer paying Rs. 75,000 on Rs. 1,200,000 of rent would have Rs. 150,000 taken out as a non-filer. This has applied to rent since 2022-23. In 2021-22 rent was left out of that rule, so both statuses paid the same.

A company pays a flat 15% of the gross rent if it is on the Active Taxpayer List, and 30% if it is not. There are no steps and no tax-free amount, so the rate applies from the first rupee of rent.

Not always. A private person or family renting from you only has to deduct once they pay Rs. 1,500,000 or more of rent in a year. Companies, federal and provincial government bodies, local councils, non-profits, foreign missions, private schools, hospitals, clinics, beauty parlours and boutiques must deduct from the first rupee.

A repairs allowance of one-fifth (20%) of the rent with no receipts needed, plus property tax and local rates, building insurance, ground rent, interest on money borrowed for the property, up to 4% of rent for collection and running costs, legal fees defending your ownership, and rent a tenant never paid. These lower your final tax, not the amount your tenant takes out.

Your tenant takes nothing out of yearly rent up to Rs. 300,000 if you own the property yourself or with others. That is only about the deduction, though — the rent still counts as your income, so include it in your yearly return along with everything else you earn.

Tax years 2021-22 through 2026-27. The rate steps have not changed across those years, and the Finance Act 2026 left them alone for 2026-27. What did change is the extra charge for non-filers, which started applying to rent in 2022-23.

Add up the rent from all your properties for the year to see the total picture, since the steps apply to your rent as a whole. If you own a property with someone else, each owner is taxed on their own share of the rent, so enter only your share.