Rental Income Tax Calculator Pakistan 2026-27

Calculate tax on residential and commercial rental properties according to current laws.

Property Details
AnnualMonthly
Rs.
Total Annual Rent
Rs 1,200,000
12 Lakh
Total Annual Tax
Rs 75,000
75 Thousand
Effective Tax Rate
6.25%
Rental Income Breakdown
Monthly Gross
Rs 100,000
Monthly Tax
Rs 6,250
Take Home (Monthly)
Rs 93,750
Exempt Income
Rs 300,000

Rental Income Rules in Pakistan

Property income is taxed separately from other heads of income in Pakistan. The following slabs apply for the tax year 2026-27:

  • Up to Rs. 300,000: 0% Tax
  • Rs. 300,001 to Rs. 600,000: 5% of amount over 300k
  • Rs. 600,001 to Rs. 2,000,000: Rs. 15,000 + 10% of amount over 600k
Filer Status Note
Rental income tax slabs are generally fixed regardless of filer status for small property owners, but holding properties as a non-filer may trigger other wealth-related taxes or penalties during property transfer.

How is Rental Income Tax Calculated in Pakistan?

Rental income tax in Pakistan is calculated under the head "Income from Property" in the FBR Income Tax Ordinance 2001. The tax is applied on your total annual gross rent received from all properties combined. FBR uses a progressive slab system — rental income up to Rs. 300,000 annually is fully exempt. Above this threshold, tax applies progressively: 5% on the amount between Rs. 300,001 and Rs. 600,000, then Rs. 15,000 plus 10% on amounts above Rs. 600,000 up to Rs. 2,000,000, and higher rates for larger rental incomes. The calculator above applies these slabs automatically based on your monthly or annual rent input.

Federal Income Tax vs Provincial Property Tax

It is important to understand that two separate taxes apply to property in Pakistan. Federal income tax on rental income — calculated here — is collected by FBR and applies to the rent you receive as income, regardless of whether the property is residential or commercial. Provincial property tax, on the other hand, is a separate levy charged by local government authorities (such as Excise and Taxation departments in Punjab or Sindh) based on the Annual Rental Value (ARV) of the property itself. Both taxes are independent obligations — paying one does not exempt you from the other.

Withholding Tax on Rent — Section 155

Under Section 155 of the Income Tax Ordinance, corporate tenants (companies and registered businesses) are required to deduct 15% withholding tax from rent payments before paying the landlord. This advance tax is not a final tax — it is adjustable against the landlord's annual income tax liability when filing their return. If the total WHT deducted exceeds the landlord's actual annual tax due, the excess can be claimed as a refund through the FBR IRIS portal. Individual tenants (non-corporate) are generally not required to deduct WHT on rent.

Must Landlords Declare Rental Income in Tax Return?

Yes. All rental income must be declared in your annual income tax return filed with FBR, regardless of whether WHT was already deducted by your tenant. FBR has been actively cross-matching rental income data from property registrations, utility connections, and banking records to identify undeclared rental income. Failure to declare rental income can result in FBR audit notices, back-taxes, and penalties. Declaring rental income also helps establish your wealth statement accurately, which is important for filer status and future property transactions.

Source: Rental income tax slabs based on FBR Income Tax Ordinance 2001 as amended by Finance Act 2026. Provincial property tax rates vary by province — refer to your local Excise and Taxation department. This calculator is for informational purposes and does not constitute tax or legal advice.