FBR Income Tax Slabs Pakistan 2026-27 — Salaried & Business Rates
Updated per Finance Act 2026 (FY July 2026 – June 2027). Rates cut 3–6 percentage points across all brackets. Use our Tax Calculator to compute your exact liability.
Rs. 600K/yr
Tax-Free Limit
Rs. 50K/month
35%
Salaried Max Rate
On income > Rs. 7M (FY 2026-27)
45%
Business Max Rate
On income > Rs. 5.6M
0.25%
Freelancer Rate
IT exports extended to 2030
Salaried Individuals — Tax Slabs FY 2026-27
Applicable to employees receiving salary income (Section 149 withholding applies). Source: Finance Act 2026 (Budget 2026-27), effective July 1, 2026.
| Annual Income (PKR) | Monthly Equivalent | Rate | Tax Payable |
|---|---|---|---|
| Rs. 0 – Rs. 600K | Rs. 0 – Rs. 50K | 0% | Nil |
| Rs. 600K – Rs. 1.2M | Rs. 50K – Rs. 100K | 1% | 1% on income exceeding Rs. 600,000 (max Rs. 6,000) |
| Rs. 1.2M – Rs. 2.2M | Rs. 100K – Rs. 183K | 11% | Rs. 6,000 + 11% on excess over Rs. 1,200,000 |
| Rs. 2.2M – Rs. 3.2M | Rs. 183K – Rs. 267K | 20% | Rs. 116,000 + 20% on excess over Rs. 2,200,000 |
| Rs. 3.2M – Rs. 4.1M | Rs. 267K – Rs. 342K | 25% | Rs. 316,000 + 25% on excess over Rs. 3,200,000 |
| Rs. 4.1M – Rs. 5.6M | Rs. 342K – Rs. 467K | 29% | Rs. 541,000 + 29% on excess over Rs. 4,100,000 |
| Rs. 5.6M – Rs. 7M | Rs. 467K – Rs. 583K | 32% | Rs. 976,000 + 32% on excess over Rs. 5,600,000 |
| Rs. 7.0M – Above | Rs. 583K – + | 35% | Rs. 1,424,000 + 35% on excess over Rs. 7,000,000 |
Business / Self-Employment Income — Tax Slabs FY 2026-27
Applies to sole proprietors, freelancers (non-IT), partnerships, and individuals with business income. Also applicable to AOPs (Association of Persons).
| Annual Income (PKR) | Rate | Tax Payable |
|---|---|---|
| Rs. 0 – Rs. 600K | 0% | Nil |
| Rs. 600K – Rs. 1.2M | 15% | 15% on income exceeding Rs. 600,000 |
| Rs. 1.2M – Rs. 1.6M | 20% | Rs. 90,000 + 20% on excess over Rs. 1,200,000 |
| Rs. 1.6M – Rs. 3.2M | 30% | Rs. 170,000 + 30% on excess over Rs. 1,600,000 |
| Rs. 3.2M – Rs. 5.6M | 40% | Rs. 650,000 + 40% on excess over Rs. 3,200,000 |
| Rs. 5.6M – Above | 45% | Rs. 1,610,000 + 45% on excess over Rs. 5,600,000 |
Special Tax Rates & Categories
IT Freelancers / IT Exporters (Digital Nation Act 2024)
0.25% Final Tax on foreign currency export receipts
Eligible if income is received in foreign exchange via SBP-approved channels. Registration with PSEB/FBR required. Applies to software, IT services, BPO, and freelance platform income.
Dividend Income
15% final tax (withholding)
Dividends from listed companies are subject to 15% withholding tax at source (final tax). From non-listed companies: 25%. Filer status reduces rates.
Non-Filer Penalty (Surcharge)
+5% additional tax on most transactions
Non-filers pay higher WHT on bank transactions, property purchases, vehicle registration, and other activities. Filing an income tax return eliminates these surcharges even if no tax is owed.
Super Tax (High Earners) — Restructured in Budget 2026-27
Abolished for Rs. 150M–500M; 8% on income above Rs. 500M
Finance Act 2026 abolished super tax for income between Rs. 150M–500M and reduced the top rate to 8% (from 10%) for income above Rs. 500M. Completely abolished for exporters. Most individual and small business taxpayers are not affected.
Historical Tax Threshold Comparison
| Tax Year | Exempt Limit | Top Rate | Note |
|---|---|---|---|
| 2022-23 | Rs. 600K | 35% (salaried) | Finance Act 2022 |
| 2023-24 | Rs. 600K | 35% (salaried) | Finance Act 2023 |
| 2024-25 | Rs. 600K | 35% (salaried) | Finance Act 2024 — super tax introduced |
| 2025-26 | Rs. 600K | 35% (salaried) / 45% (business) | Finance Act 2025 — Digital Nation Act credits added |
| 2026-27 | Rs. 600K | 35% on income >Rs. 7M (salaried) | Finance Act 2026 — rates cut 3–6 pp; 9% surcharge abolished; 8 slabs |
Frequently Asked Questions
What is the income tax exemption limit in Pakistan for 2026-27?
Income up to Rs. 600,000 per year (Rs. 50,000/month) remains completely exempt from income tax for both salaried and business income earners — unchanged from previous years.
How do freelancers pay taxes in Pakistan?
IT freelancers registered under the Digital Nation Act 2024 pay only 0.25% final tax on foreign currency income received via SBP-approved channels. Non-IT freelancers pay under the regular business income schedule (up to 45%). You must file an annual return by September 30.
What happens if I don't file an income tax return in Pakistan?
Non-filers face higher withholding tax rates on bank transactions (extra 2%), property purchases (doubled rate), vehicle registration (higher fee), and more. Even if your income is below the taxable limit, filing a nil return removes non-filer surcharges and is strongly recommended.
Is rental income taxable in Pakistan?
Yes. Rental income is taxed at 15% for resident individuals (as a separate block). For non-residents, it's taxed at 15% withholding (final tax). The tenant is responsible for withholding and depositing 15% to FBR if the landlord is an individual.
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