If you rent out a house, shop, or office in Pakistan, the tenant is required by law to deduct tax before handing over your rent. This rent withholding tax calculator works out exactly how much withholding tax applies to your rental income under Section 155 of the Income Tax Ordinance, 2001, using the Finance Act 2026 rates for Tax Year 2026-27. Enter your monthly or annual rent, pick your filer status, and get an instant breakdown of what gets deducted and what lands in your account.
Quick Answer
Individual landlords pay nothing on rent up to Rs. 300,000 a year. Above that, tax rises in slabs from 5% to 25% for filers — and doubles at every slab for non-filers. Companies pay a flat 15% (filer) or 30% (non-filer) on the full rent amount, with no exempt threshold.
✓ Section 155 Compliant
✓ Filer & Non-Filer Rates
✓ Individual & Company Rates
What Is Rent Tax in Pakistan?
Rent tax — more formally, withholding tax on income from property — is the advance tax that a tenant deducts at source before paying rent to a landlord. It's governed by Section 155 of the Income Tax Ordinance, 2001, and collected by the Federal Board of Revenue (FBR) to bring rental income into the documented tax net as it's earned, rather than waiting until the annual return is filed.
This is different from income tax on rent under Section 15, which is calculated on your net rental income (after deductions) when you file your yearly return. The Section 155 deduction is an advance tax — it's credited against whatever you eventually owe under Section 15, and any excess is refundable. Our rental withholding tax calculator focuses specifically on this Section 155 deduction, since it's the amount that actually gets withheld from each rent payment.
How the Rent Tax Calculator Works
Getting an accurate number from this property rent tax calculator Pakistan landlords and tenants both rely on takes four simple steps.
Choose Rent Period
Select whether you're entering a monthly or annual rent figure. The calculator converts monthly rent into an annual total automatically.
Select Taxpayer Type
Pick Individual/AOP or Company. Companies are taxed at a flat rate regardless of the rent amount, while individuals use progressive slabs.
Confirm Filer Status
Choose Active Filer (on the FBR Active Taxpayer List) or Non-Filer. Non-filer rates are exactly double the filer rate at every level.
Review Your Result
See your total withholding tax, net rent after tax, and the exact slab or rate applied — instantly, with no sign-up required.
FBR Rent Tax Slabs for Tax Year 2026-27
Under the Finance Act 2026, the rent tax slabs Pakistan uses for individual and AOP landlords stayed on the same progressive structure introduced in recent years. Here's the full breakdown of Income Tax Ordinance 2001 Section 155 rates currently in force:
| Annual Rent (PKR) | Filer Rate | Non-Filer Rate |
|---|---|---|
| Up to 300,000 | Nil (0%) | Nil (0%) |
| 300,001 – 600,000 | 5% of amount above 300,000 | 10% of amount above 300,000 |
| 600,001 – 2,000,000 | 15,000 + 10% of amount above 600,000 | 30,000 + 20% of amount above 600,000 |
| Above 2,000,000 | 155,000 + 25% of amount above 2,000,000 | 310,000 + 50% of amount above 2,000,000 |
Companies paying rent don't get the exempt threshold that individuals enjoy — the flat rate applies to the very first rupee of rent:
| Entity Type | Filer (On ATL) | Non-Filer (Not on ATL) |
|---|---|---|
| Company | 15% flat on gross rent | 30% flat on gross rent |
This corporate rent tax rate — 15% for filers, 30% for non-filers — is what the Income Tax Ordinance and current FBR guidance both specify for companies. If you've seen a different company rate quoted elsewhere, treat 15%/30% as the figure to rely on for TY 2026-27, since it's consistent across the FBR withholding tax rate card and every major tax reference we cross-checked while updating this calculator.
Filer vs Non-Filer Rent Tax — Why It Matters
The gap between filer and non-filer rent tax is one of the biggest costs of staying off the Active Taxpayer List. At every slab, non-filers pay exactly double what filers pay — this isn't a rounding difference, it's a deliberate 100% penalty rate built into the Tenth Schedule of the Ordinance.
Filer Advantage
An active filer on the ATL keeps significantly more of their rental income at every income level, and the gap widens as rent increases.
Non-Filer Penalty
Non-filers face a flat 100% surcharge on the standard rate — the same rule applies across most FBR withholding provisions, not just rent.
Easy Fix
Filer status is checked on the date of each rent payment. Registering for a National Tax Number and filing your last return is usually enough to appear on the ATL.
Here's a simple visual comparison of the tax burden at Rs. 1,200,000 in annual rent (an individual landlord):
Worked Examples With PKR Amounts
Numbers make more sense with real rent figures. Here's how the rental income tax calculator Pakistan landlords use most often applies to three common scenarios.
| Scenario | Annual Rent | Filer Tax | Non-Filer Tax |
|---|---|---|---|
| Small apartment, Rs. 35,000/month | Rs. 420,000 | Rs. 6,000 | Rs. 12,000 |
| Mid-size house, Rs. 100,000/month | Rs. 1,200,000 | Rs. 75,000 | Rs. 150,000 |
| Commercial shop, Rs. 250,000/month | Rs. 3,000,000 | Rs. 405,000 | Rs. 810,000 |
Take the mid-size house example: at Rs. 1,200,000 a year, the taxable slab is "600,001 – 2,000,000," so a filer owes Rs. 15,000 plus 10% of the Rs. 600,000 that exceeds the threshold — Rs. 15,000 + Rs. 60,000 = Rs. 75,000 for the year, or about Rs. 6,250 deducted from each monthly payment. A non-filer landlord on the same rent hands over Rs. 150,000 annually instead, purely because of ATL status.
Allowable Deductions Under Section 15A
The Section 155 withholding tax is calculated on gross rent, but that's not the final story. When you file your annual return, your actual taxable rental income under Section 15 can be reduced through allowable deductions:
- Repair allowance — up to 20% of gross rent, applied automatically without needing receipts
- Property tax paid to local or provincial authorities
- Insurance premium on the rented building
- Interest on a loan taken to purchase or construct the property
- Ground rent and legal/administration charges tied to collecting the rent
- Irrecoverable rent that was never actually received from a tenant
These deductions lower your net taxable rent for the annual return, but they don't change how much the tenant withholds under Section 155 during the year — that part is always based on gross rent. Any advance tax already deducted becomes a tax credit adjustment on rent once you file.
Who Deducts the Tax — Tenant or Landlord?
The tenant deducts tax at source, not the landlord. Specifically, the obligation falls on "prescribed persons" — companies, government departments, and individuals or AOPs who meet certain income or turnover thresholds. If a tenant fails to deduct, they become personally liable for the tax plus penalties, so most organised tenants (offices, corporate landlords, registered firms) are careful about it.
For smaller landlord-tenant arrangements where the tenant isn't a prescribed person, the withholding step may not apply in practice — but the landlord still owes tax on the rental income when filing under Section 15.
Payment Deadline, Challan 2806 & TR-6 Certificate
Deposit Deadline
Tax withheld from rent must reach the FBR by the 15th of the month following the deduction — for example, tax on January's rent is due by February 15.
Challan 2806
Tenants use Challan 2806 to deposit the withheld amount at any authorised bank, then file a monthly withholding statement with FBR.
TR-6 Certificate
The tenant should issue a TR-6 certificate to the landlord confirming how much was deducted — this becomes the landlord's proof for claiming the tax credit later.
Common Mistakes to Avoid
A few recurring errors show up again and again when Pakistani landlords deal with rent tax:
- Assuming rent under Rs. 300,000 never needs declaring. The threshold only exempts you from withholding — the income should still appear on your return.
- Mixing rental income with salary or business income on the same slab when filing, instead of treating it under its own head.
- Forgetting the repair allowance — many landlords pay more tax than necessary by skipping the automatic 20% deduction.
- Confusing filer status on the payment date with filer status at year-end — FBR checks ATL status at the time each rent payment is made.
- Not requesting a TR-6 certificate, which makes it harder to prove the advance tax credit later.
Rent Tax Pakistan 2026-27 vs 2025-26 — What Changed
For Tax Year 2026-27, the individual and AOP slab structure for Section 155 carried over largely unchanged from the prior year, with the Finance Act 2026 confirming the same Nil / 5% / 10% / 25% progression. What's worth double-checking each budget cycle is the company rate and any provincial add-ons — for instance, some provinces have floated additional GST-style levies on commercial rented property on top of the federal Section 155 deduction. If that applies in your city, it would come from your provincial revenue authority (such as the Punjab Revenue Authority) rather than FBR, and it's worth confirming directly with them before assuming it affects your specific lease.
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Frequently Asked Questions
Yes. Rental income is a distinct head of income under the Income Tax Ordinance, 2001, and must be declared on your annual tax return. Tenants who qualify as prescribed persons also withhold tax on it in advance under Section 155.
It depends on the annual rent. Individuals pay nothing up to Rs. 300,000, then 5%, 10%, or 25% depending on the slab. Companies pay a flat 15% regardless of the amount, as long as they're on the Active Taxpayer List.
The tenant deducts and deposits the tax with FBR on the landlord's behalf, but the tax itself belongs to the landlord — it's credited against the landlord's final tax liability when they file their return.
Section 155 of the Income Tax Ordinance, 2001 requires prescribed persons paying rent for immovable property to deduct withholding tax at source before the payment reaches the landlord.
Yes. Tax withheld under Section 155 is adjustable — it's treated as advance tax and offset against the landlord's total tax liability when the annual return is filed, using the TR-6 certificate as proof.
Yes. If the total advance tax deducted during the year exceeds the landlord's actual tax liability under Section 15, the excess can be claimed as a refund or carried forward when filing the return.
Yes. Non-filers are subject to a 100% higher withholding rate than active filers at every slab under Section 155, which is why staying on the FBR Active Taxpayer List matters for anyone earning rental income.
Yes — the rent tax calculator on this page is free to use, requires no sign-up, and is updated for Tax Year 2026-27 under the Finance Act 2026, covering both individual and company landlords.
Rental income tax doesn't have to be confusing once the slab, filer status, and deduction rules are laid out clearly. Run your numbers through the calculator above, keep your TR-6 certificates on file, and check your Active Taxpayer List status before each rent payment is due — those three habits cover most of what FBR expects from landlords in Pakistan.
Very well made and informative . Thank you
Thank You Sir