Income tax Rates on taxable income
Annual income tax on taxable income under Division I, Part I, First Schedule of the Income Tax Ordinance, 2001.
Salaried individuals
Applies where salary exceeds 75% of taxable income.
| Taxable income | Income tax |
|---|---|
| Up to Rs 600,000 | 0% |
| Rs 600,001 – Rs 1,200,000 | 1% of amount exceeding Rs 600,000 |
| Rs 1,200,001 – Rs 2,200,000 | Rs 6,000 + 11% of amount exceeding Rs 1,200,000 |
| Rs 2,200,001 – Rs 3,200,000 | Rs 116,000 + 23% of amount exceeding Rs 2,200,000 |
| Rs 3,200,001 – Rs 4,100,000 | Rs 346,000 + 30% of amount exceeding Rs 3,200,000 |
| Above Rs 4,100,000 | Rs 616,000 + 35% of amount exceeding Rs 4,100,000 |
Non-salaried individuals / business individuals
| Taxable income | Income tax |
|---|---|
| Up to Rs 600,000 | 0% |
| Rs 600,001 – Rs 1,200,000 | 15% of amount exceeding Rs 600,000 |
| Rs 1,200,001 – Rs 1,600,000 | Rs 90,000 + 20% of amount exceeding Rs 1,200,000 |
| Rs 1,600,001 – Rs 3,200,000 | Rs 170,000 + 30% of amount exceeding Rs 1,600,000 |
| Rs 3,200,001 – Rs 5,600,000 | Rs 650,000 + 40% of amount exceeding Rs 3,200,000 |
| Above Rs 5,600,000 | Rs 1,610,000 + 45% of amount exceeding Rs 5,600,000 |
Surcharge (section 4AB)
Where taxable income exceeds Rs 10,000,000: 9% of income tax for salaried individuals; 10% for non-salaried individuals.
Legal basis: Income Tax Ordinance 2001, First Schedule, Part I, Division I — clause (1A) salaried and clause (1) non-salaried individuals, as amended by the Finance Act 2025. Surcharge: section 4AB proviso (9% salaried) inserted by the Finance Act 2025. Effective from 1 July 2025.
Verification status: Salaried rates and 9% salaried surcharge checked against FBR Circular 01 of 2025-26 and Budget 2025-26 salient features. Non-salaried table (unchanged from TY2025) and 10% surcharge cross-checked with secondary sources. Professional review required.
Withholding tax Tax deducted at source
Withholding tax is collected at source on specific payments and transactions (for example salary, contracts, banking, property and utilities) under the relevant sections of the Ordinance. These rates are not the income tax slabs above. Use FBR’s official rate card for this tax year:
- FBR — Withholding Tax Rate Cards (all tax years) View FBR — Withholding Tax Rate Cards (all tax years)
We link FBR’s official card rather than reproducing withholding rates. FBR notes that the Income Tax Ordinance prevails over the rate card in case of conflict.
Key changes — Finance Act 2025
- Salaried rates reduced for taxable income up to Rs 3,200,000 (first taxable slab rate 1%). (Source: FBR Budget 2025-26 Salient Features)
- Section 4AB surcharge for salaried individuals reduced from 10% to 9%. (Source: FBR Budget 2025-26 Salient Features)
Official documents
- Finance Act 2025 — FBR View Finance Act 2025 — FBR
- FBR Circular No. 01 of 2025-26 — Finance Act 2025 View FBR Circular No. 01 of 2025-26 — Finance Act 2025 Download PDF FBR Circular No. 01 of 2025-26 — Finance Act 2025
- FBR Budget 2025-26 Salient Features View FBR Budget 2025-26 Salient Features Download PDF FBR Budget 2025-26 Salient Features