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 + 20% of amount exceeding Rs 2,200,000 |
| Rs 3,200,001 – Rs 4,100,000 | Rs 316,000 + 25% of amount exceeding Rs 3,200,000 |
| Rs 4,100,001 – Rs 5,600,000 | Rs 541,000 + 29% of amount exceeding Rs 4,100,000 |
| Rs 5,600,001 – Rs 7,000,000 | Rs 976,000 + 32% of amount exceeding Rs 5,600,000 |
| Above Rs 7,000,000 | Rs 1,424,000 + 35% of amount exceeding Rs 7,000,000 |
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: not applicable to 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 2026. Surcharge: section 4AB proviso amended by the Finance Act 2026. Effective from 1 July 2026.
Verification status: Salaried table checked against FBR Withholding Tax Rate Card 2027; salaried surcharge withdrawal per FBR Circular No. 2 of 2026-27. Non-salaried table (unchanged) 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 Card, Tax Year 2027 (Finance Act 2026) View FBR Withholding Tax Rate Card, Tax Year 2027 (Finance Act 2026) Download PDF FBR Withholding Tax Rate Card, Tax Year 2027 (Finance Act 2026)
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 2026
- Salaried slabs restructured: intermediate slabs added and the 35% rate now starts above Rs 7,000,000. (Source: FBR Budget 2026-27 Salient Features)
- Section 4AB surcharge withdrawn for salaried individuals; it continues for other individuals and AOPs. (Source: FBR Circular No. 2 of 2026-27 — Finance Act 2026)
Official documents
- Finance Act 2026 (Gazette) View Finance Act 2026 (Gazette) Download PDF Finance Act 2026 (Gazette)
- FBR Circular No. 2 of 2026-27 — Finance Act 2026 View FBR Circular No. 2 of 2026-27 — Finance Act 2026 Download PDF FBR Circular No. 2 of 2026-27 — Finance Act 2026
- FBR Budget 2026-27 Salient Features View FBR Budget 2026-27 Salient Features Download PDF FBR Budget 2026-27 Salient Features