Rental Income Tax Calculator Pakistan

Rental Income Tax Calculator Pakistan 2026-27

Use the Rental Income Tax Calculator Pakistan 2026-27 to estimate income tax on rent received from a house, apartment, shop, office, commercial building or other rental property. Pakistan Tax Calculator helps landlords and property owners understand estimated rental income tax, possible withholding tax deductions and the amount remaining after tax.

Tax Year 2027 covers the period from 1 July 2026 to 30 June 2027. For individuals and associations of persons (AOPs), rental income is generally taxed under the applicable income tax rules after allowable deductions. Tax deducted by a tenant under Section 155 is a separate withholding mechanism and should not automatically be treated as the final tax liability.

Rental Income Tax Calculator

Open the Rental Income Tax Calculator on Pakistan Tax Calculator to estimate the tax on your rental income. Enter the relevant rent details and other income information requested by the calculator. The result depends on the taxpayer category, applicable tax slabs, eligible deductions and withholding tax already deducted.

Information you may need:

  • Monthly or annual rental income
  • Tax year
  • Taxpayer type, such as individual, AOP or company
  • Other taxable income, where relevant
  • Eligible deductions related to the property
  • Withholding tax already deducted

Use the result as an estimate and confirm your circumstances against the current law and official FBR information.

Rental Income Tax Rules Pakistan 2026-27

Rental income from immovable property is generally chargeable under the head Income from Property under Section 15 of the Income Tax Ordinance, 2001. For an individual or AOP, taxable rental income is generally considered alongside other taxable income when calculating the annual income tax liability.

This means the annual tax liability may differ from the amount a tenant deducts at source. The final calculation can depend on the taxpayer's total income, whether the salaried or non-salaried tax table applies, allowable deductions and other relevant provisions.

Income Tax Slabs for Individuals and AOPs

For Tax Year 2027, the following non-salaried individual and AOP slabs are relevant when this tax table applies to the taxpayer. Rental income should not automatically be calculated in isolation if the landlord has other taxable income.

Annual Taxable Income Income Tax Calculation
Up to Rs. 600,000 0%
Rs. 600,001 to Rs. 1,200,000 15% of the amount exceeding Rs. 600,000
Rs. 1,200,001 to Rs. 1,600,000 Rs. 90,000 + 20% of the amount exceeding Rs. 1,200,000
Rs. 1,600,001 to Rs. 3,200,000 Rs. 170,000 + 30% of the amount exceeding Rs. 1,600,000
Rs. 3,200,001 to Rs. 5,600,000 Rs. 650,000 + 40% of the amount exceeding Rs. 3,200,000
Above Rs. 5,600,000 Rs. 1,610,000 + 45% of the amount exceeding Rs. 5,600,000

Important: These are non-salaried individual and AOP rates, not a separate rental-income tax table. If salary makes up more than 75% of an individual's taxable income, the applicable salaried tax table may apply instead. A company is subject to a different tax regime.

Rental Income Withholding Tax Under Section 155

Section 155 covers withholding tax on rent from immovable property in specified circumstances. Certain tenants and other prescribed persons may be required to deduct tax when paying rent. The applicable rate depends on the landlord's legal category, the amount of rent and relevant ATL rules.

The following rates summarise the commonly applicable Section 155 withholding schedule for individuals and AOPs for Tax Year 2027. These are withholding calculations on gross annual rent, not a replacement for the landlord's complete annual income tax calculation.

Gross Annual Rent Withholding Tax Calculation
Up to Rs. 300,000 Nil
Rs. 300,001 to Rs. 600,000 5% of the amount exceeding Rs. 300,000
Rs. 600,001 to Rs. 2,000,000 Rs. 15,000 + 10% of the amount exceeding Rs. 600,000
Above Rs. 2,000,000 Rs. 155,000 + 25% of the amount exceeding Rs. 2,000,000

For companies, the commonly listed Section 155 withholding rates are 15% for ATL companies and 30% for companies not appearing on the ATL. Confirm the latest FBR rate card and the applicable rules for the particular payment before relying on these figures.

Example: Calculate Tax on Rental Income

Suppose an individual receives Rs. 100,000 per month in rent. The annual gross rent is calculated as follows:

  • Monthly rent: Rs. 100,000
  • Annual gross rent: Rs. 1,200,000
  • Illustrative Section 155 withholding calculation: Rs. 15,000 + 10% of Rs. 600,000
  • Estimated withholding tax: Rs. 75,000

This example estimates withholding under the stated schedule. It does not determine the landlord's final annual income tax, which may change when allowable deductions and other taxable income are taken into account.

Allowable Deductions From Rental Income

Section 15A of the Income Tax Ordinance, 2001, provides for specified deductions from income from property when the legal conditions are met. The exact amount depends on the expense and the applicable provision.

Potentially relevant deductions may include:

  • A statutory allowance for repairs, calculated according to the applicable law
  • Eligible insurance premiums for the property
  • Property taxes and qualifying local charges relating to the property
  • Ground rent, where applicable
  • Eligible interest or profit on a loan used to acquire, construct or renovate the property
  • Qualifying expenditure incurred to collect rent
  • Eligible legal costs related to the property's title or certain legal proceedings
  • Unrecoverable rent, subject to statutory conditions

Not every expense is automatically deductible. Keep relevant invoices, payment records and supporting documents, and confirm the applicable conditions before claiming a deduction.

Who Should Use a Rental Income Tax Calculator?

  • Owners renting out houses or apartments
  • Landlords receiving rent from shops or offices
  • Owners of commercial buildings
  • Property investors earning rental income
  • Individuals with rent and salary income
  • AOPs and businesses that need an estimate of rental-related tax
  • Tenants and withholding agents checking rent tax deductions

How to Use the Rental Income Tax Calculator

  1. Open the Rental Income Tax Calculator on Pakistan Tax Calculator.
  2. Select Tax Year 2026-27 or Tax Year 2027, if available.
  3. Enter your monthly or annual rent as requested.
  4. Select the correct taxpayer category.
  5. Provide other income details if the calculator requests them.
  6. Enter eligible deductions and withholding tax already paid, where supported.
  7. Calculate the estimate and review the result.
  8. Compare the result with official FBR guidance before filing your tax return.

Rental Income Tax and ATL Status

The Active Taxpayer List (ATL) can affect withholding tax rates under applicable provisions. However, ATL status and the final annual income tax calculation are not the same thing.

  • ATL status: May affect the withholding rate applied to a covered rent payment.
  • Annual income tax: Depends on the applicable tax rules, taxable income, taxpayer category and allowable deductions.
  • Tax already deducted: Keep proof of deductions and determine how they should be accounted for in the annual return.

Check the recipient's ATL status and the current FBR rate card for the relevant date.

How to Declare Rental Income in Your Tax Return

Rental income should be reported under the correct head of income in the income tax return, according to the applicable rules. A landlord may need to calculate gross rent, determine eligible deductions, calculate taxable income and account for withholding tax already deducted.

Keep records such as rent agreements, receipts, bank statements, eligible expense evidence and withholding certificates. Use the FBR IRIS portal to access the relevant tax filing services.

Official FBR Resources

Use these resources to verify the applicable tax rules and withholding rates:

Frequently Asked Questions

Is rental income taxable in Pakistan in 2026-27?

Yes. Rental income from immovable property is generally taxable under the applicable provisions of the Income Tax Ordinance, 2001. The final liability depends on the taxpayer's category, taxable income, eligible deductions and other relevant rules.

What is the rental income tax rate in Pakistan for 2026-27?

There is not one universal final tax rate for every individual landlord. For individuals and AOPs, taxable rent is generally considered under the applicable income tax slabs. Section 155 also provides withholding tax rules for covered rent payments.

Is rent up to Rs. 300,000 tax-free?

The Section 155 withholding schedule provides a nil withholding amount up to Rs. 300,000 of gross annual rent for the relevant individual and AOP category. This should not be confused with a general exemption from all income tax on rental income.

How much withholding tax applies to Rs. 100,000 monthly rent?

At annual gross rent of Rs. 1,200,000, the illustrative Section 155 calculation for an individual or AOP is Rs. 75,000 under the schedule shown above. Confirm the applicable rate and whether the payer is required to withhold tax.

Can rental income be combined with salary income?

Yes. An individual's rental income may affect the calculation of tax on total taxable income. Whether the salaried or non-salaried tax table applies depends on the applicable legal conditions, including the proportion of salary in taxable income.

Can I deduct property expenses from rental income?

Specified deductions may be available under Section 15A, subject to the conditions in the law. Maintain supporting documents and verify the eligibility of each expense.

Where can I check official rental withholding tax rates?

Use the official FBR Withholding Tax Rate Card for Tax Year 2027 and the relevant provisions of the Income Tax Ordinance, 2001, as amended by Finance Act 2026.

Related Tax Calculators and Guides

Explore these related Pakistan tax calculators and guides to understand income tax, withholding tax and property-related tax obligations for Tax Year 2027.

For official tax information, visit the Federal Board of Revenue (FBR) website.

Disclaimer

This article provides general educational information about rental income tax in Pakistan for Tax Year 2027. It is not legal, tax or financial advice. Tax rules, rates and deductions may depend on the facts of a transaction and the taxpayer's circumstances. Verify current FBR guidance and the relevant legal provisions before making tax decisions or filing a return.

About Pakistan Tax Calculator

Pakistan Tax Calculator provides online tax calculators and educational guides to help users understand tax calculations in Pakistan. Use the relevant calculator to estimate rental-related tax and consult official FBR resources when confirming tax rates and filing requirements.

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