Income Tax Calculator Pakistan

For Tax Year 2027 (1 July 2026 – 30 June 2027), salaried individuals and business persons with an annual income up to PKR 600,000 pay zero income tax. This threshold is unchanged from Tax Year 2026 under the Finance Act 2026. Below this threshold, no tax is withheld or payable under federal law.

Salaried income is taxed under Section 149 of the Income Tax Ordinance 2001 using salary-specific slabs. Under the Finance Act 2026, the top salaried rate for TY 2027 is still 35%, but that top bracket now only starts above PKR 7 million (up from PKR 4.1 million previously), with two new intermediate slabs of 29% and 32% added in between. Business individuals and AOPs use separate, higher slabs reaching up to 45%, unchanged for TY 2027. Salary tax is withheld by the employer monthly; business taxpayers pay advance tax in quarterly instalments.

Section 4AB of the Income Tax Ordinance levies a surcharge on individuals and AOPs whose taxable income exceeds PKR 10 million per year. The Finance Act 2026 has fully withdrawn this surcharge for salaried individuals from Tax Year 2027 onward — so salaried high-earners now pay no surcharge at all. It continues to apply at 10% for business individuals and AOPs, unchanged. For Tax Year 2026 and earlier, the surcharge was 9% (salaried) or 10% (business/AOP). This calculator applies the correct rate automatically based on the income type and tax year you select.

Yes — this is a separate charge from the Section 4AB income surcharge above. Under Section 182A, a taxpayer who files their return after the due date must pay an ATL (Active Taxpayers List) surcharge to be restored to filer status. The Finance Act 2026 raised this steeply from 1 July 2026: PKR 25,000 for individuals (up from PKR 1,000), PKR 50,000 for AOPs/firms (up from PKR 10,000), and PKR 100,000 for companies (up from PKR 20,000). The intermediate “late filer” category has also been abolished — only Filer and Non-Filer statuses now exist. An individual can avoid the surcharge by giving the Commissioner a written undertaking not to acquire immovable property for six months. Missing the filing deadline is now far costlier, making timely filing the more economical choice for every taxpayer category.

Agricultural income is exempt from federal income tax under Article 142 of the Constitution but is subject to provincial agricultural income tax. In Punjab, the Punjab Agricultural Income Tax Act 1997 applies the higher of a fixed per-acre levy (PKR 300/acre irrigated, PKR 150 unirrigated; PKR 600/300 for orchards) or progressive income-based slabs.

Rental income from immovable property is taxed as a separate block of income under Section 15 of the Income Tax Ordinance. The annual tax-free threshold is PKR 300,000. Income between PKR 300,001 and PKR 600,000 is taxed at 5%; up to PKR 2 million at 10%; above PKR 2 million at 25%.

This calculator does not apply: medical allowance (up to 10% of basic salary), tax credits for charitable donations or approved pension/mutual fund schemes, depreciation for business or rental property, advance tax adjustments, or provincial treaty benefits. These can materially reduce your actual liability.

Filing is mandatory if your income exceeds PKR 400,000/year, you own immovable property in a rating area, hold an NTN, are a company director or partner, or have had withholding tax deducted. Being an Active Taxpayer on the FBR ATL also reduces withholding rates on banking transactions, vehicle purchases, and property transfers — and since the Finance Act 2026 raised the ATL restoration surcharge to PKR 25,000 (individuals) and PKR 50,000 (AOPs), filing on time is now significantly cheaper than filing late.