Income Tax Rates and Slabs for Rental Income, 2022-2023

For the fiscal year 2022–2023, the Federal Board of Revenue (FBR) has released revised withholding tax rates on property income.

Each specified individual is required to collect the withholding tax from those who receive the immovable property’s rent.

Under Section 155 of the 2001 Income Tax Ordinance, the FBR collects withholding tax on income from the property.

Income tax withholding Slabs for 2022-2023

The withholding tax rates are as follows:

Any sum paid on account of the moveable property’s rent

Table:

(A) When a person or Association of Person (AOP) is involved:

1. There is no tax in cases when the gross rent does not exceed Rs. 300,000.
2. The tax rate should be 5% of the gross amount exceeding Rs. 300,000 in cases where the gross amount of rent exceeds Rs. 300,000 but does not exceed Rs. 600,000.
3. Where the whole gross rent exceeds Rs. 600,000 but falls below Rs. 2,000,000, the tax rate is Rs. 15,000 + 10% of the total gross rent that is greater than Rs. 600,000.
4. The tax rate is Rs. 155,000 + 25% of the gross amount beyond Rs. 2,000,000. It applies when the total gross rent exceeds Rs. 2,000,000.

Salary Income Tax Calculator/ Slabs 2022-2023.

B) In the case of a Firm/ Company:

The tax rate to be deducted under section 155, in the case of the company, shall be 15% of the gross amount of rent.

The tax deduction allowed by Income Tax Ordinance, Section 155, is revocable.