Tax on rent calculator (section 155 withholding)
Work out the tax a tenant who is a prescribed person (a company, a government office, a private school, or anyone paying Rs1.5 million or more a year in rent) deducts from the rent under section 155 of the Income Tax Ordinance, for tax year 2027.
Tax deducted from this rent
Enter the rent, a number of zero or more.
Tax deducted in the year
Rs
An individual or AOP on the ATL, with gross rent more than Rs600,000 but not more than Rs2,000,000 in the year: Rs15,000 + 10% of the amount over Rs600,000 (First Schedule, Part III, Division V(a), row 3).
- Rent for the year
- Rs 1,800,000
- Band
- Over Rs600,000, up to Rs2 million
- Rate
- Rs15,000 + 10% of the amount over Rs600,000
This is the tax the tenant deducts, not the landlord's tax for the year. Rent is added to the landlord's taxable income, after the section 15A deductions, and the tax on it comes from the landlord's return. The amount deducted is credited against that tax (section 168). That tax is not worked out here.
Rates as of 1 July 2026, from the Income Tax Ordinance 2001 as amended up to 30 June 2026. Check with your tax adviser before you file.
Division V rates
The tax a prescribed person deducts from rent under section 155. For an individual or AOP the rate goes up with the gross rent; for a company it is one rate.
| Gross rent | Tax deducted |
|---|---|
| Up to Rs300,000 | Nil |
| Over Rs300,000, up to Rs600,000 | 5% of the amount over Rs300,000 |
| Over Rs600,000, up to Rs2 million | Rs15,000 + 10% of the amount over Rs600,000 |
| Over Rs2 million | Rs155,000 + 25% of the amount over Rs2,000,000 |
| Company | 15% of the gross amount of rent |
Source: Income Tax Ordinance 2001 as amended up to 30 June 2026, section 155 and First Schedule, Part III, Division V (Table as substituted by the Finance Act 2021), and the Tenth Schedule, rule 1.
Who deducts the tax
Section 155(1): "Every prescribed person making a payment in full or part (including a payment by way of advance) to any person on account of rent of immovable property (including rent of furniture and fixtures, and amounts for services relating to such property) shall deduct tax from the gross amount of rent paid at the rate specified in Division V of Part III of the First Schedule." Section 155(3) lists the prescribed persons:
- the Federal Government, a Provincial Government or a Local Government
- a company
- a non-profit organization or a charitable institution
- a diplomatic mission of a foreign state
- a private educational institution, a boutique, a beauty parlour, a hospital, a clinic or a maternity home
- "individuals or association of persons paying gross rent of rupees one and a half million and above in a year"
- any other person notified by the Board (FBR)
A household paying less than Rs1.5 million a year in rent, and not a prescribed person for another reason, is not required by section 155 to deduct tax from it.
The landlord's tax for the year
Section 15(1): "The rent received or receivable by a person for a tax year, other than rent exempt from tax under this Ordinance, shall be chargeable to tax in that year under the head 'Income from Property'." Until the Finance Act 2021, individuals and AOPs paid a separate rate on it under Division VIA of Part I of the First Schedule; the Finance Act 2021 omitted that Division. Rent is now part of taxable income and taxed at the person's rates with the rest of their income.
Section 15A allows deductions in working out that income, among them "an allowance equal to one-fifth of the rent chargeable to tax in respect of the building for the year" for repairs, insurance on the building, local taxes on the property, ground rent, profit on money borrowed to buy or build it, up to 4% of the rent for collecting it, legal costs of defending the title, and rent that cannot be recovered.
The tax deducted under section 155 is not a final tax: the Finance Act 2010 omitted section 155(2), which made it final, and took section 155 out of the final taxes in section 169. Section 168(2) gives the landlord "a tax credit for that tax in computing the tax due by the person on the taxable income of the person for the tax year in which the tax was collected or deducted."
Questions
What is the rental income tax in Pakistan in 2026-27?
There is no separate rate on rental income any more: the Finance Act 2021 omitted Division VIA, and rent is taxed with the landlord's other income. What has a table of its own is the tax a prescribed tenant deducts under section 155: for an individual or AOP landlord, nil up to Rs300,000, 5% of the amount over Rs300,000 up to Rs600,000, Rs15,000 plus 10% of the amount over Rs600,000 up to Rs2 million, and Rs155,000 plus 25% of the amount over Rs2 million; for a company, 15%.
How do I use this tax on rent income calculator?
Enter the rent per month or per year, whether the landlord is an individual or AOP or a company, and whether the landlord is on the ATL. The result is the tax a prescribed tenant deducts in the year and the row of Division V that applied.
Kiraye par tax kitna hai?
Jo kirayedar prescribed person hai (company, sarkari daftar, private school, ya jo saal mein Rs15 lakh ya us se zyada kiraya deta hai) woh kiraye se tax kaatta hai. Individual ya AOP malik ke liye: Rs3 lakh tak kuch nahi, phir 5%, 10% aur Rs20 lakh se upar 25%; company ke liye 15%.
Does a tenant have to deduct tax from rent?
Only a prescribed person under section 155(3): governments, companies, non-profit organizations and charitable institutions, diplomatic missions, private educational institutions, boutiques, beauty parlours, hospitals, clinics and maternity homes, individuals and AOPs paying gross rent of Rs1.5 million or more in a year, and persons FBR notifies.
Is the tax deducted from rent a final tax?
No. The Finance Act 2010 omitted section 155(2), which made it final, and section 168(2) allows it as a tax credit against the landlord's tax for the year.
Do non-filers pay more tax on rent?
The Tenth Schedule says the rate deducted from a person not on the Active Taxpayers' List "shall be increased by hundred percent of the rate specified". For a company landlord that makes 30%. For an individual or AOP the Ordinance does not say how the stepped table is increased, so the calculator gives no figure.
What deductions can a landlord claim from rental income?
Section 15A: one-fifth of the rent for repairs, insurance on the building, local taxes on the property, ground rent, profit on a loan to buy or build it, up to 4% of the rent for collecting it, legal costs of defending the title, and unpaid rent that cannot be recovered.