RENT WITHHOLDING TAX · SECTION 155
Rental Income Tax Calculator Pakistan 2026-27
Work out withholding tax on your rent under Section 155 of the Income Tax Ordinance — for individuals, AOPs and companies, filer or non-filer.
Based on Section 155 rates for FY 2026-27. Property income only — not combined with salary.
Why Rental Income Is Taxed Separately From Your Salary
One detail that trips up a lot of landlords who also have a salaried job: rental income under Section 155 is taxed on its own separate slab structure — it is not added to your salary and taxed together as one combined income at the salary slab rates. Your property income has its own dedicated slabs, its own filer/non-filer split, and tenants (or their employers, in the case of company tenants) are required to withhold tax on rent paid and deposit it with FBR, similar to how your employer withholds tax on your salary.
Individual Landlord Rate Table
| Annual Rent | Filer | Non-Filer |
|---|---|---|
| Up to Rs. 300,000 | 0% | 0% |
| Rs. 300,001 – 600,000 | 5% of excess over 300,000 | 10% of excess over 300,000 |
| Rs. 600,001 – 2,000,000 | Rs. 15,000 + 10% of excess over 600,000 | Rs. 30,000 + 20% of excess over 600,000 |
| Above Rs. 2,000,000 | Rs. 155,000 + 25% of excess over 2,000,000 | Rs. 310,000 + 50% of excess over 2,000,000 |
Notice how sharply the non-filer rate diverges at the top bracket — 50% versus 25% above Rs. 2,000,000 in annual rent. On a large commercial property or several rental units combined, that gap alone can be worth becoming a filer for.
Company-Owned Property: A Completely Different, Flat Rate
If the property is owned by a company rather than an individual or association of persons (AOP), none of the slab table above applies. Companies pay a flat 15% if they’re a filer, or a flat 30% if they’re a non-filer, on the entire rental amount — no tiered brackets, no exemption threshold. This is a very different calculation from individual ownership and easy to get wrong if a property was recently transferred into a company’s name.
Worked Example: Individual Filer Earning Rs. 1,800,000/Year in Rent
- Bracket: Rs. 600,001 – 2,000,000 → Rs. 15,000 + 10% of excess over Rs. 600,000
- Excess: Rs. 1,800,000 − Rs. 600,000 = Rs. 1,200,000
- Tax: Rs. 15,000 + (Rs. 1,200,000 × 10%) = Rs. 15,000 + Rs. 120,000 = Rs. 135,000/year
- As a non-filer instead: Rs. 30,000 + (Rs. 1,200,000 × 20%) = Rs. 30,000 + Rs. 240,000 = Rs. 270,000/year — exactly double
Common Mistakes Landlords Make
- Adding rental income to salary and applying salary slabs. These are two entirely separate tax calculations under different sections — combining them gives a wrong answer either way.
- Forgetting company-owned property uses a flat rate, not the slab table. This is one of the most common errors when a family transfers a rental property into a company structure for other reasons.
- Not confirming who is responsible for withholding. For individual tenants renting from you, the withholding obligation and paperwork can differ from a company or government tenant — check your tenancy agreement’s tax clause.
- Ignoring the exemption on the first Rs. 300,000. Some landlords with modest rental income overpay by not applying the 0% band correctly on the portion below Rs. 300,000.
If you’re deciding whether to sell the property instead of renting it out, compare this against the Property Purchase Tax Calculator and the seller-side considerations under Section 236C before making that call.
Section 155 Rent Tax Rates — FY 2026-27
| Yearly Rent (Individual/AOP) | Filer Rate | Non-Filer Rate |
|---|---|---|
| Up to Rs. 300,000 | No tax | No tax |
| Rs. 300,001 – 600,000 | 5% above Rs. 300,000 | 10% above Rs. 300,000 |
| Rs. 600,001 – 2,000,000 | Rs. 15,000 + 10% above Rs. 600,000 | Rs. 30,000 + 20% above Rs. 600,000 |
| Above Rs. 2,000,000 | Rs. 155,000 + 25% above Rs. 2,000,000 | Rs. 310,000 + 50% above Rs. 2,000,000 |
Company-owned property: flat 15% for filer companies, 30% for non-filer companies, applied from the first rupee of rent. Tenants must withhold tax once rent paid to a single owner reaches Rs. 1,500,000 in a year.
Sourced from Finance Act 2026
Last reviewed 22 September 2026
Reviewed by Tax Professionals
Frequently Asked Questions
What is the tax on rental income under Section 155?
Section 155 of the Income Tax Ordinance requires tenants (or their withholding agent) to deduct tax from rent paid to a property owner. For individuals and AOPs the rate is slab-based, from 0% up to 25% for filers and up to 50% for non-filers. Companies pay a flat 15% (filer) or 30% (non-filer).
How do I calculate tax on my rental income?
Add up your total rent received in the tax year, choose whether you’re an individual/AOP or a company, select your filer status, then apply the matching slab. Our calculator above does this instantly and shows the slab-by-slab breakdown.
Is rent tax different for filers and non-filers?
Yes. Non-filers pay roughly double the filer rate at every bracket. Becoming an active filer on the FBR Active Taxpayer List meaningfully lowers your withholding tax on rental income.
Where do QuickTaxPK’s tax figures come from?
All rates are based on the Income Tax Ordinance 2001 as amended by the Finance Act 2026, cross-checked against official FBR notifications. This page was last reviewed on 22 September 2026.
Can I deduct property expenses like maintenance or loan interest before this tax applies?
The withholding tax under Section 155 is calculated on your gross rent received, without deducting expenses at the withholding stage — the tenant withholds based on the rent amount alone. However, when you file your annual income tax return, you can claim allowable deductions such as repairs, property tax paid, insurance, and in some cases loan interest against your rental income, which may reduce your final tax liability below what was withheld, making you eligible for a refund or adjustment.
Need to check your salary tax too?
Official sources: Federal Board of Revenue (FBR). Rates and rules can change; always confirm with the official source before relying on an estimate.