ADVANCE TAX ON VEHICLES · SECTION 231B

Vehicle Tax Calculator Pakistan 2026-27

Advance tax on registering a new vehicle or transferring a used one — filer or non-filer, any engine size.

How Section 231B Advance Tax Actually Works

Whenever a vehicle is registered as new or a used one changes hands in Pakistan, the Motor Registration Authority — your provincial Excise and Taxation Department, or the manufacturer at the point of booking — collects an advance income tax on FBR’s behalf under Section 231B of the Income Tax Ordinance, 2001. It’s not a separate “car tax” in the way people often assume; it’s an advance against whatever income tax you’ll eventually owe for the year, and it gets adjusted when you file your annual return. If you overpay because your actual tax liability turns out lower, you can claim it back.

The one thing that catches most buyers off guard is how much the rate swings based on your filer status at the exact moment of registration. FBR checks the Active Taxpayer List (ATL) that day — not whether you’ve filed before, not whether you plan to file this year. If your name isn’t on the ATL when the dealer or excise office processes the transaction, you pay the non-filer rate, full stop.

Worked Example: New 1300cc Car, Invoice Value Rs. 4,200,000

Say you’re booking a new 1300cc sedan with an invoice price of Rs. 4,200,000. At the 1300cc bracket, filers pay 1.5% and non-filers pay 4.5% of invoice value:

• As a filer: Rs. 4,200,000 × 1.5% = Rs. 63,000
• As a non-filer: Rs. 4,200,000 × 4.5% = Rs. 189,000

That’s a Rs. 126,000 difference on one transaction — more than most people spend getting on the Active Taxpayer List would ever cost them. It’s one of the clearest examples of why filer status pays for itself the moment you buy a car.

Worked Example: Transferring a 3-Year-Old 1300cc Car

Used-vehicle transfers use a flat rupee amount by engine capacity, not a percentage of price — and that flat amount drops by 10% for every year of the vehicle’s age, disappearing entirely once it passes 5 years old. For a 1300cc car that’s 3 years old:

• Base flat rate at 1300cc: Rs. 7,500 (filer) / Rs. 22,500 (non-filer)
• Age reduction: 3 years × 10% = 30% off
• Filer pays: Rs. 7,500 × 0.70 = Rs. 5,250
• Non-filer pays: Rs. 22,500 × 0.70 = Rs. 15,750

Full Rate Table — New Registration (% of Invoice Value)

Engine Capacity	Filer Rate	Non-Filer Rate
Up to 850cc	0.5%	1.5%
851cc – 1000cc	1.0%	3.0%
1001cc – 1300cc	1.5%	4.5%
1301cc – 1600cc	2.0%	6.0%
1601cc – 1800cc	3.0%	9.0%
1801cc – 2000cc	5.0%	15.0%
2001cc – 2500cc	7.0%	21.0%
2501cc – 3000cc	9.0%	27.0%
Above 3000cc	12.0%	36.0%

Full Rate Table — Used Vehicle Transfer (Flat Amount Before Age Reduction)

Engine Capacity	Filer	Non-Filer
Up to 850cc	Rs. 0	Rs. 0
851cc – 1000cc	Rs. 5,000	Rs. 15,000
1001cc – 1300cc	Rs. 7,500	Rs. 22,500
1301cc – 1600cc	Rs. 12,500	Rs. 37,500
1601cc – 1800cc	Rs. 18,750	Rs. 56,250
1801cc – 2000cc	Rs. 25,000	Rs. 75,000
2001cc – 2500cc	Rs. 37,500	Rs. 112,500
2501cc – 3000cc	Rs. 50,000	Rs. 150,000
Above 3000cc	Rs. 62,500	Rs. 187,500

Reminder: this flat amount drops 10% per year of the vehicle’s age and reaches zero once the car is over 5 years old — so a 6-year-old car pays no 231B tax at transfer, regardless of engine size or filer status.

Mistakes People Actually Make With This Tax

• Confusing 231B with annual token tax. Section 231B is a one-time charge at registration or transfer. The annual token tax is a completely separate, mostly provincial charge you pay every year you own the vehicle — they’re often confused because both get paid at the same Excise office counter.
• Assuming the new-vehicle percentage table applies to used transfers. It doesn’t. Used transfers use flat rupee amounts, not a percentage of the sale price, which is why a Rs. 8 lakh used Corolla and a Rs. 45 lakh used Corolla pay the exact same 231B amount at the same engine size and age.
• Forgetting the ATL is checked on transaction day. Filing your return the week after you register a car does nothing for that transaction — only your ATL status at the moment of registration decides the rate.
• Not accounting for the 5-year age cutoff. Buyers negotiating a used car sometimes budget for 231B without realizing a car older than 5 years owes nothing under this section.

Frequently Asked Questions

Is the 231B advance tax refundable if I overpay?

Yes. It’s called an “advance” tax because it’s adjusted against your total income tax liability for the year when you file your annual return. If the 231B amount you paid at registration turns out higher than your actual tax due, you can claim the difference back or carry it forward — but only if you actually file a return. Non-filers who never submit a return effectively lose the ability to reclaim any overpayment.

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