Pakistan Income Tax Rates: FY 2026-27 Rules and FY 2018-19 Historical Slabs

1. Governing legislation and key definitions

Pakistan's principal income tax legislation is the Income Tax Ordinance, 2001, supported by the Income Tax Rules, 2002 and annual Finance Acts. Section 4 imposes income tax, section 9 addresses taxable income, section 11 identifies the heads of income, and section 12 governs salary. The First Schedule, Part I provides applicable rates. The Second Schedule contains exemptions, concessions and other specified treatments.

A normal tax year ends on 30 June. A salaried individual generally uses the salaried rate schedule when salary represents the statutory required proportion of taxable income. An association of persons (AOP) includes qualifying partnerships and other bodies under the Ordinance; a company is taxed separately. The FBR income tax basics explain taxable income, tax year, residence and heads of income.

2. Salaried individuals: FY 2026-27 (tax year 2027)

Pakistan uses progressive rates on taxable salary income. The rate and the fixed tax component depend on the band prescribed by Division I, Part I, First Schedule for tax year 2027. The zero-tax threshold and higher marginal bands are not interchangeable with the archived 2018-19 figures.

Taxpayers with taxable income above applicable thresholds should also review the section 4AB surcharge, if relevant, and any relief specifically available under the amended Ordinance. Taxable salary may include allowances and perquisites, subject to statutory exclusions and valuation rules.

3. Self-employed persons and associations of persons

Business income is generally dealt with under sections 18 to 36 of the Ordinance, subject to allowable expenditure, depreciation, losses and other adjustments. Non-salaried individuals and AOPs follow their own progressive rate schedule in Division I of Part I of the First Schedule. The salaried tax schedule should not be applied automatically to professional fees, business profits or AOP income.

For 2026-27, use the latest FBR legislative text to confirm the thresholds, tax on each bracket, minimum tax, applicable surcharge and advance tax requirements. The Income Tax Rules, 2002 provide procedural detail.

4. Company income tax and special categories

Company tax rates are prescribed by Division II, Part I of the First Schedule. For tax year 2027, the general non-banking company rate is 29%, subject to specific classifications, concessions and special regimes. Banking companies and qualifying small companies may have different statutory rates. Additional tax may arise under section 4C (super tax), section 113 (minimum tax), and other provisions, depending on facts and thresholds.

Company status, turnover, industry, accounting period and tax year can materially affect liability. Review the current consolidated Ordinance rather than relying on a single headline corporate rate.

5. Capital gains, property and withholding tax

Capital gains fall under section 37, while securities may be subject to section 37A and the applicable First Schedule provisions. Property transactions may also attract collection or withholding under sections 236C and 236K, with differences based on taxpayer status, transaction value and current amendments. These transaction taxes are not necessarily the final capital gains tax.

Withholding tax is an amount deducted or collected at source. For example, section 149 concerns salary withholding, while section 153 addresses certain payments for goods, services and contracts. Whether tax is adjustable, minimum or final depends on the relevant provision. Consult the FBR tax year 2027 withholding rate card.

6. Senior citizens, teachers and researchers: reliefs

Tax credits and reductions are conditional. Eligibility for any senior citizen, disability-related, teacher or researcher concession depends on the relevant tax year, the taxpayer's circumstances and the exact provision in the Second Schedule or other applicable section. A concession available in an earlier year does not automatically continue into 2026-27. The FBR's updated Ordinance should be checked before claiming relief.

7. Historical Pakistan income tax slabs: FY 2018-19

Archived tables from the original article, reflecting figures presented for the year beginning 1 July 2018. They are retained for historical reference only; the year was subject to legislative changes and these simplified marginal-rate tables should not be treated as a definitive calculation of tax year 2019 liability.

Individual income tax rates shown in the 2018-19 article

Association of persons rates shown in the 2018-19 article

Company rate shown in the 2018-19 article

For the applicable historical text and amendments, consult the FBR's 2018 and 2019 versions of the Income Tax Ordinance and the Finance Act archive. The 2018-19 article also discussed concessions for senior citizens, teachers and researchers; these require confirmation against the legislation in force for that historical tax year.

8. Filing, record keeping and official references

Taxpayers should determine residence, classify income under the correct head, reconcile withholding statements, keep documentary support for deductions and review their filing obligations. The FBR income tax guide provides an overview, and the FBR due-date information explains the normal tax year.

• Income Tax Ordinance, 2001 - consolidated and historical versions
• Finance Act 2026 - official budget portal
• FBR withholding tax rate cards for tax year 2027
• Income Tax Rules, 2002

This article provides general information, not a personal tax assessment. Rates and concessions must be applied with reference to the correct tax year and the taxpayer's facts.