Rental Income Tax Calculator
Landlords in Pakistan routinely confuse the tax withheld from their rent with the tax they actually owe. This works out both, and tells you whether you are owed a refund.
Rates verified 2026-10-10 against the Finance Act 2026 for Tax Year 2027 (1 July 2026 - 30 June 2027).
Implements sections 15, 155 of the Income Tax Ordinance, 2001.
Before any deductions.
Repairs, insurance, property tax and financing costs.
Salary or business income. Rent stacks on top of this, so it affects your marginal rate.
⚡ Calculations update automatically as you type
Tax you actually owe
Rs 48,240
On net property income, at your slab rate
Tax withheld from your rent
Rs 51,000
Section 155, 5.3% of gross rent
More was withheld than you owe, so you are due a refund of Rs 2,760 — but only if you file a return. A non-filer cannot reclaim it.
- Gross rent
- Rs 9,60,000
- Net property income
- Rs 9,21,600
- Income after tax
- Rs 8,73,360
How your net income was worked out
- Gross rent received
- Rs 9,60,000
- Less allowable expenses
- Rs 0
- Less admin & collection charges (4% of gross)
- (Rs 38,400)
- Net property income
- Rs 9,21,600
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Bilingual Tax Glossary(ٹیکس کی بنیادی اصطلاحات)
Quick guide to standard Pakistani tax terms in Urdu and English.
This is an estimate for general information, not professional tax advice. It does not account for every allowance, exemption or provincial levy that may apply to you. Confirm your position with the FBR or a qualified tax practitioner before acting on it.
Frequently asked questions
- How is rental income taxed in Pakistan?
- Property income is taxed on a net income basis at the normal slab rates — gross rent less allowable expenses, stacked on top of your other income. Separately, your tenant or agent withholds advance tax from the gross rent under section 155. That withholding is a credit against your liability, not the final cost.
- Is any rental income tax free?
- No withholding is applied to gross annual rent up to Rs 3,00,000 under section 155. That is a withholding threshold, not an exemption from tax — the income still forms part of your taxable income and is taxed at your slab rate once your total income exceeds the general Rs 6,00,000 exemption.
- What expenses can I deduct against rent?
- Repairs, insurance, local property tax, ground rent, interest on money borrowed to acquire or improve the property, and legal costs. In addition, administration and collection charges are deductible up to 4% of gross rent receipts — this calculator applies that automatically.
- Do non-filers pay more tax on rent?
- The withholding rate is multiplied by 2 for taxpayers not on the Active Taxpayer List. The underlying liability is the same, so a non-filer landlord typically has far more withheld than they owe — and because they do not file a return, they cannot reclaim the difference.
- Can I get a refund of rent withholding tax?
- Yes, if you file. Section 155 withholding is advance tax credited against your assessed liability, and any excess is refundable on filing your return. This is a common situation for landlords whose only income is modest rent, because the withholding slabs can exceed the slab tax actually due.
- Was the deemed income tax on property abolished?
- Yes. The deemed rental income tax on immovable property, introduced in 2022 under section 7E, was abolished in 2026 following a constitutional court decision. It does not apply for Tax Year 2027.
Two different numbers
The single most useful thing to understand about rental tax in Pakistan is that there are two separate figures, and they are rarely the same.
The first is section 155 withholding. Your tenant or managing agent deducts this from the gross rent before paying you, on a slab scale applied to the gross figure. It is advance tax.
The second is your actual liability: net property income — gross rent less allowable expenses and the statutory 4% administration allowance — taxed at the ordinary slab rates, stacked on top of whatever else you earn.
Because the withholding is charged on gross and your liability is charged on net, modest-income landlords frequently have more withheld than they owe. That difference is refundable, but only through filing a return.
Why your other income matters
Property income does not get its own private rate scale; it sits on top of your salary or business income. A landlord with no other income may pay very little on their rent, while the same rent in the hands of someone already at a high marginal rate is taxed at that higher rate. This is why the calculator asks about your other income — leaving it blank will understate your tax.
The non-filer trap
A non-filer landlord gets the worst of both: withholding at 2 times the normal rate, charged on gross rent, with no route to reclaim the excess. For many small landlords this single fact makes registration straightforwardly profitable.
Not covered here
Provincial property tax, which is levied separately by each province on annual rental value, is not part of this calculation. Nor is capital gains tax on a later sale of the property — for that, use the property calculator.