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Pakistan Rental Income Tax Calculator – Complete Guide

This Pakistan Rental Income Tax Calculator helps landlords, investors, and property owners accurately estimate their monthly and annual rental tax liability under Pakistan’s Income Tax Ordinance. The calculator covers multiple tax years, including the latest tax slabs applicable under the Finance Acts.

How Rental Income Tax Is Calculated in Pakistan

Rental income tax in Pakistan is calculated on gross annual rent. The tax treatment depends on whether the taxpayer is an Individual, Association of Persons (AOP), or Company, and whether they appear on the Active Taxpayers List (ATL).

Rental Income Tax for Individuals & AOPs

For individuals and AOPs, rental income is taxed under progressive slabs. From Tax Year 2023 onward, rental income falls under the Normal Tax Regime, allowing certain deductions and making withholding tax adjustable against final tax liability.

Rental Income Tax for Companies

Companies earning rental income in Pakistan are subject to a flat tax rate. Active taxpayers are charged 15% of gross rent, while non-active taxpayers are charged 30%. This tax is usually withheld by the tenant and deposited with the Federal Board of Revenue (FBR).

Filer vs Non-Filer Impact on Rental Tax

Being a filer significantly reduces rental income tax. Non-filers face double taxation or higher flat rates, resulting in substantial loss of take-home rental income. Remaining on the Active Taxpayers List (ATL) is strongly recommended for property owners.

Monthly vs Annual Rental Tax Calculation

This calculator converts your monthly rent into annual rent, applies the relevant tax slab, and then breaks the result back into monthly tax and monthly take-home income. This makes it easier to plan cash flows and investment returns.

Why Use an Online Rental Income Tax Calculator?

• Quick and accurate rental tax estimation
• Supports multiple tax years
• Separate logic for Individuals, AOPs, and Companies
• Filer and non-filer comparison
• Monthly and annual take-home income breakdown

Important Notes for Property Owners

Rental tax deducted by tenants is adjustable for filers. Landlords must file annual income tax returns to remain compliant with FBR regulations and to avoid penalties, higher tax rates, and restrictions on financial transactions.

Final Thoughts

Whether you own a house, apartment, shop, plaza, or commercial building, understanding rental income tax in Pakistan is essential for maximizing returns. This calculator is designed to simplify tax planning and provide transparent estimates for better financial decisions.

Rental Income Tax – FAQs (Pakistan)

1. Is rental income taxable in Pakistan?

Yes. Rental income earned from property is taxable under Pakistan’s Income Tax Ordinance. It may be taxed as a separate block or under the Normal Tax Regime depending on the tax year.

2. Who deducts rental income tax?

The tenant deducts tax at source and deposits it with FBR. This tax is adjustable for filers.

3. Difference between filer & non-filer?

Non-filers pay double tax or higher flat rates. Being on ATL significantly reduces tax burden.

4. Rental tax rate for companies?

Companies pay a flat 15% (filer) or 30% (non-filer) on gross rent.

5. Can I deduct expenses?

From Tax Year 2022 onward, rental income is under Normal Tax Regime allowing deductions like repair allowance and property tax.

6. Do I need to file return if tax is deducted?

Yes. Filing is mandatory to remain on Active Taxpayer List and adjust withholding tax.

7. How is monthly rental income calculated for tax purposes?

Monthly rental income is simply the total rent received in a month. The tax is usually calculated on the annual rental income and then divided into monthly portions for clarity and planning.

8. Can rental income be exempt from tax?

Yes. For individuals and AOPs, rental income up to PKR 300,000 per year is exempt for active taxpayers. Non-filers and companies have different thresholds or flat rates.

9. Does the number of properties affect tax?

Each property’s rental income is summed up to calculate total annual rent. Tax is applied on total gross annual rent, not individually per property.

10. Are repair or maintenance costs deductible?

From Tax Year 2022 onward under the Normal Tax Regime, taxpayers can deduct allowable expenses such as 1/5th repair allowance, property tax, and insurance before computing taxable rental income.

11. How does ATL (Active Taxpayer List) status affect rental tax?

Being on ATL reduces the withholding tax. Non-active taxpayers (non-filers) pay double or higher flat rates to encourage compliance.

12. How do companies pay rental income tax?

Companies pay a flat rate of 15% (filer) or 30% (non-filer) on gross rent. This rate is fixed, regardless of income slabs.

13. Do tenants deduct rental tax at source?

Yes. In Pakistan, tenants deduct tax from the rent they pay to landlords and deposit it with FBR. This tax is adjustable against the landlord’s total liability if they are an active taxpayer.

14. What happens if tax is not paid?

Non-payment of rental income tax may result in penalties, interest, and removal from the Active Taxpayer List, increasing future tax rates.

15. Can I calculate tax for part of a year?

Yes. Using the number of months input in the calculator, you can see the pro-rata rent, tax, and take-home amount for any duration less than a full year.

Need Help With Rental Tax or Filing?

Confused about rental income tax in Pakistan? Need assistance with tax return filing, ATL status, or property tax planning? Get professional guidance and avoid overpaying taxes.

We respond quickly. Confidentiality guaranteed.