ISLAMABAD – The Federal Board of Revenue (FBR) is the competent authority to collect withholding tax under Section 155 on the rent of immovable property for individuals, associations of persons (AOPs), and companies.
According to the latest schedule for tax year 2025-26, no tax will apply where the gross annual rent does not exceed Rs300,000.
For rent exceeding Rs300,000 but not more than Rs600,000, a tax of 5 percent will be charged on the amount exceeding Rs300,000.
Where the gross rent exceeds Rs600,000 but remains below Rs2,000,000, the tax will be Rs15,000 plus 10 percent of the amount exceeding Rs600,000.
For rent above Rs2,000,000, a tax of Rs155,000 plus 25 percent of the amount exceeding Rs2,000,000 will be applicable.
For companies, the withholding tax rate has been set at 15 percent, while the maximum rate under the Tenth Schedule can reach up to 30 percent.
These rates are governed under Rule 1 of the Tenth Schedule of the Income Tax Ordinance and are applicable to rental income from immovable properties across Pakistan.
The Federal Board of Revenue (FBR) is Pakistan’s apex authority responsible for collecting federal taxes and enforcing fiscal laws.
Operating under the Ministry of Finance, the FBR oversees income tax, sales tax, and customs duties across the country. Its functions include formulating tax policies, ensuring compliance, combating tax evasion, and facilitating trade through efficient customs operations.
The FBR’s jurisdiction extends to all federal territories, ports, and border points, where it regulates imports, exports, and revenue collection.
Through modernization, digitalization, and taxpayer facilitation initiatives, the FBR aims to strengthen Pakistan’s revenue system and promote economic transparency.
