Rent withholding tax in Pakistan: section 155
Section 155 governs tax deducted from annual rent of immovable property, including rent of furniture, fixtures, and related services, deducted by the person making the rental payment.
Company recipients
Where the recipient of rent is a company: 15% for Active Filers, 30% for Non-Filers, adjustable.
Individual and other taxpayers – progressive slabs
| Up to Rs. 300,000 | 0% |
|---|---|
| Rs. 300,000 to Rs. 600,000 | 5% |
| Rs. 600,000 to Rs. 2,000,000 | Rs. 15,000 plus 10% of the amount exceeding Rs. 600,000 |
| Above Rs. 2,000,000 | Rs. 155,000 plus 25% of the amount exceeding Rs. 2,000,000 |
This withholding is adjustable, meaning it's reconciled against the property owner's actual tax liability when they file their annual return.
What this means in practice
If you own rental property, the tenant or the person making the rental payment is generally responsible for deducting this tax before paying you. If you're the one making rental payments on behalf of a business, you're responsible for withholding and depositing this tax correctly.
Our rent calculator already reflects these progressive slabs, letting you estimate the exact tax due on a given annual rent figure. If you need help with the withholding side as a payer, or with reconciling rental income as a property owner, contact our team.