Rental Income Tax Calculator
Tax on rental income from immovable property under Section 155 — FBR Tax Year 2026-27
Frequently Asked Questions
Rental income in Pakistan is taxed under Section 155 of the Income Tax Ordinance, 2001, with tenants (or their withholding agents) required to deduct tax at source before rent even reaches the landlord — a distinct calculation from the annual property tax owed regardless of whether the property is rented at all.
How rental income tax is structured
Section 155 applies a slab structure to annual rental income, with different rate schedules for individuals/AOPs versus companies — a company earning the same rental income as an individual landlord faces a different effective rate. Crucially, this tax applies to gross rental receipts under a simplified regime, not net income after every conceivable expense the way business income is taxed, which is why the calculation is more straightforward than a full business return but also doesn't let you deduct maintenance and repair costs the way rental income tax works in some other countries.
A worked example
A landlord renting out a property for Rs 50,000/month (Rs 600,000/year) sits in a different rate bracket than one renting a commercial unit for Rs 500,000/month (Rs 6,000,000/year) — the slab structure means the effective rate rises as annual rental income rises, the same marginal logic as the main income tax slabs.
How this connects to your other tax obligations
Rental income tax is separate from — and paid in addition to — the annual Property Tax (UIPT) charged regardless of whether the property is occupied by the owner or a tenant. If you're weighing whether renting out a property is worth it financially at all, pair this calculator with the Rental Yield Calculator to see the after-tax return, not just the headline rent figure. And if the tenant is a company or a registered withholding agent, remember the tax is typically deducted before you receive the rent — it isn't something you separately calculate and pay afterward in most cases.
Common mistakes
Landlords sometimes report rental income net of expenses the way a business would, not realizing Section 155's simplified regime for individuals works on a gross-receipts slab basis with only limited standard deductions — the calculation is meaningfully different from how you'd approach a business's profit-and-loss statement, and using the wrong framework produces the wrong tax figure.