Tax on Rental Income in Pakistan
Rental income is taxed as a separate block under Section 15. This page gives you the slab view, withholding context, and the most common filing mistakes landlords make.
Rental tax essentials at a glance
Charging section
Section 15
Withholding section
Section 155
First tax-free band
Up to PKR 300,000 annually
Top slab on this page
25% above PKR 2,000,000
Expense deduction
Repairs are not generally deducted like a normal business expense here
Best next step
Match annual rent with tenancy agreement and WHT evidence
Annual rental income slab rates
Fully exempt - no tax on rental income up to this threshold for individuals and AOPs.
First slab and applies only to the excess.
A common band for urban landlords.
Higher-end residential or commercial rental flows.
Who deducts what, and when
- Companies as tenants can withhold under Section 155 and deposit it monthly.
- Individual and AOP tenants usually do not withhold, so the landlord reconciles it directly in the annual return.
- Filer landlords can claim withheld tax in the return, while non-filers face a much weaker withholding position.
- Sub-let income can trigger a different treatment and should be checked carefully before filing.
Common rental-income filing mistakes
- 01Treating monthly rent as annual rent and applying the slab incorrectly.
- 02Not collecting Section 155 withholding evidence from a corporate tenant.
- 03Assuming repair costs can always be deducted from gross rent.
- 04Forgetting to include rental income in the annual return and wealth trail.
Keep the property tax path connected
Transaction context
Property tax guide
Move from rental income into buyer, seller, CGT, and property withholding rules.
Annual reporting
File your tax return
See where Section 15 income and Section 155 withholding fit in the return.
Withholding impact
Filer vs non-filer
Understand why ATL status still matters around property-linked withholding and cash flows.
Common questions
Is rental income taxable in Pakistan?+
Yes. Rental income from immovable property is taxed under Section 15 of the Income Tax Ordinance 2001 as a separate block of income.
How much tax do I pay on rental income in Pakistan?+
There is no tax up to PKR 300,000 per year for the relevant category shown here. Above that, the slab rate rises as annual rent increases.
Who deducts withholding tax on rent?+
Companies, government bodies, and other prescribed persons can deduct withholding tax under Section 155. Many individual tenants do not, so the landlord settles it directly in filing.
Are property repairs deductible from rental income?+
Generally, this rental block does not work like a normal business profit-and-loss statement, so repairs are not simply deducted in the same way.
Is rental income from commercial property taxed differently?+
The core slab framework is similar, but commercial arrangements more often involve corporate tenants and therefore more withholding documentation.