Pakistan tax, explained.

The annual income tax return must be filed by September 30 each year (for the tax year ending June 30). FBR sometimes extends this deadline; check the Active Taxpayers List notification on fbr.gov.pk for the latest date.

You must file if your annual income exceeds PKR 600,000, you own immovable property worth PKR 2.5M+, you own a vehicle above 1000cc, you are a member of a chamber of commerce or professional body, or you have foreign assets/income. Filing keeps you on the Active Taxpayers List with reduced WHT rates.

The ATL is FBR's public list of compliant taxpayers, updated weekly. Being on ATL gives you reduced withholding tax rates on banking transactions, vehicle registration, property purchases, and utility bills. Non-filers face significantly higher WHT — often 200% of the filer rate.

Register on FBR's IRIS portal (iris.fbr.gov.pk) using your CNIC. File a tax return for the most recent tax year. Once accepted, you appear on the next weekly ATL update. The whole process takes 1-2 weeks if your documentation is in order.

No. The first PKR 600,000 of annual salary is tax-free. Above that, tax applies progressively to each slab. Some allowances (medical up to 10% of basic, conveyance, gratuity within limits) are also exempt.

Yes — medical allowance up to 10% of basic salary is exempt from income tax under Section 13. To qualify, your employment contract must explicitly include medical allowance as a separate component. The employer must also have a documented medical reimbursement policy.

HRA is fully taxable in Pakistan. Unlike India, Pakistan does not provide a tax exemption for housing allowance. Some employers structure compensation through company-leased housing, where the rental value is added to taxable salary.

Gross salary is what your employer pays before deductions. Net (take-home) is what you receive after income tax, EOBI contributions (1% of basic up to PKR 1500), and provident fund deductions. Use our calculator to see exact take-home for any salary level.

IT/IT-enabled service exports are taxed at a final rate of 1% under Section 154A, reduced to 0.25% for PSEB-registered freelancers. The tax is withheld by your bank when foreign payments arrive — no separate filing needed for export income.

Visit techdestination.pseb.org.pk and create an account. Submit your CNIC, proof of address, and business details. Pay the PKR 1,000 registration fee. Once approved (usually 5-10 working days), inform your bank to apply the 0.25% rate to incoming remittances.

Yes, if the funds eventually arrive in your Pakistani bank account. Wise and Payoneer cards used in Pakistan don't qualify because the money never converts to PKR through a Pakistani bank. You need to withdraw to your Pakistani bank account for the income to qualify under Section 154A.

Sole proprietors are taxed under the AOP/non-salaried slabs, starting at 15% above PKR 600k and rising to 45% above PKR 5.6M. They can deduct legitimate business expenses before calculating taxable income.

For high-earning businesses (annual taxable income above PKR 5M), incorporating as a Private Limited Company (29% flat corporate tax) is often more tax-efficient than AOP (up to 45%). But this depends on your dividend distribution plans and personal tax bracket.