Tax Guide 2026-2027

Key Changes in Finance Act 2026-2027

✅Salary surcharge withdrawn
⬇️Super Tax eased to 8% (above Rs. 500M)
🗑️Sec 7E & CVT repealed
📉Property tax: flat rates (1.25% / 2.75%)

1. Salaried Individuals —
Section 149

✔️ Good news The 9% surcharge on salaried individuals has been withdrawn.
(The 9% surcharge still applies to AOPs and non-salaried individuals with taxable income above Rs. 10M.)

Salary Tax Slabs (2026–27)

Annual Income (Rs.)	Tax
Up to 600,000	0%
600,001 – 1,200,000	1% of the amount exceeding 600,000
1,200,001 – 2,200,000	6,000 + 11% over 1,200,000
2,200,001 – 3,200,000	116,000 + 20% over 2,200,000
3,200,001 – 4,100,000	316,000 + 25% over 3,200,000
4,100,001 – 5,600,000	541,000 + 29% over 4,100,000
5,600,001 – 7,000,000	976,000 + 32% over 5,600,000
Above 7,000,000	1,424,000 + 35% over 7,000,000

Pensioners (under age 70): same slabs; no surcharge.

2. AOPs & Non-Salaried Individuals — Section 18

Taxable Income	Tax Rate	Surcharge
Up to Rs. 10 Million	Standard slab	0%
Above Rs. 10 Million	Standard slab	9% (on tax amount)

3. Companies & Super Tax — Section 4C

🔄 Changed Super Tax now applies only where taxable income exceeds Rs. 500 million.
Rate: 8% for non-bank companies (on income above the threshold).
⚠️ Banks, E&P companies, and fertiliser manufacturers remain on the older, higher schedule.

4. Property — Purchase & Sale

Transaction	Section	New Rate (Filers)	Notes
Purchase	236K	1.25% flat	Previously 1.5%–2.5% slab. FCVA/NRVA buyers: 0% (subject to conditions).
Sale	236C	2.75% flat	Three slabs abolished. Late-filer enhancements (Tenth Schedule) also abolished.

5. Capital Gains — Immovable Property

• Acquired before 1 July 2024: Unchanged (old regime).
• Acquired on/after 1 July 2024: Taxable under Normal Tax Regime (capped at 15% for ATL persons).

6. Income from Property (Rent) — Section 155

Rental income tax rates remain unchanged from the previous tax year. Standard deduction of 20% (or actual repairs) applies. Rate for filers remains 10% of gross rent (subject to applicable slabs).

7. Funds / REITs & Telephone / Internet

• REITs: Tax rates remain unchanged as per the REIT regulations.
• Telephone / Internet: Withholding tax rates on phone/internet bills remain unchanged (standard rates apply).

8. Dividend & Sukuk — Section 150

• Dividend (Sec 150): Tax rates remain unchanged (15% for filers, 30% for non-filers on cash dividends).
• Return on Sukuk: Rates remain unchanged. Taxed similarly to profit on debt.

9. Securities & Investments — Section 37A

• Acquired before 1 July 2025: Unchanged.
• Acquired on/after 1 July 2025: Non-ATL persons face 100% enhanced rate (restored).

10. Withholding Tax — Services, Goods & Contracts

Category	Section	Rate / Status
Services (IT, transport, freight, courier, manpower, hotel, security, software, warehousing, engineering, telecom, car rental, inspection, training, travel, REIT management)	153(1)(b)	IT: 4%; Independent professionals: 15% (unchanged)
Sale of Goods	153(1)(a)	Unchanged
Contracts	153(1)(c)	Unchanged

11. Profit on Debt & Debt Securities — Section 151 / 151A

• Sec 151 (Profit on Debt): 20% (unchanged).
• Sec 151A (Debt Securities): Raised from 15% → 20% (to match the profit-on-debt rate).

12. Advance Tax on Motor Vehicles

Rates apply to the value of the vehicle at the time of purchase, registration, or transfer. The slab structure remains unchanged from the previous year.

13. E-Commerce & Exports

Category	Change
E-commerce (Sec 6A)	Now adjustable (not final) for turnover > Rs. 200M.
Exports (Sec 154 & 154A)	1% advance tax removed; WHT rises 0.25% → net 0.75% saving for goods exporters.

14. Imports & Mobile Phones

• Withholding on Imports (Sec 148): No change for TY 2026-27.
• Import of Mobile Phones: Rates remain unchanged.

15. Advance Tax — Builders / Developers — Section 147(5C)

Applicable to projects in major cities. Rates remain unchanged.

Other major cities covered: Hyderabad Sukkur Multan Faisalabad Rawalpindi Gujranwala Sahiwal Sialkot Bahawalpur Peshawar Mardan Abbottabad Quetta

16. Payments to PE of Non-Residents & SME Rates

• Payments to PE of Non-Residents (Sec 152(2A) / Sec 6): Rates remain unchanged.
• SME Rates & Builders/Developers (Sec 7F): Unchanged. SME turnover threshold and reduced rates remain applicable as per existing rules.

17. Electricity Consumption — WHT

Withholding tax on electricity bills remains unchanged. Standard rates apply based on consumption slabs for commercial and industrial users.

18. Miscellaneous Withholding Taxes

• Sec 236Y: Cut from 5% to 0.5%.
• Social Media Revenue (NEW Sec 154B): 5% — resident: minimum tax; non-resident: final tax.
• Life Insurance: Early payouts taxed; exempt after 7 years or on death/disability.
• Foreign TV-drama WHT (Sec 236CA): Abolished.
• CVT on foreign assets: Abolished.

19. Minimum Tax (Section 113) — Concessional List @ 0.5%

✅ Still included

• Packaged food
• Fertiliser
• Locally-made mobiles
• Sugar
• Electronics

❌ Dropped

• Cement
• Steel
• Edible oil

20. Key Changes — Finance Act 2026 (1 of 2)

• Salary surcharge — Withdrawn for salaried individuals.
• Super Tax — Eased to 8%, only above Rs. 500M.
• Sec 7E & CVT — Omitted (deemed-income & foreign-asset tax repealed).
• Property Purchase (236K) — Single 1.25% flat rate; FCVA buyers: 0%.
• Property Sale (236C) — Single 2.75% flat rate; late-filer enhancements abolished.
• Capital Gains (Immovable) — Acquired after 1 Jul 2024 taxed under Normal Tax Regime (capped at 15%).

21. Key Changes — Finance Act 2026 (2 of 2)

• Securities (37A) — Non-ATL: 100% enhanced rate restored (acquired on/after 1 Jul 2025).
• Debt Securities (151A) — Raised from 15% to 20%.
• E-commerce (6A) — Now adjustable (turnover > Rs. 200M).
• Exports (154/154A) — 1% advance removed; net 0.75% saving for goods exporters.
• Social Media Revenue (154B) — New 5% tax (resident: minimum; non-resident: final).
• Miscellaneous — Sec 236Y cut to 0.5%; Foreign TV-drama WHT & CVT abolished.

22. Non-ATL (Non-Filer) Restrictions

⚠️ Strict Effective 1 July 2026, non-filers face:

• Activity restrictions under Sec 114C.
• Enhanced withholding rates on securities, property, and services.

Winners & Losers

Winners

• Salaried individuals (surcharge gone)
• Exporters (net 0.75% saving)
• FCVA/NRVA property buyers (0% on purchase)
• Builders/developers (some relief)

Losers

• Non-filers (higher rates & restrictions)
• Cement & steel sectors (removed from 0.5% list)
• Non-ATL securities holders (100% enhanced rate)

📌 Disclaimer: This summary is based on the Finance Act 2026 and publicly available interpretations. Tax rates and provisions are subject to official notification and individual circumstances.

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