Almost every Pakistani pays withholding tax without filing a single form - your bank, your buyer, your employer or the company paying your dividend deducts it and sends it to the Federal Board of Revenue (FBR) on your behalf. The rate you get depends heavily on one thing: whether your name is on the Active Taxpayers List (ATL). This guide sets out the 2026-27 WHT rate card section by section, shows the filer versus non-filer gap, and explains how to claim adjustable tax back. To see the personal cost of not filing, use our filer vs non-filer tool.
How withholding tax works
Withholding tax is a collection mechanism, not a separate tax. A "withholding agent" - a bank, a property registrar, a company, a government department - deducts a percentage of a payment and deposits it against your CNIC or NTN. Most WHT is adjustable, meaning it counts as a credit against your final tax liability when you file your annual return; a minority is final and cannot be reclaimed. The rates live in the First Schedule and the withholding sections (Sections 148 to 236) of the Income Tax Ordinance 2001, updated each year by the Finance Act.
The single biggest variable is filer status. Non-filers - anyone not on the FBR Active Taxpayers List - are charged an increased rate under Rule 1 of the Tenth Schedule, generally 100% higher, and on property the penalty is far steeper. Check your status any time on the FBR ATL before a major transaction.
2026-27 rate card at a glance
The table below lists the major withholding tax sections and their standard filer and non-filer rates for tax year 2026-27. Rates for goods, services and contracts vary by taxpayer type (company versus individual or AOP), so treat these as the common representative figures and confirm your exact rate against the current FBR card.
| Transaction (Section) | Filer | Non-filer |
|---|---|---|
| Dividends - standard (150) | 15% | 30% |
| Profit on debt / bank deposits (151) | 15% | 35% |
| Property purchase - buyer, up to 50M (236K) | 1.5% | 10.5% |
| Property sale - seller, up to 50M (236C) | 4.5% | 11.5% |
| Supply of goods - company (153(1)(a)) | 5% | 10% |
| Services - general, company (153(1)(b)) | 8% | 16% |
| Execution of contracts - company (153(1)(c)) | 7% | 14% |
| Cash withdrawal over 50,000/day (231AB) | Nil | 0.6% |
| Prize on prize bond (156) | 15% | 30% |
Non-filers do not just pay more - they cannot even complete some transactions. Getting on the ATL by filing one return usually pays for itself on the very next property deal or dividend.
Property transactions (236C & 236K)
Property carries the widest filer/non-filer gap in the whole tax system, and both sides of a deal are taxed. The buyer pays advance tax under Section 236K; the seller pays under Section 236C. Rates are tiered by the fair market value of the property and there is now a middle "late filer" category for people who filed after the due date.
| Property value | Filer | Late filer | Non-filer |
|---|---|---|---|
| Buyer - Section 236K | |||
| Up to 50 million | 1.5% | 4.5% | 10.5% |
| 50 - 100 million | 2% | 6.5% | 14.5% |
| Above 100 million | 2.5% | 8.5% | 18.5% |
| Seller - Section 236C | |||
| Up to 50 million | 4.5% | 7.5% | 11.5% |
| 50 - 100 million | 5% | 8.5% | 11.5% |
| Above 100 million | 5.5% | 9.5% | 11.5% |
A non-filer buying a PKR 40 million plot pays 10.5% (PKR 4.2 million) up front, against 1.5% (PKR 600,000) for a filer - a PKR 3.6 million penalty for staying off the ATL. Both 236C and 236K are adjustable, so a filer recovers them against annual tax; a non-filer often cannot use the credit efficiently. For the deeper property picture see our property tax guide.
Banking, cash & profit on debt
Two banking-related withholdings matter most. Profit on debt - the return on your savings account, term deposit or bonds - is deducted at source by the bank under Section 151 at 15% for filers and 35% for non-filers. Where annual profit on debt is modest, this is effectively your final tax on that income; larger amounts fold into normal-rate assessment.
| Banking item (Section) | Filer | Non-filer |
|---|---|---|
| Profit on debt / bank deposit (151) | 15% | 35% |
| Cash withdrawal over 50,000 in a day (231AB) | Exempt | 0.6% |
| Dividend from a company (150) | 15% | 30% |
The cash-withdrawal tax under Section 231AB hits non-filers only: 0.6% on aggregate withdrawals above PKR 50,000 in a single day. Filers on the ATL are not touched by it at all - another quiet cost of not filing.
Why non-filers pay more
The "increased rate" for non-filers is deliberate policy: it pushes people to register and file rather than sit outside the net. Across most sections the non-filer rate is double the filer rate; on property and cash it is several times higher. There is also the late filer tier introduced for property - filing on time, before the due date, keeps you in the cheapest bracket. If you are not yet registered, start with an NTN registration and then file to reach the ATL.
Being a filer is not about a lower income tax bill - the slabs are the same for everyone. It is about avoiding the withholding penalty on every bank transaction, dividend and property deal you make all year.
Adjustable versus final tax - claiming it back
When you file your annual return through FBR IRIS, all your adjustable withholding - property, contracts, most bank profit, vehicle tax - is credited against your total tax liability. If the deducted amount exceeds what you actually owe, the excess is refundable. This is exactly why non-filers lose out: they pay the higher rate and then cannot claim the credit without filing. To work out the liability your withholding is being credited against, run your annual figure through the salary tax calculator before you file.
| Type | What it means | Examples |
|---|---|---|
| Adjustable | Credited against annual tax; excess refundable on filing | Property (236C/236K), contracts (153), cash withdrawal (231AB) |
| Final / minimum | Discharges the liability on that income; not refundable | Prize winnings (156), certain export and dividend income |
Keep every deduction certificate - banks and registrars issue them, and you enter the totals in your return. Our income tax return filing service reconciles your WHT and files the claim so nothing is left on the table.
Withholding tax on property: sections 236C and 236K
Two provisions of the Income Tax Ordinance 2001 bite on most property transactions, and buyers and sellers are frequently unclear which applies to them.
| Section 236C | Section 236K | |
|---|---|---|
| Falls on | The seller, on disposal | The buyer, on purchase |
| Collected by | The registering or transferring authority | The registering or transferring authority |
| Rate depends on | Filer status and the value | Filer status and the value |
| Filer vs non-filer | Non-filers pay materially more | Non-filers pay materially more |
| Adjustable? | Depends on the current regime | Depends on the current regime |
Rates and the adjustability of these deductions are revised by each Finance Act, so no figures are given here - confirm the current position with FBR or your tax adviser before budgeting a transaction. What is stable is the structure: 236C on the seller, 236K on the buyer, and non-filers pay considerably more on both.
The practical consequence is that getting on the active taxpayer list before transacting can save more than the cost of filing a return. See filer vs non-filer, checking the ATL and the full cost of transferring property.
Withholding obligations: a checklist for businesses
Businesses are withholding agents as well as taxpayers, and the obligations are easy to miss because they attach to ordinary payments.
- Salaries - deduct under the applicable slabs and deposit monthly.
- Payments to suppliers of goods - withhold at the applicable rate.
- Payments for services - a different rate typically applies.
- Contracts and execution work.
- Rent paid on premises.
- Commission and brokerage.
- Payments to non-residents, where treaty relief may apply.
- Dividends and profit on debt, where applicable.
For each: check whether the payee is on the active taxpayer list, apply the correct rate, deposit by the due date, file the withholding statements, and issue deduction certificates so the payee can claim credit.
Failure to withhold makes the payer liable for the tax that should have been deducted, plus default surcharge and penalty - the exposure does not sit with the payee. This is the single most expensive withholding mistake a Pakistani business makes, and it accumulates silently across every payment until an audit surfaces it. See FBR audit notices.
Frequently asked questions
What is the WHT rate on bank profit for 2026-27?
Profit on debt under Section 151 is 15% for filers and 35% for non-filers, deducted by the bank when profit is credited.
How much withholding tax does a property buyer pay?
Under Section 236K a filer pays 1.5% up to PKR 50 million, then 2% and 2.5% for higher tiers. Non-filers pay 10.5%, 14.5% and 18.5% respectively.
Why do non-filers pay more withholding tax?
The First Schedule and Tenth Schedule impose an increased rate - generally double, and far higher on property - to push people onto the Active Taxpayers List.
What is the dividend withholding tax rate?
The standard Section 150 rate is 15% for filers and 30% for non-filers. Some mutual funds and companies carry different rates - check your dividend voucher.
Can I get my withholding tax back?
Yes, if it is adjustable. File your annual return, credit the WHT against your liability, and any excess is refunded. Final taxes such as prize winnings are not refundable.
Is cash withdrawal taxed in Pakistan?
Only for non-filers - 0.6% under Section 231AB on daily cash withdrawals above PKR 50,000. Filers are exempt.
What is the difference between section 236C and 236K?
Section 236C is collected from the seller on disposal of property; section 236K is collected from the buyer on purchase. Both are collected by the registering authority and both charge non-filers materially more.
Does filer status affect property transaction tax?
Considerably. Non-filers pay materially more under both 236C and 236K, so getting onto the active taxpayer list before transacting can save more than the cost of filing a return.
What happens if my business fails to withhold tax?
The payer becomes liable for the tax that should have been deducted, plus default surcharge and penalty. The exposure sits with the payer, not the payee, and accumulates silently until an audit.
Sources & official references
- Income Tax Ordinance 2001 the statute governing income tax in Pakistan
- FBR income tax, sales tax and withholding regimes
- FBR IRIS the online portal for registration and returns