Withholding tax is one of the most important parts of Pakistan’s income tax system. Whether you receive payment for goods or services, earn profit from a bank account, receive rent or dividends, enter into a contract, purchase property, or carry out certain other transactions, tax may be deducted or collected at source.
The FBR Withholding Tax Rates 2026-27 apply for Tax Year 2027 and include important changes introduced through the Finance Act 2026. FBR’s current official Withholding Tax Rate Card is updated up to 30 June 2026 under the Finance Act 2026.
This guide explains the major withholding tax rates for Tax Year 2027, the difference between ATL and non-ATL taxpayers, and some of the most commonly encountered withholding provisions in simple language.
Table of Contents
What Is Withholding Tax?
Withholding tax is tax deducted or collected at the time a specified economic transaction takes place.
Instead of waiting until the taxpayer files an annual Income Tax Return, the law requires certain persons or organizations to deduct or collect tax when making or receiving particular payments.
FBR describes withholding tax as an advance payment of tax deducted during economic activities specified under different provisions of the Income Tax Ordinance, 2001 and Sales Tax Act, 1990.
Importantly, every withholding tax does not receive identical treatment. Depending on the relevant provision, the tax may be adjustable, minimum or final in the hands of the taxpayer.
ATL vs Non-ATL Withholding Tax
Your status on the Active Taxpayers List (ATL) can have a major effect on withholding tax.
For many transactions, a taxpayer appearing on ATL receives a substantially lower withholding rate, while a person who is not on ATL can face a higher rate.
For example, under Section 153, a company supplying ordinary goods generally faces a 5% ATL rate, while the corresponding non-ATL rate is 10%.
For an individual or AOP supplying ordinary goods, the corresponding rates are generally 5.5% for ATL and 11% for non-ATL.
If you are unsure about your status, read our guide on Active Taxpayer vs Non-Active Taxpayer in Pakistan.
FBR Withholding Tax Rates 2026-27 at a Glance
The following table summarizes some of the most commonly encountered rates for Tax Year 2027.
| Transaction | Section | ATL Rate | Non-ATL Rate |
|---|---|---|---|
| Ordinary supply of goods – Company | 153(1)(a) | 5% | 10% |
| Ordinary supply of goods – Individual/AOP | 153(1)(a) | 5.5% | 11% |
| Toll manufacturing – Company | 153(1)(a) | 9% | 18% |
| Toll manufacturing – Individual/AOP | 153(1)(a) | 11% | 22% |
| General services | 153(1)(b) | 14% | 28% |
| Specified services | 153(1)(b) | 7% | 14% |
| IT & IT-enabled services | 153(1)(b) | 4% | 8% |
| Independent professional services | 153(1)(b) | 15% | 30% |
| General contracts – Company | 153(1)(c) | 7.5% | 15% |
| General contracts – Other cases | 153(1)(c) | 8% | 16% |
| Bank/financial institution profit on account or deposit | 151 | 20% | 40% |
| General dividend – commonly applicable category | 150 | 15% | 30% |
| Export of goods | 154 | 1.25% | 2.5%* |
| Property sale | 236C | 2.75% | 11.5% |
| Property purchase | 236K | 1.25% | Higher rates depending on property value |
| Social media platform revenue | 154B | 5% | Subject to applicable legal treatment |
*The precise rate and treatment can depend on the particular export provision and taxpayer status. Always check the relevant section of the current FBR rate card before applying a rate to an actual transaction.
The official FBR rate card contains many additional categories and exceptions, so this table should be treated as a practical summary rather than a replacement for the Income Tax Ordinance.
Section 153 – Withholding Tax on Goods, Services and Contracts
Section 153 is one of the most commonly encountered withholding tax provisions for businesses, professionals, suppliers and contractors.
It broadly covers:
- Section 153(1)(a): Supply of goods
- Section 153(1)(b): Services
- Section 153(1)(c): Contracts
The applicable rate depends on the nature of payment, taxpayer category and ATL status.
Withholding Tax on Supply of Goods – Section 153(1)(a)
For ordinary supplies, the Tax Year 2027 rates generally differ between companies and individuals/AOPs.
Ordinary Goods
| Supplier | ATL | Non-ATL |
|---|---|---|
| Company | 5% | 10% |
| Individual / AOP | 5.5% | 11% |
Toll Manufacturing
| Supplier | ATL | Non-ATL |
|---|---|---|
| Company | 9% | 18% |
| Individual / AOP | 11% | 22% |
Certain goods and sectors have special rates.
For example, the current Tax Year 2027 rate information includes a 1.5% ATL and 3% non-ATL rate for specified supplies such as rice, cotton seed or edible oils under the relevant conditions.
Therefore, businesses should not automatically apply the ordinary 5% or 5.5% rate to every supply.
Withholding Tax on Services – Section 153(1)(b)
Services received an important revision under the Finance Act 2026.
FBR’s Budget 2026-27 salient features specifically state that the withholding tax structure on services was revised, including changes to specified services and separate treatment for independent professional services.
Major Service Rates for Tax Year 2027
| Service Category | ATL | Non-ATL |
|---|---|---|
| General Services | 14% | 28% |
| Specified Services | 7% | 14% |
| IT & IT-enabled Services | 4% | 8% |
| Independent Professional Services | 15% | 30% |
| Electronic/Print Media Advertising Services | 1.5% | 3% |
| Terminal/Port Services | 12% | 24% |
The correct classification of a service is extremely important because different categories can have substantially different withholding rates.
Specified Services – 7% ATL Rate
For Tax Year 2027, certain specified services are subject to a 7% ATL rate, with the non-ATL rate generally doubled to 14%.
Depending on the statutory classification, these can include categories such as transportation, freight forwarding, courier services, manpower outsourcing, security services, warehousing, certain engineering or architectural services, travel and tour services and other specified activities.
Because the list is detailed and classification matters, businesses should verify the exact nature of their service against the current FBR rate card and Income Tax Ordinance before deducting tax.
IT and IT-Enabled Services
Qualifying IT and IT-enabled services under Section 153(1)(b) continue to receive separate treatment.
Rate
ATL: 4%
Non-ATL: 8%
Relevant services may include qualifying activities such as software development, web development, web design, software maintenance, network design, cloud-related services and certain IT-enabled activities, subject to the statutory definition and applicable conditions.
Businesses should confirm that their particular service actually falls within the statutory IT or IT-enabled services definition before using the reduced rate.
Independent Professional Services
Finance Act 2026 separately identifies certain independent professional services.
The Tax Year 2027 rate is:
ATL: 15%
Non-ATL: 30%
The category includes independently working professionals such as:
- Doctors
- Lawyers
- Architects
- Accountants
- Software engineers
- Software developers
where the statutory conditions for the category are satisfied.
This distinction is important because an independent professional should not automatically assume that the general or reduced service rate applies.
Withholding Tax on Contracts – Section 153(1)(c)
Payments under contracts can also attract withholding tax.
For general contracts:
| Recipient | ATL | Non-ATL |
|---|---|---|
| Company | 7.5% | 15% |
| Other cases | 8% | 16% |
Certain specialized contracts or payments may carry different rates.
For example, payments relating to sports persons and particular services can fall under separate rules. Therefore, the nature of the agreement should be reviewed before applying a rate.
Example: Withholding Tax on Services
Suppose an ATL taxpayer provides a general service and receives a gross payment of:
Rs. 500,000
If the applicable rate is 14%:
Rs. 500,000 × 14% = Rs. 70,000
The payer would deduct:
Rs. 70,000
and the service provider would receive:
Rs. 430,000
before considering any other applicable deductions or taxes.
The Rs. 70,000 withholding amount should be properly reported against the taxpayer.
Example: Withholding Tax on Supply of Goods
Suppose an ATL company supplies ordinary goods worth:
Rs. 1,000,000
Applicable rate:
5%
Calculation:
Rs. 1,000,000 × 5% = Rs. 50,000
The withholding agent would deduct Rs. 50,000, subject to the relevant legal conditions and thresholds.
Profit on Debt and Bank Deposits – Section 151
Withholding tax also applies to profit on debt.
For Tax Year 2027, the rate can vary according to the nature of the investment or deposit.
For profit paid by a banking company or financial institution on an account or deposit, the current rate card reflects:
ATL: 20%
Non-ATL: 40%
Other profit-on-debt categories may carry different rates. For example, certain other cases are subject to 15% for ATL and 30% for non-ATL, while Sukuk arrangements have their own rates and conditions.
Therefore, the type of account or investment must be identified before determining the applicable withholding rate.
Withholding Tax on Dividend – Section 150
Dividend income can also attract withholding tax.
A commonly applicable general dividend category carries:
ATL: 15%
Non-ATL: 30%
However, there is no single rate for every dividend.
For example, particular mutual funds, REIT-related distributions and companies falling within special tax situations may have different rates.
Some mutual-fund dividend categories can carry an ATL rate of 25%, while specific REIT-related distributions may receive different treatment.
Always identify the source and type of dividend before applying a rate.
Withholding Tax on Rent – Section 155
Rent of immovable property is another important withholding area.
For an individual or AOP, the withholding mechanism uses slabs.
Individual / AOP
| Annual Gross Rent | ATL Rate |
|---|---|
| Up to Rs. 300,000 | Nil |
| Rs. 300,001 – Rs. 600,000 | 5% of amount exceeding Rs. 300,000 |
| Rs. 600,001 – Rs. 2,000,000 | Rs. 15,000 + 10% of amount exceeding Rs. 600,000 |
| Above Rs. 2,000,000 | Rs. 155,000 + 25% of amount exceeding Rs. 2,000,000 |
For a company, the rate is generally:
ATL: 15%
Non-ATL: 30%
The non-ATL consequences for individuals and AOPs should be checked against the current rate card because the applicable Tenth Schedule treatment can increase the tax.
Withholding Tax on Imports – Section 148
Import withholding rates depend on the classification of the imported goods.
Examples from the Tax Year 2027 rate structure include:
| Import Category | ATL | Non-ATL |
|---|---|---|
| Goods in Part I of Twelfth Schedule | 1% | 2% |
| Goods in Part II | 2% | 4% |
| Part II goods – Commercial Importer | 3.5% | 7% |
| Goods in Part III | 5.5% | 11% |
The exact classification under the Twelfth Schedule is therefore essential when determining tax at the import stage.
Withholding Tax on Exports – Section 154
The Finance Act 2026 changed the withholding rate relating to exports.
For relevant export-of-goods provisions, the rate increased from 1% to 1.25% for Tax Year 2027.
Different provisions apply to exports of goods, export services and particular export arrangements, so exporters should verify the applicable section rather than applying one rate universally.
Property Purchase and Sale – Sections 236C & 236K
Property transactions have also changed significantly for Tax Year 2027.
Seller – Section 236C
For an ATL seller:
2.75% of gross consideration
For a non-ATL seller:
11.5%
Buyer – Section 236K
For an ATL buyer:
1.25% of fair market value
For non-ATL buyers, the rate depends on property value and can rise to 10.5%, 14.5% or 18.5%.
For a detailed explanation and calculation examples, read our complete guide on FBR Tax on Property in Pakistan 2026-27.
The Finance Act 2026 replaced the previous slab-based ATL property rates with uniform rates of 2.75% for sellers and 1.25% for buyers.
Withholding Tax on Cash Withdrawal
Tax can also apply when a person who is not appearing on the Active Taxpayers List makes cash withdrawals exceeding the prescribed daily threshold.
This is particularly relevant to non-ATL account holders.
Because the provision, threshold and rate have been amended over time, taxpayers should check the current Tax Year 2027 rate card before making decisions based on an older tax chart.
For the applicable rate, Rs. 50,000 aggregate daily threshold, ATL treatment and practical calculation examples, read our Tax on Cash Withdrawal in Pakistan 2026-27 – Non-Filer Guide.
Prize Bonds and Winnings – Section 156
Withholding tax also applies to prize bonds and certain winnings.
Common Tax Year 2027 rates include:
Prize Bonds
ATL: 15%
Non-ATL: 30%
Certain other prizes, winnings, lotteries and raffles can carry:
ATL: 20%
Non-ATL: 40%
The exact rate depends on the nature of the prize or winning.
New Withholding Tax on Social Media Income
One of the notable Finance Act 2026 changes is the introduction of withholding tax on revenues received by digital content creators and social media influencers from platforms such as:
- YouTube
- TikTok
- Other similar digital platforms
FBR’s Budget 2026-27 salient features confirm the introduction of this withholding regime, with banking and financial institutions responsible for deduction on qualifying receipts.
The applicable rate is 5% on qualifying social-media revenue.
For a resident person, the tax is treated as minimum tax, while for a non-resident person without a permanent establishment in Pakistan, it is treated as final tax.
Pakistani YouTubers, TikTok creators, influencers and other digital content creators should distinguish platform revenue from sponsorships, brand deals and freelance income because different tax provisions may apply. For a detailed explanation of Section 154B and the current tax treatment, read our Social Media Income Tax in Pakistan 2026-27 – Easy Guide.
Who Is Responsible for Deducting Withholding Tax?
The person legally required to deduct or collect withholding tax is commonly referred to as the withholding agent.
Depending on the section, withholding agents can include:
- Federal and provincial government bodies
- Companies
- Banking companies
- Associations of persons
- Certain prescribed businesses
- Import and customs authorities
- Authorized dealers
- Other prescribed persons
FBR maintains section-wise information identifying major withholding agents.
The withholding agent must determine the correct provision, applicable rate and taxpayer status before deducting the tax.
Responsibilities of a Withholding Agent
A withholding agent should ensure that:
- Tax is deducted or collected at the correct rate.
- The amount is deposited with the Federal Government as required.
- The correct CNIC or NTN is used.
- The correct tax section is selected.
- Required withholding statements are filed.
- Proper records are maintained.
FBR states that Sections 165 and 165C require withholding agents to file withholding statements at the prescribed time.
FBR also notes that failure to correctly deduct or deposit tax can create liability under Sections 161 and 162, while non-filing of required statements may attract penalty proceedings under Section 182.
Is Withholding Tax Final or Adjustable?
A common misconception is that every amount deducted as withholding tax represents the taxpayer’s final tax liability.
That is not always correct.
Depending on the relevant section, withholding tax may be:
Adjustable Tax
The amount can generally be adjusted against the taxpayer’s overall income tax liability when filing the Income Tax Return.
Minimum Tax
The amount may operate as a minimum tax under the applicable provision, subject to the law.
Final Tax
In certain cases, the deduction represents final tax on that particular income or transaction.
FBR specifically states that withholding tax treatment varies by section and can be final in some cases and adjustable against final liability in others.
Therefore, taxpayers should check the legal treatment of the particular section instead of assuming that every withholding deduction works the same way.
How to Check Withholding Tax in FBR IRIS
Taxpayers should regularly check whether tax deducted against their CNIC or NTN has been properly reported.
FBR states that information relating to tax deductions under most withholding sections can be viewed through the taxpayer’s IRIS account, including through the Tax Payments area under MIS.
If you have trouble accessing your account, see our FBR IRIS Login, Forgot Password & Account Recovery Guide.
When filing your annual return, compare the withholding tax records in IRIS with your own:
- Bank statements
- Salary certificates
- Tax deduction certificates
- Payment receipts
- Invoices
- Contract records
- Property documents
- Other supporting evidence
If tax was deducted but does not appear correctly in IRIS, investigate the discrepancy before claiming the amount in your return.
Why ATL Status Matters
For many withholding provisions, non-ATL rates are substantially higher.
For example:
Ordinary goods supplied by a company:
ATL 5% vs Non-ATL 10%
General services:
ATL 14% vs Non-ATL 28%
Independent professional services:
ATL 15% vs Non-ATL 30%
General company contracts:
ATL 7.5% vs Non-ATL 15%
Bank deposit profit:
ATL 20% vs Non-ATL 40%
The financial impact can therefore become significant for taxpayers carrying out frequent or high-value transactions.
If you are currently outside the tax system, see How to Become a Filer in Pakistan.
Common Withholding Tax Mistakes
One common mistake is using a previous year’s rate card. Withholding rates can change through each Finance Act.
Another is applying the general Section 153 service rate to every service without first determining whether the payment relates to a specified service, IT service, independent professional service or another special category.
Businesses can also make errors by failing to check ATL status at the relevant time, selecting the wrong tax section, using an incorrect CNIC or NTN, or failing to deposit deducted tax properly.
Finally, taxpayers should not assume that a tax deduction automatically appears correctly in their annual Income Tax Return. The withholding records should be reviewed and reconciled.
Frequently Asked Questions
What are the FBR Withholding Tax Rates 2026-27?
The rates vary according to the transaction and relevant section of the Income Tax Ordinance. FBR’s official Tax Year 2027 rate card is updated up to 30 June 2026 under the Finance Act 2026.
What is the withholding tax rate on goods?
For ordinary supplies under Section 153(1)(a), an ATL company generally faces a 5% rate, while an ATL individual or AOP generally faces 5.5%. Non-ATL rates are generally 10% and 11%, respectively. Special goods and sectors can have different rates.
What is the withholding tax rate on services in 2026-27?
The general ATL service rate is 14%, but specified services may be taxed at 7%, qualifying IT/IT-enabled services at 4%, and qualifying independent professional services at 15%. Different rates and conditions apply to other categories.
What is the withholding tax rate on contracts?
For general contracts, the ATL rate is generally 7.5% for a company and 8% in other cases. The corresponding non-ATL rates are generally 15% and 16%.
Is withholding tax refundable?
It depends on the legal treatment of the particular withholding provision and the taxpayer’s final liability. Where tax is adjustable and the total eligible tax paid exceeds the final liability, a refund may potentially arise subject to the Income Tax Ordinance and FBR procedure.
Can I check withholding tax in IRIS?
Yes. FBR states that withholding information under most sections can be accessed by taxpayers through FBR systems, including the Tax Payments information available through IRIS.
Are non-filer withholding rates always double?
No. Many provisions apply higher or doubled rates to persons not appearing on ATL, but this should not be treated as a universal rule. Some sections have their own specific non-ATL rates and conditions.
Is FBR’s withholding tax rate card legally binding?
FBR itself describes the rate card as a facilitation resource. The Income Tax Ordinance, 2001, as amended, prevails if there is any contradiction or error. The current Ordinance published by FBR is amended up to 30 June 2026.
Final Words
The FBR Withholding Tax Rates 2026-27 cover a wide range of transactions, and there is no single withholding rate that applies to everyone.
For Tax Year 2027, important areas include goods, services, contracts, profit on debt, dividends, rent, imports, exports, property transactions and the newly introduced withholding regime for social media income.
The most important practical rule is to identify:
the correct transaction → relevant tax section → taxpayer category → ATL status → applicable Tax Year 2027 rate.
Taxpayers and withholding agents should use FBR’s latest rate card rather than relying on an old chart or social media post.
Official FBR Withholding Tax Rate Card – Tax Year 2027
The official Income Tax Ordinance should be consulted where the classification, tax treatment or application of a particular provision is uncertain.
Disclaimer
This article is for general informational and educational purposes only and should not be considered professional tax or legal advice. Withholding tax rates, classifications, exemptions, thresholds and FBR procedures may change or depend on the particular facts of a transaction. Although TaxInfo.pk aims to provide accurate and updated information, taxpayers and withholding agents should verify the applicable provision from the latest FBR Withholding Tax Rate Card and the Income Tax Ordinance, 2001, or consult a qualified tax professional where necessary.
