Archive September 2020

Withholding tax rates for income from property

Withholding tax rates for income from property

The withholding tax on rental income from the immovable property for the tax year 2021 has been updated by the Federal Board of Revenue (FBR).


After incorporating amendments to the Income Tax Ordinance 2001 enacted by the Finance Act 2020, the FBR updated the Withholding Tax Card for 2020-2021.

The FBR said that under Section 155 of the Income Tax Ordinance 2001, every designated person would gather/deduct withholding tax from the real estate of immovable property on payment of rent at that time.

According to Section 155: Income from property

A): Following are withholding tax for individuals or AOP


  • If the total amount of rent does not exceed Rs. 200,000: Tax rate will be zero.

  • If the total amount of rent is more than Rs. 200,000 but does not exceed Rs. 600,000 then withholding tax would be 5% of the total amount exceeding Rs. 200,000

  • If the total amount of rent exceeds Rs, 600,000 but does not exceed Rs, 1,000,000 then Rs, 20,000 plus 10 percent withholding tax of the total amount exceeding Rs, 600,000.

  • If the total amount of rent exceeds Rs, 1,000,000 but does not exceed Rs, 2,000,000 then Rs,60,000 plus 15 percent withholding tax of the total amount exceeding Rs, 1,000,000

  • If the total amount of rent exceeds Rs, 2,000,000 but does not exceed Rs. 4,000,000 then Rs, 210,000 plus 20 percent withholding tax of the total amount exceeding Rs, 2,000,000

  • If the total amount of rent exceeds Rs.4,000,000 but does not exceed Rs. 6,000,000 then Rs.610,000 plus 25 percent withholding tax of the total amount exceeding Rs.4,000,000

  • If the total amount of rent exceeds Rs.6,000,000 but does not exceed Rs. 8,000,000 then Rs.1,110,000 plus 30 percent withholding tax of the total amount exceeding Rs.6,000,000

  • If the total amount of rent exceeds Rs.8,000,000 then Rs.1,710,000 plus 35 percent withholding tax of the total amount exceeding Rs.8,000,000

B): Withholding tax for companies is 15 percent. The tax will be as per the requirement as compared to the total tax liability.