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May 18, 2015

Rental income tax is
quite low in Pakistan


INDIVIDUAL TAXATION

Nonresident individuals are taxed only on their Pakistani-sourced income. Married couples are taxed separately, joint taxation is not allowed in Pakistan.

The tax year is the 12-month period ending on 30 June and is denoted by the calendar year in which it ends. The tax year 2015 is from 01 July 2014 up to 30 June 2015. The tax year 2016 is from 01 July 2015 up to 30 June 2016.

INCOME TAX

RENTAL INCOME
Income from property, including rental income, is taxed at progressive rates. The tax base is the gross rent.

INCOME TAX 2014 ON PROPERTY INCOME

TAXABLE INCOME, PKR(US$)
TAX RATE
Up to 1,000,000 (US$9,804)
0%
1,000,000 – 2,000,000 (US$19,608)
10%
2,000,000 – 3,000,000 (US$29,412)
12.50 %
3,000,000 – 4,000,000 (US$39,216)
15%
Over 4,000,000 (US$39,216)
17.50%
Source: Global Property Guide

INCOME TAX 2013 ON PROPERTY INCOME

TAXABLE INCOME, PKR(US$)
TAX RATE
Up to 150,000 (US$1,471)
0%
150,000 – 400,000 (US$3,922)
5%
400,000 – 1,000,000 (US$9,804)
7.50%
1,000,000 – 2,000,000 (US$19,608)
10%
2,000,000 – 3,000,000 (US$29,412)
12.50%
3,000,000 – 4,000,000 (US$39,216)
15%
Over 4,000,000 (US$39,216)
17.50%
Source: Global Property Guide

CAPITAL GAINS
Capital gains realized by individuals from selling real property are not taxed in Pakistan unless sales of real property are part of the individual’s business.

Capital gains in connection with a taxpayer’s business activities are considered as business income and taxed accordingly.


PROPERTY TAX


Property Tax

Property tax is a provincial tax levied on the value of property. It is generally levied at a flat rate of 10% but the tax rates vary, depending on the province.

Property tax is levied at progressive rates in the Punjab province.

In the province of Sindh, property tax is levied at a flat rate of 20% on the annual rental value of the land and building.

Capital Value Tax

Individuals who purchase real property in urban areas or acquire the right to use the real property for more than 20 years are liable to pay capital value tax. The tax is levied at 4% on the property’s recorded value. If no property value is recorded, the tax is levied at PKR50 (US$0.49) per square yard of the property.






Comments

#1 SHAHID MALIK | June 20, 2010

i got an excellent information.

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