Islamabad, February 19, 2026 – The Federal Board of Revenue (FBR) has reported a 21% surge in income tax collection from dividends during the first seven months (July 2025–January 2026) of the current fiscal year (FY26) compared to the same period last year.
According to FBR provisional data, income tax revenue from dividends reached Rs116.31 billion in the first seven months of FY26, up from Rs96 billion during the corresponding months of FY25.
However, the FBR noted a decline in January 2026, with income tax collection from dividends dropping 28% to Rs3.92 billion, compared with Rs5.46 billion in January 2025.
Under Section 150 of the Income Tax Ordinance, 2001, the FBR collects tax on dividends at different rates for persons listed on the Active Taxpayers List (ATL) and higher rates for non-ATL taxpayers. The law requires anyone paying dividends to deduct tax at prescribed rates depending on the type of dividend and recipient.
Key rates under Section 150 include:
• 7.5% for dividends paid by Independent Power Producers reimbursed by CPPA-G.
• 15% for dividends from Real Estate Investment Trusts (REITs) and most other cases.
• 25% / 15% for mutual funds, based on income from debt securities or equities.
• 0% / 35% for dividends from Special Purpose Vehicles under REIT regulations.
• 25% for dividends from companies exempt from tax or with carried forward losses.
Tax rates for non-ATL taxpayers are double the standard rates.
The FBR’s latest figures highlight robust growth in dividend tax collection during FY26 despite fluctuations in monthly collections, reflecting ongoing efforts to broaden the tax base and improve compliance.