KARACHI: The income tax return filing for tax year 2026 is expected to begin in July for taxpayers across Pakistan. Individuals and Associations of Persons (AOPs) earning business income are advised to review the updated tax rates to ensure accurate and timely filing.
The Federal Board of Revenue (FBR) has issued revised business income tax slabs for the tax year 2026, aiming to provide clarity and reduce errors during the return filing process.
Business Income Tax Rates for 2026
The following tax rates apply to individuals and AOPs (excluding salaried individuals):
| S# | Taxable Income (PKR) | Rate of Tax |
| 1 | Up to 600,000 | 0% |
| 2 | 600,001 – 1,200,000 | 15% of amount exceeding 600,000 |
| 3 | 1,200,001 – 1,600,000 | 90,000 + 20% of amount exceeding 1,200,000 |
| 4 | 1,600,001 – 3,200,000 | 170,000 + 30% of amount exceeding 1,600,000 |
| 5 | 3,200,001 – 5,600,000 | 650,000 + 40% of amount exceeding 3,200,000 |
| 6 | Above 5,600,000 | 1,610,000 + 45% of amount exceeding 5,600,000 |
Special Provision for Professional Firms
According to the FBR, in the case of an AOP classified as a professional firm — which is prohibited from incorporation under relevant laws or regulatory bodies — the maximum tax rate of 45% will be reduced to 40%.
Guidance for Taxpayers
Tax experts recommend that business owners and partnerships carefully calculate their taxable income under the applicable slab to avoid penalties or misreporting. Early preparation ahead of the filing season can help ensure compliance with FBR regulations.
The upcoming return filing season is expected to witness increased scrutiny, making it essential for taxpayers to stay informed about the latest tax rules and rates.