Rental Income Tax Calculator

The rental income tax calculator Pakistan helps landlords in Pakistan work out the income tax due on their property rent for tax year 2025-26. Enter your annual gross rent, and the tool automatically applies the FBR 2025-26 taxation of rental income rules - the standard deduction and the applicable slab - to return your net taxable rental income and the final tax bill.

Rental income from residential or commercial properties is taxed like business income under the Income Tax Ordinance 2001. With a 35% to 45% top marginal rate on property income, an accurate figure is essential before you set rents, plan investment returns or prepare your IRIS return.

Enter your total gross annual rent received (or receivable) from all your properties, and select whether the property is residential or commercial. The calculator deducts the 35% standard allowance and the annual repair allowance of 20% where applicable, then applies the non-salaried slabs to the net figure.

• Enter the total annual rent you expect to receive.
• Choose the property type - residential or commercial.
• Review the deduction breakdown and the taxable net rent.
• Reset to test different rents and see how the tax grows.

The result shows each slab amount separately, so you can see exactly where every rupee of your rental profit is being taxed.

Under Section 15D of the Income Tax Ordinance 2001, two separate allowances are given to landlords. The standard rent deduction is a flat 35% of gross rent, which stands in for all operating expenses. Where the landlord maintains the property, an additional 20% is allowed as an annual repair allowance. The remainder is the net taxable rental income.

That net rental income is then charged under the non-salaried individual slab schedule: nil up to Rs 600,000, 15% on the next Rs 600,000, then 20%, 25%, 30%, 35% and up to 45% on income beyond Rs 6,000,000. Since rent is added to any salary or business income you already have, the top marginal rate is usually what applies to the last rupee of rent.

• Gross rent is reduced by 35% as a standard allowance.
• A 20% repair allowance is available when the landlord maintains the property.
• Net taxable rent enters the non-salaried slab table.
• Each slab contributes its own share to the total tax.

Imran rents his DHA Karachi apartment for Rs 150,000 per month, or Rs 1,800,000 a year. As he maintains the property himself, his deductions are Rs 630,000 (35%) plus Rs 360,000 (20%), leaving net taxable rent of Rs 810,000. The tax is nil on the first Rs 600,000 plus 15% of Rs 210,000 (Rs 31,500) - an effective rate of about 1.75% on the gross rent.

A commercial plaza owner with annual rent of Rs 8,000,000 gets a 35% deduction (Rs 2,800,000) but no repair allowance for a commercial unit, giving net taxable rent of Rs 5,200,000. The tax, computed on the non-salaried slabs up to 35%, comes to roughly Rs 1,335,000 before any withholding credit.

• Deducting the repair allowance for commercial properties - the 20% annual repair allowance is available to residential landlords who maintain the property; commercial units normally get only the 35% standard deduction.
• Reporting rent after expenses already deducted - the 35% standard deduction is a substitute for operating costs; you cannot add actual expenses on top.
• Forgetting advance tax on the property (Section 235) - rent paid by tenants to non-filers triggers a 5% withholding that is adjustable in the return.
• Ignoring the rental income when filing - undeclared rental income is a common trigger of FBR notices and penalties.