The FBR Income Tax Card for Tax Year 2026
A Comprehensive Breakdown
By Taxation with Atif | Published: December 9, 2025
The Federal Board of Revenue (FBR) has released the Income Tax Card for the Tax Year 2026, outlining the revised tax rates and key amendments brought forth by the Finance Act 2025.
This card is an indispensable tool for every taxpayer—whether a salaried individual, a business owner, or a corporate entity—to ensure timely and accurate compliance. This comprehensive post breaks down the most critical aspects of the Income Tax Card 2026, covering all major changes from personal income tax to corporate and capital gains taxation.
(Note: The data presented here IN THIS Tax Card 2026, as amended up to the Finance Act 2025, dated June 29, 2025. For full details and consultation, the original document and relevant law must be referenced.)
Section 1: Major Changes for the Salaried Class (Tax Year 2026)
For the Tax Year 2026, the tax structure for salaried individuals (where salary income exceeds 75% of total taxable income) has been significantly revised. A new, steeper tax progression has been introduced across multiple income slabs.
Revised Salary Income Tax Slabs and Rates (Sec 149, Div. I, Part I, 1st Schedule)
| Taxable Income (Rs.) | Rate of Tax |
| Up to 600,000 | 0% 6666 |
| 600,001 to 1,200,000 | 1% on the amount exceeding Rs. 600,000 |
| 1,200,001 to 2,200,000 | Rs. 6,000 PLUS 11% on the amount exceeding Rs. 1.2M |
| 2,200,001 to 3,200,000 | Rs. 116,000 PLUS 23% on the amount exceeding Rs. 2.2M |
| 3,200,001 to 4,100,000 | Rs. 346,000 PLUS 30% on the amount exceeding Rs. 3.2M 10101010 |
| Above 4,100,000 | Rs. 616,000 PLUS 35% on the amount exceeding Rs. 4.1M |
Crucial Additional Levy: An Additional 9% on the Tax Imposed (as calculated above) is now applicable12.
Relief for Teachers: Full-time teachers, excluding practicing doctors, are entitled to a 25% reduction in their tax liability.
Section 2: Tax Rates for AOPs & Business Individuals
The tax structure for an Association of Persons (AOP) and Business Individuals under the Normal Tax Regime (NTR) is separate and generally features a steeper tax incidence than the salaried class.
Taxable Income Rates (Normal Tax Regime)
| Taxable Income (Rs.) | Rate of Tax |
| Up to 600,000 | 0% |
| 600,001 to 1,200,000 | 15% on the amount exceeding Rs. 600,000 |
| 1,200,001 to 1,600,000 | Rs. 90,000 PLUS 20% on the amount > Rs. 1.2M |
| 1,600,001 to 3,200,000 | Rs. 170,000 PLUS 30% on the amount > Rs. 1.6M |
| 3,200,001 to 5,600,000 | Rs. 650,000 PLUS 40% on the amount > Rs. 3.2M |
| Above 5,600,000 | Rs. 1,610,000 PLUS 45% on the amount > Rs. 5.6M |
High-Income Levy: For income exceeding Rs. 10 Million, an Additional 10% on the tax imposed (as calculated above) is applicable.
Section 3: Corporate and Company Taxation (Tax Year 2026)
Corporate tax rates remain stable, but the structure includes special rates for different company categories and an Alternate Corporate Tax.
| Company Type | Tax Rate | Alternate Corporate Tax (on accounting profit) |
| Banking Company | 39% | 17% |
| Public & Private Company | 29% | 17% |
| Small Company | 20% | 17% |
Super Tax (Sec 4B & 4C): For companies, excluding banking companies, Super Tax on turnover is imposed as follows:
Upto 50M: 1.5%
From 50M to 100M: 2%
Exceed 100M: 2.5%
Agriculture Income Tax (Punjab 2026)
(According to Punjab Agriculture Income Tax Act)
Annual Agri Income Tax Up to 400,000 0% 400,001 – 800,000 Rs. 1,000 800,001 – 1,200,000 Rs. 3,000 1,200,001 – 2,400,000 5% of amount above 1.2M 2,400,001 – 4,800,000 Rs. 60,000 + 10% above 2.4M Above 4,800,000 15% above 4.8M
Section 4: Key Withholding and Advance Tax Provisions
The FBR Tax Card 2026 details various withholding tax rates (WHT) on payments and transactions, which are crucial for compliance.
A. Execution of Contracts (Sec 153(1)(c))
This area has differentiated rates based on the recipient and the nature of tax (Advance or Minimum).
| Recipient | ATL Rate (Tax Rate) | Non-ATL Rate (Tax Rate) | Nature of Tax |
| Listed Companies | 7.5% | 15% | Advance Tax |
| Other Companies | 7.5% | 15% | Minimum Tax |
| Sportspersons | 15% | 30% | Final Tax |
| Others | 8% | 16% | Minimum Tax |
B. Supply of Goods (Sec 153(1)(a))
Rates for the supply of goods vary widely based on the item and recipient's status.
| Activity/Nature of Payment | ATL Rate | Non-ATL Rate |
| Sale of rice, cottonseed & edible oil | 1.5% | 3% |
| Sale of Cigarettes by distributors | 2.5% | 5% |
| Sale of pharma products, gold & silver | 1% | 2% |
| Sale of other goods by companies | 5% | 10% |
| Sale of other goods by AOPs & Individuals | 5.5% | 11% |
| Toll Manufacturing by companies | 9% | 18% |
C. Property Income / Rentals (Sec 155)
The tax on rental income (Advance Tax) is levied as follows:
Where Recipient is a Company: 15% (ATL) and 30% (Non-ATL).
Other Recipients (Advance Tax on Annual Rent):
Up to 300,000: NIL
300,001 to 600,000: 5% of the amount exceeding 300,000
600,001 to 2,000,000: 15,000 + 10% of the amount above 600,000
Above 2,000,000: 155,000 + 25% of the amount above 2,000,000
D. Cash Withdrawal (Sec 231AB)
Cash withdrawals exceeding Rs. 50,000 per day incur an Advance Tax of 0.8% for non-filers, while filers are subject to a 0% tax rate.
Section 5: Capital Gains and Deemed Income (Tax Year 2026)
Significant revisions have been made to the taxation of capital gains and the introduction of a tax on Deemed Income on property.
A. Tax on Deemed Income (Sec 7E)
This provision, applicable from Tax Year 2022 onwards, imposes an Effective Rate of Tax of 1% on the Fair Market Value (FMV) of Capital Assets situated in Pakistan.
Applicability: Applies if the value of Capital Assets aggregates to an amount exceeding Rs. 25M, held on the last day of the Tax year.
Key Exceptions (For Filer Only): One capital asset, property whose income is chargeable U/S 15, and the first year of property on which tax U/S 236K is paid.
Transfer Note: Property will not be transferred unless the tax under Section 7E has been paid.
B. Disposal of Immovable Property (Sec 37, 37A)
1. Property acquired on or after 1st July, 2024:
For properties acquired on or after July 1st, 2024, the holding period is irrelevant70.
Filer: 15%
Non-Filer: 30%
2. Property and Securities (Holding Period-Based Rates - TY 2026):
The holding period structure remains complex, with varied rates for Open Plots, Constructed Property, Flats, and Securities73.
| Holding Period | Open Plots | Constructed Property | Flats | Securities |
| Upto 1 Year | 15% | 15% | 15% | 15% |
| 1 Year to 2 Years | 12.5% | 10% | 7.5% | 12.5% |
| 2 Years to 3 Years | 10% | 7.5% | N/A | 10% |
| 3 Years to 4 Years | 7.5% | 5% | N/A | 7.5% |
| 4 Years to 5 Years | 5% | 0% | 0% | 5% |
| 5 Years to 6 Years | 2.5% | 0% | 0% | 2.5% |
| Exceeding 6 Years | 0% | 0% | 0% | 0% |
Section 6: Simplified Tax Regime (STR) for SMEs and Retailers
The FBR has maintained a Simplified Tax Regime (STR) under Section 2(59A) and 100E for Manufacturer SMEs registered with FBR or SMEDA. This regime also covers specified retailers and service providers.
| Category (Annual Turnover) | Opting NTR (Taxable Income) | Opting FTR (Gross Turnover) |
| Up to Rs. 100M | 7.5% of taxable income | 0.25% of gross Turnover |
| Rs. 100M to Rs. 250M | 15% of taxable Income | 0.5% of gross turnover |
Important Note: The option to choose between Normal Tax Regime (NTR) or Final Tax Regime (FTR) is irrevocable for the next three years once opted106.
Section 7: Minimum Tax (Sec 113)
Turnover Tax under Section 113 (Minimum Tax) is imposed on various sectors, with rates varying from 0.25% to 1.25%.
| Sector/Activity | Rate |
| SSGCL, SNGPL, PIA and Poultry Industry | 0.75% |
| Oil refineries & Oil Marketing Companies | 0.5% |
| Petroleum agents & distributors registered under the ST Act, 1990 | 0.25% |
| In all other cases (Default Rate) | 1.25% |
Conclusion and Call to Action
The FBR Income Tax Card for Tax Year 2026 introduces several critical adjustments, notably the steeper tax incidence for higher-income salaried individuals and the formalization of the 1% Deemed Income Tax on certain capital assets. Taxpayers and their consultants must carefully review these amendments to ensure full compliance under the current legal framework. Understanding the distinction between Advance, Minimum, and Final Tax regimes, as well as the new slabs for both salaried and business income, is paramount.
We encourage all taxpayers to use this information proactively for tax planning and return preparation.
Disclaimer: Due care and caution have been taken in extracting this information. However, this document is a summary and not a substitute for the official law. For any suggestions, errors, or mistakes found in this document, please refer to the contact information provided in the original document.
