How it is calculated
- Annual rent = monthly rent × 12.
- Income from property = annual rent − repairs allowance (one-fifth of the rent, section 15A).
- If salary is more than 75% of total income, the salaried slabs apply; otherwise the non-salaried slabs below, with a 10% surcharge for non-salaried taxpayers above Rs 10 million.
- Tax on rent = tax on (salary + property income) − tax on salary alone.
Example: rent of Rs 100,000 a month, no salary. Annual rent Rs 1,200,000, repairs allowance Rs 240,000, taxable income Rs 960,000. Tax = 15% of the amount above Rs 600,000 = Rs 54,000. If the tenant is a company it deducts Rs 75,000, so you can claim a refund of Rs 21,000 in your return. With an annual salary of Rs 3,600,000 as well, the tax on the rent is Rs 258,400 (Rs 311,000 in 2025-26).
Non-salaried slabs (2025-26 and 2026-27)
| Annual taxable income | Tax |
|---|---|
| Rs 0 – Rs 600,000 | Nil |
| Rs 600,000 – Rs 1,200,000 | 15% above Rs 600,000 |
| Rs 1,200,000 – Rs 1,600,000 | Rs 90,000 + 20% above Rs 1,200,000 |
| Rs 1,600,000 – Rs 3,200,000 | Rs 170,000 + 30% above Rs 1,600,000 |
| Rs 3,200,000 – Rs 5,600,000 | Rs 650,000 + 40% above Rs 3,200,000 |
| Above Rs 5,600,000 | Rs 1,610,000 + 45% above Rs 5,600,000 |
Tenant’s deduction under section 155 (individual or AOP landlord)
| Annual gross rent | Deduction |
|---|---|
| Rs 0 – Rs 300,000 | Nil |
| Rs 300,000 – Rs 600,000 | 5% above Rs 300,000 |
| Rs 600,000 – Rs 2,000,000 | Rs 15,000 + 10% above Rs 600,000 |
| Above Rs 2,000,000 | Rs 155,000 + 25% above Rs 2,000,000 |
For a company landlord the deduction is 15%. This calculator leaves out minimum tax, super tax, other business income and deductions other than the repairs allowance.
Frequently asked questions
Is there still a separate tax rate for rental income?
No. The Finance Act 2021 removed the separate rental slabs, so since tax year 2022 rent is added to your other income and taxed at the normal rates for individuals and AOPs. If your salary is more than 75% of your taxable income, the salaried slabs apply; otherwise the non-salaried slabs do.
Did the rental tax change in 2026-27?
For a landlord without a salary, no: the non-salaried slab table has been the same since the Finance Act 2024, with a 10% surcharge where taxable income passes Rs 10 million. For a salaried landlord the tax on rent changes with the new salaried slabs of 2026-27.
What deductions can I claim against rent?
Section 15A allows one-fifth of the rent as a repairs allowance, which this calculator applies. You can also deduct insurance, local property tax, ground rent, interest on a loan taken for the property and a few other costs, which are not included here.
Who deducts tax under section 155?
Government bodies, companies, non-profits, diplomatic missions, private schools, boutiques, beauty parlours, hospitals and clinics, and individuals or AOPs paying Rs 1.5 million or more a year in rent must deduct tax from the rent they pay you. For an individual landlord it is nil up to Rs 300,000 a year, then 5%, 10% and 25% in slabs.
Is the tax deducted by the tenant final?
No. It is adjustable: claim it in your return against the tax on your total income. If it is more than your actual tax, the difference is refundable; if it is less, you pay the balance with the return.
Guides
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Sources
- Income Tax Ordinance 2001, amended up to 30 June 2026 (FBR): s.15, s.15A, s.155, s.4AB, First Schedule Part I Division I and Part III Division V
- FBR Withholding Tax Rates Card, tax year 2027 (Finance Act 2026): s.155 rates
This calculator gives an estimate for guidance. It is not official advice. Rates and rules change, so confirm important decisions with the relevant authority or a qualified professional. See how we calculate, or report a mistake.