How token tax works
Token tax is the motor vehicle tax that the excise office collects every year, or once for life, under the Motor Vehicles Taxation Act (a provincial tax; federal in Islamabad). From 2026-27, both Punjab and Islamabad charge cars above 1000cc a share of the invoice value and Sindh charges a fixed yearly amount by engine size, while cars up to 1000cc and motorcycles pay a fixed amount once. The excise office also collects advance income tax under section 234 at the same time.
- Car above 1000cc: token tax = invoice value × the rate (Punjab 0.3% or 0.4%; Islamabad 0.25% or 0.35%); in Sindh a fixed Rs 2,000 to Rs 7,000 a year, 75% of that after ten years and 50% after fifteen.
- Car up to 1000cc and motorcycles: a fixed lifetime amount.
- Income tax: a fixed annual or lump-sum amount by engine size, doubled for non-filers, not charged on cars over 10 years old or vehicles up to 200cc.
Example: a 1300cc car in Punjab with an invoice value of Rs 5,000,000. Token tax at 0.3% = Rs 15,000, income tax Rs 2,500, total Rs 17,500 a year (Rs 20,000 for a non-filer). The same car pays Rs 15,000 in Islamabad and Rs 4,500 in Sindh. An 800cc car in Punjab pays Rs 30,000 once.
Section 234 advance income tax (filer)
| Engine (cc) | Annual | Lump sum (with lifetime token) |
|---|---|---|
| ≤ 1000 | 800 | 10,000 |
| 1001 – 1199 | 1,500 | 18,000 |
| 1200 – 1299 | 1,750 | 20,000 |
| 1300 – 1499 | 2,500 | 30,000 |
| 1500 – 1599 | 3,750 | 45,000 |
| 1600 – 1999 | 4,500 | 60,000 |
| 2000+ | 10,000 | 120,000 |
In Punjab, if a car up to 1000cc is transferred within ten years of registration, the Rs 20,000 lifetime token is charged at transfer with a 10% rebate for each financial year passed (Rs 1,500 for a motorcycle). Registration fee, transfer fee, Punjab’s professional tax and Sindh’s one-time luxury tax are not included. In Sindh the tax halves after fifteen years; this calculator applies the ten-year 75% rate.
Frequently asked questions
How much is token tax in Punjab for 2026-27?
A car up to 1000cc pays a one-time lifetime token of Rs 20,000. From 1001cc to 2000cc the annual token tax is 0.3% of the invoice price, and above 2000cc it is 0.4%. A motorcycle pays a lifetime token of Rs 1,500 at registration.
How much is token tax in Islamabad for 2026-27?
Under the Finance Act 2026, a car up to 1000cc pays Rs 20,000 for life, 1001cc to 2000cc pays 0.25% of invoice value a year, and 2001cc and above pays 0.35% a year. Motorcycles pay a lifetime tax of Rs 1,000 up to 200cc, Rs 2,000 from 201cc to 400cc and Rs 5,000 above 400cc.
What is the extra income tax collected with token tax?
Section 234 of the Income Tax Ordinance makes the excise office collect advance income tax with token tax, from Rs 800 a year (up to 1000cc) to Rs 10,000 a year (2000cc and above), or a lump sum of Rs 10,000 to Rs 120,000 where the token is paid for life. It is adjustable against your income tax. Non-filers pay double.
Do old cars and motorcycles pay the section 234 tax?
No advance tax is collected on motor cars used for more than ten years in Pakistan, and vehicles up to 200cc (most motorcycles) are outside section 234. The token tax itself still applies.
How much is token tax in Sindh for 2026-27?
Sindh charges fixed amounts under the Schedule to the Sindh Motor Vehicles Taxation Act, which the Sindh Finance Act 2026 left unchanged. A new car up to 1000cc pays Rs 20,000 once. A car seating four to six pays Rs 2,000 a year from 1001cc to 1300cc, Rs 4,000 up to 1600cc, Rs 4,500 up to 2000cc, Rs 5,000 up to 2500cc and Rs 7,000 above that, and double-cabin pickups Rs 7,000. The annual tax drops to 75% after ten years and 50% after fifteen years from first registration. A new motorcycle pays Rs 1,800 once up to 149cc and Rs 3,000 from 150cc. The one-time luxury tax on cars of 1500cc and above at first registration is not included here.
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Sources
- Excise, Taxation & Narcotics Control Department Punjab: motor vehicle tax rates (token tax 2026-27)
- Finance Act 2026 (Gazette, 26 Jun 2026), s.2: Islamabad motor vehicle tax Tables 2-5
- Islamabad Excise & Taxation Department: token tax rate schedule (Table 1 motorcycles)
- Sindh Finance Act 2019 (Sindh Act XII of 2019), s.3: Schedule to the Sindh Motor Vehicles Taxation Act 1958
- Sindh Motor Vehicles Taxation (Amendment) Act 2021 (Sindh Act XIII of 2021): Schedule serial 5(b) car rates
- Sindh Finance Act 2026 (Sindh Government Gazette, 1 Jul 2026): no change to motor vehicle tax
- Income Tax Ordinance 2001 amended to 30.06.2026: s.234, First Schedule Part IV Division III, Tenth Schedule
- FBR Withholding Tax Rates Card, updated to 30 Jun 2026 (s.234)
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.