Quick answer

What changed in Pakistan's 2026-27 budget?

Pakistan's FY2026-27 budget (Finance Act 2026, effective 1 July 2026) cut salaried tax rates in the Rs 2.2m–7m band, moved the 35% top rate up to Rs 7m, and abolished the 9% surcharge on income over Rs 10m. Property withholding dropped to flat 1.5% (buy) and 2.75% (sell) for filers, Section 7E deemed-rental tax was scrapped, non-filers lost their share-CGT shelter, and freelancers kept the 0.25% export rate to 2029.

LawFinance Act 2026
Effective1 Jul 2026
35% top rateRs 4.1m → 7m

FY2026-27 Budget

What the June 2026 budget changed for your money

A plain-language guide to the Finance Act 2026 (effective 1 July 2026): the salaried tax cuts, lower property withholding, the share-CGT shift for non-filers, and the freelancer relief — with a link into the calculator that works out each change for you.

Effective 2026-07-01 · verified 2026-07-10

This is a plain-language summary, not tax advice. Rates and thresholds carry exceptions and change; always verify your own position against the FBR (fbr.gov.pk) or a qualified tax adviser before filing or acting.

Salaried & income tax

Salaried tax rates cut across the Rs 2.2m–7m band

Before (FY25-26)

FY25-26: Rs 2.2m–3.2m taxed at 23%, Rs 3.2m–4.1m at 30%, and everything above Rs 4.1m at the top 35% rate.

Now (FY26-27)

FY26-27: Rs 2.2m–3.2m → 20%, Rs 3.2m–4.1m → 25%, Rs 4.1m–5.6m → 29%, Rs 5.6m–7m → 32%. The 35% top rate now only begins above Rs 7m (was Rs 4.1m).

Who it affects: Salaried people earning above roughly Rs 2.2m/year (~Rs 183k/month). Below that, the 0%, 1% and 11% slabs are unchanged.

Calculate your salary tax

9% high-income surcharge abolished

Before (FY25-26)

FY25-26: a 9% surcharge was added on top of the income tax for anyone with taxable income above Rs 10m.

Now (FY26-27)

FY26-27: the surcharge is gone — high earners now pay slab tax only, with no 9% add-on.

Who it affects: Salaried and other individuals earning over Rs 10m/year (~Rs 833k/month) — a meaningful cut for top earners.

See tax on a high salary

Property

Property withholding tax cut to flat, lower rates

Before (FY25-26)

FY25-26: section 236K (buy) ran 1.5–2.5% on a value slab, and 236C (sell) ran 4.5–5.5% for filers.

Now (FY26-27)

FY26-27: flat 1.5% on purchase (236K) and flat 2.75% on sale (236C) for filers — simpler and lower at the top end.

Who it affects: Anyone buying or selling property while on the Active Taxpayer List. Non-filer rates stayed high — the relief was filer-only.

Estimate your property tax

Section 7E 'deemed rental income' tax abolished

Before (FY25-26)

FY25-26: section 7E taxed a notional 'deemed rent' (5% of fair market value) on property you owned — even if it earned nothing.

Now (FY26-27)

FY26-27: Section 7E is repealed — there is no more deemed-rental tax on idle property.

Who it affects: Owners of higher-value property who were caught by the 7E deemed-rent charge. Rent-vs-buy maths shifts in owning's favour.

Run the rent-vs-buy maths

Shares & capital gains

Non-filers lose their capital-gains shelter on shares approx.

Before (FY25-26)

FY25-26: the Tenth Schedule effectively shielded non-filers from capital-gains tax on listed securities.

Now (FY26-27)

FY26-27: that exclusion is withdrawn — non-filers face enhanced, roughly-doubled CGT (~30% representative). Filers stay at a flat 15%.

Who it affects: Non-filer stock and mutual-fund investors — a strong push to join the ATL. Filers on listed securities are unchanged at 15%.

Calculate your CGT

Freelancers & IT exports

Freelancers keep the 0.25% export tax rate until 2029

Before (FY25-26)

The 0.25% concessional final tax on IT / IT-enabled service exports was set to lapse in 2026.

Now (FY26-27)

FY26-27: extended through Tax Year 2029 — provided at least 80% of proceeds arrive via banking channels and you keep PSEB registration and ATL status current.

Who it affects: PSEB-registered freelancers and IT / IT-enabled service exporters bringing earnings into Pakistan through the banking channel.

Estimate your freelancer tax

Savings

National Savings & NPC profit rates revised (June 2026) approx.

Before (FY25-26)

Earlier CDNS / SBP profit-rate schedule.

Now (FY26-27)

Rates were re-set effective June 2026 — Naya Pakistan Certificate PKR ~10.75–11.5% p.a., and National Savings certificates re-rated in the 10 June 2026 CDNS revision. (A rate revision, not a Finance Act tax change.)

Who it affects: Savers in National Savings certificates and overseas Pakistanis holding Naya Pakistan Certificates, alongside the new fiscal year.

Compare NPC returns

Everyone: filer vs non-filer

Relief up front, tighter enforcement behind it

Before (FY25-26)

FY25-26: filer / non-filer gap already meaningful; general export withholding at 2%.

Now (FY26-27)

FY26-27: broad filer relief, but non-filer penalties tighten and general export withholding drops from 2% to 1.25%. Being on the Active Taxpayer List matters more than ever.

Who it affects: Everyone — but especially anyone not yet on the ATL, who now pays visibly more on property, shares and withholding than a filer.

Compare filer vs non-filer

Salaried tax: before vs after

Annual income tax on a filer's salary, computed from the FY25-26 and FY26-27 slabs (gross treated as taxable income; FY25-26 includes the now-abolished 9% surcharge above Rs 10m).

Monthly salary	FY25-26 tax/yr	FY26-27 tax/yr	You save/yr
Rs 150,000	Rs 72,000	Rs 72,000	کوئی تبدیلی نہیں
Rs 200,000	Rs 162,000	Rs 156,000	Rs 6,000
Rs 300,000	Rs 466,000	Rs 416,000	Rs 50,000
Rs 500,000	Rs 1,281,000	Rs 1,104,000	Rs 177,000
Rs 1,000,000	Rs 3,685,290	Rs 3,174,000	Rs 511,290

Calculate your exact salary tax

Frequently asked questions

What changed in Pakistan's 2026-27 budget for salaried people?

The Finance Act 2026 cut the tax rate on the Rs 2.2m–7m income bands (23%→20%, 30%→25%, 35%→29% and 32%), moved the 35% top rate up so it only starts above Rs 7m instead of Rs 4.1m, and abolished the 9% surcharge on income over Rs 10m. The 0%, 1% and 11% slabs on income up to Rs 2.2m are unchanged, so lower earners see no slab change. Effective 1 July 2026.

How much salary tax will I save in FY2026-27?

It depends on your income. On roughly Rs 2.4m/year (Rs 200k/month) you save about Rs 6,000/year; on Rs 3.6m (Rs 300k/month) about Rs 50,000; on Rs 6m (Rs 500k/month) about Rs 177,000; and on Rs 12m (Rs 1m/month) about Rs 511,000 once the abolished surcharge is counted. Income up to Rs 2.2m/year sees no change. Use the salary-tax calculator for your exact figure.

Did property taxes change in the FY2026-27 budget?

Yes. For filers, advance tax on buying property (section 236K) became a flat 1.5% and advance tax on selling (section 236C) a flat 2.75%, replacing the higher slabbed rates. Section 7E, which taxed a 'deemed rent' on property you owned, was abolished. Non-filer rates stayed high, so the relief was filer-only.

How does the FY2026-27 budget affect stock market (CGT) investors?

Filers still pay a flat 15% capital-gains tax on listed securities, unchanged. The big shift is for non-filers: the Finance Act 2026 withdrew the Tenth Schedule exclusion that had shielded their capital gains, so non-filers now face enhanced, roughly-doubled CGT (~30% is representative). It is a strong incentive to get on the Active Taxpayer List.

Did the FY2026-27 budget change freelancer and IT export tax?

The concessional 0.25% final tax on IT and IT-enabled service exports was extended through Tax Year 2029, rather than lapsing in 2026. To use it you must keep PSEB registration and ATL status current and bring at least 80% of your proceeds through banking channels. General (non-IT) export withholding was separately cut from 2% to 1.25%.

When did the FY2026-27 budget changes take effect?

The Finance Act 2026 was assented in June 2026 and its measures took effect from 1 July 2026, the start of Tax Year 2027. The numbers in our calculators already reflect these rates. This page is a plain-language summary — always verify your own position against the FBR before filing.

Sources & last verified

Facts last verified: 2026-07-10

This page summarises the Finance Act 2026 for a general audience and does not cover every exception. Tax law is complex and changes — confirm your position with the FBR and a qualified adviser before acting.