Living in Pakistan: residency from 183 days, salaries taxed from 0 % to 35 %, down payments on the purchase and sale of property

In Pakistan, the Finance Bureau of Revenue (FBR) website's "Income Tax Basics" page lists three ways for an individual to be considered a resident: 183 days or more of physical presence in the tax year, 120 days or more with at least 365 days of physical presence in the four preceding years, or being a government employee posted abroad. For the 2027 tax year (July 1, 2026, to June 30, 2027), the salary scale ranges from 0 % up to 600,000 rupees to 35 % above 7,000,000 rupees. The Finance Act 2026 also abolished the deemed income tax under Section 7E and established flat rates for advance payments on the purchase and sale of real estate. This page reports on these sources. What they do not specify is indicated as such.

Resident and non-resident

The "Income Tax Basics" page of the FBR, which reproduces section 82 of the Income Tax Ordinance 2001, defines as a resident for a tax year the individual who:

• is present in Pakistan for 183 days or more in the fiscal year;
• is present for 120 days or more in the fiscal year and 365 days or more in total during the four preceding years;
• is an agent or official of the federal or provincial government stationed abroad during the fiscal year.

The normal tax year is named after the calendar year in which June 30 falls: the 2027 tax year runs from July 1, 2026 to June 30, 2027. These pages do not mention either home or center of vital interests for domestic residence; these criteria only appear in the case of dual residence, in the convention with France.

Non-residents are taxed on income from Pakistani sources. This includes salary from employment in Pakistan, dividends paid by a resident company, interest paid by a resident individual, rental income from property located in Pakistan, and pensions paid by a resident. Foreign-source income is defined as any income that is not from Pakistani sources; the taxation of residents on their foreign income is not detailed here.

Salaries: the pay scale for the 2027 fiscal year

FBR Circular No. 02 of 2026-27, dated September 8, 2026, indicates that the Finance Act 2026 replaced the tax bracket table for reducing payroll taxes. The FBR withholding tax rate chart for fiscal year 2027, updated as of June 30, 2026, uses the same tax brackets for payroll withholding (Article 149). Amounts are in rupees (Rs).

Article 4AB provides for a 10 % surcharge on income tax for individuals whose taxable income exceeds 10 million rupees. According to the circular, the Finance Act 2026 abolished the 9 % surcharge that applied to salaried employees; the 10 % surcharge continues to apply to other individuals. The tax brackets for non-salaried income are not detailed here.

Dividends, interest and rent: withholdings

The withholding tax rate map distinguishes between taxpayers registered on the Active Taxpayer List (ATL) and others. For dividends (section 150) and interest (section 151), it indicates, in particular:

The map contains other lines, notably for mutual funds and sukuk, which this page does not include.

For the gross rent of a property (article 155), it uses a scale by brackets for individuals, without distinction between ATL and non-ATL.

Real estate: deposits for purchase and sale

The circular of September 8, 2026, explains that the advance payment under Article 236K, collected upon the purchase of real estate, becomes a flat rate of 1.25 % of the market value, and that the advance payment under Article 236C, collected upon sale, becomes a flat rate of 2.75 % of the price received. The withholding rate chart reflects these two rates for ATL taxpayers. For others, it indicates 10.5 %, 14.5 %, or 18.5 % upon purchase, depending on the property value (up to 50 million rupees, from 50 to 100 million, and above 100 million), and 11.5 % upon sale.

The circular also specifies that Article 7E, which taxed presumed income, is repealed. The capital gains tax on real estate (Article 37) and the conditions for a foreigner to purchase property are not detailed here.

The Pakistani citizen who returns to settle

Article 51 of the Income Tax Ordinance, as published by the FBR, applies to Pakistani citizens. A citizen who was not a resident for the previous four tax years has their foreign-source income exempt from taxation in the year they become a resident and the following year. The ordinance also exempts salaries earned abroad by a citizen who leaves Pakistan during the fiscal year but remains there until the end of that year.

Coordination with the Franco-Pakistani convention

The convention of June 15, 1994, entered into force on September 1, 1996, according to the BOFiP (Official Bulletin of Public Finances). Pakistan is included on the list of conventions modified by the multilateral convention: the BOFiP indicates January 1, 2022, for withholding taxes and October 1, 2021, for other taxes. In the consolidated text published by the French tax authorities, the withholding tax is capped at:

• 10 % of gross dividends if the beneficiary is a company which holds at least 10 % of the capital for 365 days, 15 % in other cases (article 10);
• 10 % for interest (article 11), royalties (article 12) and technical service fees (article 13).

For a person resident in both States, Article 4, § 2, of the 1994 text lists, in order, the permanent home, the center of vital interests, the habitual residence, nationality, and then the mutual agreement. Details can be found on our page dedicated to the convention.

What this page does not cover

It does not detail the tax brackets for non-salary income, capital gains tax, inheritance tax, wealth tax, social security, tax return filing deadlines, or visas and residence permits. These matters fall under Pakistani law and should be verified with the FBR (Foreign Revenue Bureau). Balmont Conseil is neither a law firm nor a local tax advisor: local tax matters should be verified with a professional based in Pakistan. French matters, including the departure declaration, accounts to be declared, and the exit tax, are addressed in our pages on tax residency.

What changes depending on your situation

• Your number of days spent in Pakistan, fiscal year by fiscal year, and over the four previous years.
• The nature of your income: salary, dividends, interest, rent, sale of property.
• Your registration or not on the list of active taxpayers, which changes the rates of withholdings and advance payments.
• Your nationality and your residency status in France and Pakistan.

The rule depends on your situation. No results are guaranteed.