1. What is Rental Income Tax in Pakistan?

Rental income tax in Pakistan is calculated based on slab rates applied to gross rental income. The tax is progressive, with different rates applied to different income brackets as defined by the Federal Board of Revenue (FBR).

2. How Does the Calculator Work?

The calculator uses the following formula:

Where:

• \( Gross\ Rent \) — Total rental income before deductions (PKR)
• \( Slab\ Rate \) — Applicable tax rate percentage based on income bracket

Explanation: The calculator applies the specified slab rate to the gross rental amount to determine the tax liability.

3. Importance of Rental Tax Calculation

Details: Accurate rental tax calculation is crucial for compliance with Pakistani tax laws, avoiding penalties, and proper financial planning for property owners.

4. Using the Calculator

Tips: Enter your total annual rental income in PKR and the applicable slab rate percentage. The calculator will compute the tax amount due.

5. Frequently Asked Questions (FAQ)

Q1: What are the current slab rates for rental income tax in Pakistan?
A: Rates vary by income bracket. For example: 5% on income between 300,000-600,000 PKR, 10% on 600,001-1,200,000 PKR, etc. Check FBR for current rates.

Q2: Is rental tax calculated on gross or net income?
A: In Pakistan, rental tax is typically calculated on gross rental income before deductions.

Q3: Are there any deductions available against rental income?
A: Yes, certain expenses like repairs (up to 20% of rent) may be deductible. Consult a tax professional for specifics.

Q4: When is rental income tax due in Pakistan?
A: Rental income tax is generally due when filing annual tax returns, but advance tax may be required in some cases.

Q5: How often should I calculate my rental tax liability?
A: It's recommended to calculate quarterly for better financial planning and to ensure you have funds available when tax is due.