Withholding tax (WHT) is income tax that the person paying you deducts before the money reaches you, then deposits with FBR on your behalf. Most of it is adjustable: it counts as tax already paid, and you claim it as a credit when you file your annual return in IRIS. If your WHT is more than your final tax bill, the excess can be refunded. The rates change with each budget and depend on whether you are on the Active Taxpayers List (ATL), so this guide explains which sections apply to what, and then walks through claiming the credit step by step.
How withholding tax works
The payer (your employer, bank, a company buying your services, a tenant, and so on) is the withholding agent. They deduct tax at the rate set for that type of payment, deposit it with FBR, report it in their withholding statements, and should give you a certificate showing what was deducted.
Two kinds of WHT work very differently:
- Adjustable tax. Most WHT is an advance payment towards your total tax for the year. You declare the income in your return, the system works out your tax, and the WHT is subtracted. If you've had more deducted than you owe, the balance is refundable.
- Final tax. For some income, the tax withheld at source is the full and final tax on that income. It isn't added to your normal taxable income, and no further tax is payable or refundable on it.
Before you claim anything, you need to know which kind each deduction is. Claiming final tax as a credit, or leaving adjustable tax unclaimed, both give you the wrong result.
The main WHT sections, and what each covers
Rates change every budget and several depend on the type of payee, the amount and your filer status. We haven't listed rates here: the figures published for these sections don't agree with each other. Check the current withholding tax rate card on fbr.gov.pk for the tax year you're dealing with.
| Section | What it covers | Adjustable or final? |
|---|---|---|
| 149 | Tax deducted from salary by your employer | Adjustable |
| 150 | Dividends | Generally final |
| 151 | Profit on debt (e.g. bank profit) | Depends on the case; check the rate card |
| 153(1)(a) | Payments for supply of goods | Depends on the payee's category |
| 153(1)(b) | Payments for services | Depends on the payee's category |
| 153(1)(c) | Payments for execution of contracts | Depends on the payee's category |
| 155 | Rent of immovable property | Check the rate card for your case |
| 156 | Prizes and winnings | Final |
| 148 | Tax collected at import stage by customs | Varies by importer and goods |
Tax is also collected at source on several other transactions, including:
- Cash withdrawals. Under section 231AB, banks collect advance tax at 0.8% on cash withdrawals by people who are not on the ATL, once the day's total withdrawals exceed Rs 50,000. ATL filers are not charged under this section.
- Buying and selling immovable property. Advance tax is collected from both buyers and sellers, at much higher rates for non-filers. See our guide to property valuation, CGT and property withholding tax.
- Card payments abroad. Banks collect advance tax under section 236Y when you pay for something outside Pakistan with a debit or credit card. See our section 236Y guide.
Filer or non-filer makes the biggest difference
Across almost every WHT category, people who are not on the Active Taxpayers List pay significantly higher rates than filers. Withholding agents check the ATL to decide which rate to apply to you, so filing on time and staying on the list matters all year. You can check your status on the FBR website or by SMS to 9966. See how to check ATL status and become a filer.
What's "new" for 2026 and 2026-27?
Tax year 2026 covers income from 1 July 2025 to 30 June 2026. Its WHT rates were set by the Finance Act 2025. Tax year 2027 (1 July 2026 to 30 June 2027) follows Budget 2026-27.
Many articles online, including earlier versions of this one, published "projected" or "new" WHT rates before the budgets were passed. The post-budget figures we have seen for tax year 2027 don't agree with one another, so we're not repeating any of them here. In particular:
- No separate "digital withholding tax" with its own rates has been confirmed. Online sellers, freelancers and digital service providers are dealt with under the existing provisions.
- For any payment made on or after 1 July 2026, use FBR's rate card for tax year 2027, not a table from an older article.
Before you claim: collect your WHT certificates
Every withholding agent is required to give you a certificate of the tax deducted or collected (a section 164 certificate). It should show:
- your name and NTN/CNIC
- the withholding agent's name and NTN
- the nature of the payment
- the gross amount paid
- the tax withheld
- the date it was deducted and deposited with FBR
Ask for these from your employer, bank, clients and tenants. Keep them together with your salary slips, bank statements and rent agreements. IRIS also shows the tax that withholding agents have reported against your NTN/CNIC. Compare that data with your certificates before you file, and take up any gap with the agent straight away.
Step by step: claiming your WHT credit in your IRIS return
- Log in to IRIS. You need an active IRIS account. New taxpayers must register first. Our IRIS portal guide covers logging in and finding your way around.
- Open the return for the right tax year. For income earned from 1 July 2025 to 30 June 2026, that is tax year 2026. Individuals file the return of income under section 114(1).
- Declare all your income under the correct heads: salary, business, property, capital gains and other sources. Income covered by final tax isn't added to your normal taxable income. Report it where the form asks for final tax income, not in the normal heads.
- Go to the adjustable tax section. This is where tax collected or deducted from you is claimed.
- Check and complete each entry. IRIS may already show entries taken from withholding agents' statements. Match each one against your certificates. For anything missing, pick the relevant section (for example 149 for salary, 151 for profit on debt, 153 for supplies or services, 155 for rent) and enter the withholding agent's details and the tax withheld.
- Let the system compute your tax. IRIS works out your tax on the income you declared and subtracts the adjustable tax you've claimed.
- Check the balance:
- If tax is still payable, generate a PSID and pay it. The payment steps are the same as for advance tax.
- If your adjustable tax is more than your liability, the excess shows as refundable. Refunds aren't instant: FBR verifies the claim and the process can take time.
- Review, verify and submit. Check every figure, then submit electronically and save the acknowledgement.
Advance tax instalments you paid yourself under section 147 are claimed in the same place as WHT. If you're salaried and want to check whether you're heading for a refund or a balance to pay, work out your tax for the year with our income tax calculator and compare it with the tax on your certificates.
Common problems and how to handle them
- No certificate. Ask the withholding agent again. The certificate is your main proof of tax paid.
- Tax was deducted but doesn't show in IRIS. The agent may not have deposited it or reported it. Follow up with them first, with your payslip, invoice or bank statement as evidence. If they don't fix it, you can report the matter to FBR.
- Your employer deducted too little or too much. If too little was deducted from your salary, you pay the balance when you file. If too much was deducted, you claim it back through your return.
- You forgot to claim WHT for an earlier year. Credit is normally claimed in the return for the year the tax was deducted. Going back usually means filing a revised return within the time the law allows, so get advice if a large amount is involved.
Frequently asked questions
What is the difference between adjustable and final WHT?
Adjustable WHT is an advance payment you claim as a credit against your total tax for the year. Final WHT settles the tax on that particular income. Nothing more is payable on it, nothing is refunded, and the income isn't added to your normal taxable income.
Where do I get a WHT certificate?
From whoever deducted the tax: your employer, bank, client or tenant. They are required to issue a certificate under section 164.
My employer already deducts tax. Do I still need to file a return?
Yes. Salary WHT is an advance payment. You still need to file to declare all your income, claim credits and stay on the Active Taxpayers List.
What if my WHT is more than my tax for the year?
The excess is refundable. It appears in your return computation, and FBR processes the refund after verification, which can take some time.
Are the WHT rates for 2026-27 confirmed?
Budget 2026-27 set the rates for tax year 2027, but the figures quoted online don't agree with each other. Check FBR's current withholding tax rate card rather than any third-party table, including older versions of this page.
This is general information and tax rules change; check FBR's current notifications or a tax adviser for your own case.