Section 155 — Withholding on Rent of Immovable Property
Section 155 rent WHT Pakistan TY 2025-26 — graduated 5–25% rates for individuals, flat 15% for companies, tenant deduction by prescribed persons.
Section 155 obliges prescribed-person tenants (companies, AOPs, government bodies, charities) to deduct income tax when paying rent on immovable property. Individual landlords face graduated rates: 5% above PKR 300,000 annual rent, climbing to 25% above PKR 4 million. Company landlords face a flat 15% on gross rent. Individual residential tenants generally don't withhold; the landlord self-assesses.
Rental income is a separate income head under Section 15 of the Income Tax Ordinance. Allowable deductions include statutory repair (1/6th of rent), property tax paid, insurance, ground rent, loan interest, and collection charges up to 6%. The Section 155 WHT collected by the prescribed-person tenant is claimed as advance tax credit against the landlord's final slab-based liability.
Common landlord mistakes: forgetting to claim the Section 155 WHT certificate as advance credit, mismatching declared rent with the prior-year wealth statement, and failing to deduct allowable repair/insurance/loan-interest costs. Property tax paid to the cantonment/municipal authority is also deductible. Maintain bank evidence and tenant deduction certificates for every WHT credit claimed.
Frequently asked questions
What is the Section 155 rate for individuals?
Graduated 5% on rent above PKR 300,000 annual, climbing to 25% on rent above PKR 4 million. Companies face a flat 15%.
Do all tenants withhold rent tax?
No. Only prescribed-person tenants (companies, AOPs, government, charities) must withhold. Individual residential tenants generally don't deduct; the landlord self-assesses.
What deductions can I claim against rent?
Statutory repair (1/6th of rent), property tax, insurance, ground rent, loan interest, and collection charges up to 6%. Companies can also depreciate the building.
Is rent below PKR 300k exempt?
Below PKR 300,000 annual rent, no slab tax is due for individuals. The exemption is rent-specific, separate from the PKR 600,000 general income exemption.