Section 235 — Advance Tax on Electricity Bills
Section 235 electricity advance tax Pakistan TY 2025-26 — commercial 12%, industrial 5%, graduated brackets on monthly bills, domestic exempt.
Section 235 charges advance income tax on commercial and industrial electricity connections, collected by the DISCO (distribution company — K-Electric, LESCO, IESCO, etc.) on the monthly bill. Domestic connections are exempt. Bills below PKR 500 are also exempt. The graduated structure: 0% on tiny bills, 10% on PKR 501–20,000, 12% commercial / 5% industrial above PKR 20,000.
The DISCO adds the Section 235 line item to the monthly bill, the consumer pays, and the DISCO remits to FBR. At year-end the DISCO issues a consolidated certificate showing total Section 235 paid across the year. The consumer claims this as advance tax credit in the IRIS return — assuming the connection is registered in their name and tied to a documented business.
Section 235 is adjustable advance tax, not final. SME owners and industrial-unit operators should ensure their electricity connection is registered in the business name (or the proprietor's NTN-linked CNIC) so the Section 235 deductions are claimable. Mismatch between connection holder and business filer is a common audit issue that disallows the WHT credit.
Frequently asked questions
Does Section 235 apply to my home electricity bill?
No — domestic connections are exempt from Section 235. The advance tax applies only to commercial and industrial connections above PKR 500 monthly.
What's the rate on a commercial electricity bill?
12% on bills above PKR 20,000 monthly. Below PKR 20,000 the rate is graduated 10% (PKR 501-20,000) or 0% (below PKR 500).
Why is industrial cheaper than commercial?
5% for industrial vs 12% for commercial — Section 235 rewards manufacturing over retail/services as a matter of policy. Verify your connection classification with the DISCO.
Can I claim Section 235 back in my IRIS return?
Yes — it's adjustable advance tax. Enter the DISCO's annual certificate amount under tax-deducted-at-source. The connection must be registered in your business or NTN-linked CNIC name.