Section 235 - Advance Tax on Electricity Bills
Section 235 electricity advance tax Pakistan TY 2026-27 - commercial 12%, industrial 5%, graduated brackets on monthly bills, domestic exempt.
No - domestic connections are exempt from Section 235. The advance tax applies only to commercial and industrial connections above PKR 500 monthly.
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.