Section 4C - Super Tax on High-Earning Persons
Section 4C super tax Pakistan TY 2026-27 - progressive 0-10% surcharge on annual income above PKR 150M, applies to high-earning individuals and AOPs.
Section 4C introduces a progressive super-tax surcharge on high-earning persons (individuals, AOPs, and companies) above PKR 150 million annual income. The progressive table: 0% to PKR 150M, 1% to 200M, 2% to 250M, 3% to 300M, 4% to 350M, 6% to 400M, 8% to 500M, 10% above 500M. The surcharge is on net taxable income, not gross - and stacks on top of regular slab/corporate tax.
Originally introduced as a one-time levy under the Finance Act 2022, Section 4C was extended through subsequent Finance Acts and now functions as a permanent feature of Pakistan's high-income tax landscape. Major beneficiaries from the policy expansion: banking, sugar, cement, tobacco, fertilizer, and other sectors whose top firms regularly clear the PKR 150M threshold.
Under Budget 2026-27, the 9% / 10% Finance Act 2025 surcharge on individuals above PKR 10M has been SCRAPPED - so Section 4C no longer stacks with that older surcharge. Section 4C super tax remains the only additional charge layered on top of regular slab or corporate tax for high earners, kicking in only above PKR 150M taxable income. Tax planning for high-earning individuals and corporates now focuses on the slab base, allowable deductions, and Section 4C threshold management - the PKR 10M surcharge layer is no longer a concern from TY 2026-27 onwards.
Frequently asked questions
Who pays Section 4C super tax?
High-earning persons (individuals, AOPs, companies) with annual taxable income above PKR 150 million. Progressive rates from 1% to 10% based on income bracket.
Does Section 4C stack on top of normal tax?
Yes - Section 4C surcharge is in addition to regular slab/corporate tax and any other applicable surcharge (like the Finance Act 2025 10% on individuals above PKR 10M).
Is Section 4C permanent?
Originally introduced as a one-time levy in Finance Act 2022, it has been extended through subsequent Finance Acts and now functions as a permanent feature of Pakistan's high-income tax landscape.
What's the highest Section 4C rate?
10% on the portion of taxable income above PKR 500 million annually. The progressive structure means rates climb in 1-2% steps from 1% (at PKR 150M) to 10% (above PKR 500M).