Section 4C — Super Tax on High-Earning Persons
Section 4C super tax Pakistan TY 2025-26 — 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.
For individuals and AOPs, Section 4C interacts with the Finance Act 2025 10% surcharge on income above PKR 10M — both can stack when applicable, though the 10% surcharge applies to all non-company filers above PKR 10M while Section 4C only kicks in above PKR 150M. Tax planning for high-earning individuals increasingly focuses on minimising taxable income through allowable deductions to keep both surcharges down.
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).