Tax on Chartered Accountant Income in Pakistan (TY 2026-27)
Chartered accountant tax in Pakistan TY 2026-27 - sole practice vs ICAP firm partnership vs incorporated CA company, ICAP fees, Section 153 WHT.
Worked example: Rs 600,000 per month
Annual income Rs 7,200,000 - here's how it would be taxed both ways under Finance Act 2025.
| Taxable income band | Rate | Income in band | Tax in band |
|---|---|---|---|
| Up to Rs 600,000 | 0% | Rs 600,000 | Rs 0 |
| Rs 600,001 - Rs 1,200,000 | 15% | Rs 600,000 | Rs 90,000 |
| Rs 1,200,001 - Rs 1,600,000 | 20% | Rs 400,000 | Rs 80,000 |
| Rs 1,600,001 - Rs 3,200,000 | 30% | Rs 1,600,000 | Rs 480,000 |
| Rs 3,200,001 - Rs 5,600,000 | 40% | Rs 2,400,000 | Rs 960,000 |
| Above Rs 5,600,000 | 45% | Rs 1,600,000 | Rs 720,000 |
| Total slab tax | Rs 2,330,000 | ||
Sole practice CA - non-salaried slabs
A sole-practice Chartered Accountant is treated as an individual carrying on business under ITO 2001 Section 18. Income falls on the non-salaried slab table (15% to 45%). Clients withhold Section 153 services WHT at 11% (filer) / 22% (non-filer) on each invoice, which the CA later claims as an adjustable credit on the annual return. ICAP membership fees, professional indemnity insurance, CPD course costs and office rent are all deductible business expenses. The structure suits CAs with under PKR 10M annual revenue.
ICAP-registered firm (AOP)
Two or more CAs in partnership form an AOP under ITO Section 92. The AOP itself is the taxable entity - it computes tax on the non-salaried slab table at AOP level, and partners draw their share net of AOP-level tax. Partners do not separately re-tax their AOP share. This avoids the double-tax that hits a company-and-shareholder structure. ICAP By-laws set partnership requirements including signing partner ratios, professional indemnity, and audit-quality controls. The structure suits firms with PKR 10M-100M revenue or 3+ partners.
Incorporated CA company
Some CAs incorporate as private limited companies for liability shielding and to raise capital. The company faces 29% corporate tax (general) or 20% if it qualifies as a Small Company under Section 2(59A). Dividends to shareholder-CAs attract a separate 15% Section 150 WHT (final tax for individuals). Total effective rate (corporate + dividend) often ends up higher than the AOP path - hence most Pakistani CA firms still prefer partnerships. For firms above PKR 150M revenue, Section 4C super tax may add 1-10% on top.
Frequently asked questions
How is a Pakistani chartered accountant taxed?
Sole practice: non-salaried slabs (15% to 45%) with Section 153 services WHT at 11% adjustable. Partnership / AOP: AOP-level tax on non-salaried slabs, partners draw net. Incorporated firm: 29% corporate (or 20% small company) plus 15% dividend WHT on distributions.
Can a chartered accountant claim PSEB 0.25%?
Generally no - CA services are not on the PSEB-eligible IT / IT-enabled services list. The only path to PSEB would be a CA firm specialising in technology consulting or system implementation that falls within the digital-services definition.
Are ICAP fees and CPD costs deductible?
Yes - on any of the three structures. ICAP annual subscription, CPD course fees, professional indemnity insurance and PI premiums are all wholly-and-exclusively business expenses deductible under Sections 20-35 of the Income Tax Ordinance.
What is Section 153 WHT for a CA invoice?
Section 153(1)(b) services WHT is 11% (filer) / 22% (non-filer) on professional fees. The client deducts at payment and issues a year-end certificate; the CA claims it as a credit on the IRIS return. It is adjustable (not final) tax for sole-practice CAs.