Tax on Overseas Pakistani Income (Non-Resident, TY 2025-26)
Non-resident Pakistani tax in TY 2025-26 - when you owe Pakistani tax, residency rules, Roshan Digital remittance, Section 111(4), and filing requirements.
Worked example: Rs 500,000 per month
Annual income Rs 6,000,000 - 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 | 1% | Rs 600,000 | Rs 6,000 |
| Rs 1,200,001 – Rs 2,200,000 | 11% | Rs 1,000,000 | Rs 110,000 |
| Rs 2,200,001 – Rs 3,200,000 | 23% | Rs 1,000,000 | Rs 230,000 |
| Rs 3,200,001 – Rs 4,100,000 | 30% | Rs 900,000 | Rs 270,000 |
| Above Rs 4,100,000 | 35% | Rs 1,900,000 | Rs 665,000 |
| Total slab tax | Rs 1,281,000 | ||
The residency test that decides everything
Pakistani tax residency is governed by Sections 81–83 of the Income Tax Ordinance. An individual is resident if they were in Pakistan for 183 days or more in the tax year, or if they were a government employee posted abroad. Non-residents are taxed only on Pakistan-source income - foreign salary, foreign investments, and overseas property gains are entirely outside FBR's net. Verifying your residency status correctly is the single most important step for an overseas Pakistani.
What Pakistan-source income do non-residents still pay tax on?
If you remain a non-resident but earn from Pakistani sources - say rent from a Karachi flat, dividends from a Pakistani brokerage account, or profit on Roshan Digital Account deposits - that income is taxable in Pakistan. Rental income hits Section 155 slabs, PSX dividends face Section 150 final tax (15% filer / 30% non-filer), and Roshan deposits get a preferential 10% final tax with no further filing required. Foreign salary or business overseas is exempt.
Roshan Digital Accounts and remittance to family
Funds sent home through formal banking channels to family members are entirely exempt from tax under Section 111(4) - provided the remitter is a non-resident and the receiving family member declares the inflow on their own wealth statement. This is the cleanest way to support family or buy Pakistani property from abroad. Roshan Digital Accounts (RDAs) further give 10% preferential tax on Naya Pakistan Certificates and PSX investments routed through the RDA.
Do non-residents need to file an IRIS return?
Not if you have no Pakistan-source income. If you do (rental, Pakistani dividends, RDA profit), you should file to maintain ATL status - non-ATL non-residents face the same 2× WHT punishment on Pakistani transactions as anyone else. File before 30 September following year-end. Use the 'non-resident' filer type in IRIS so the system applies the correct treatment to your foreign income (excluded) and your Pakistan-source income (taxable).
Frequently asked questions
Do overseas Pakistanis pay tax to FBR?
Only on Pakistan-source income (rent, PSX dividends, RDA profit, Pakistani business). Foreign salary and overseas earnings of confirmed non-residents are exempt from Pakistani tax.
How is residency determined?
183 days in Pakistan during the tax year (1 July to 30 June) makes you a resident. Less than that, plus appropriate visa/work status abroad, makes you a non-resident.
Is money sent home from abroad taxable?
No, under Section 111(4) - formal banking-channel remittance from non-residents to family members in Pakistan is exempt. The receiving family member declares it on their wealth statement.
What's special about Roshan Digital Accounts?
RDA holders get 10% preferential final tax on Naya Pakistan Certificates and PSX investments routed through the account, with no further IRIS filing burden for that income.
Should non-residents still file an IRIS return?
Only if they have Pakistan-source income or want to maintain ATL status for Pakistani transactions. Pure foreign-income non-residents have no Pakistani filing obligation.