How is dividend income taxed in Pakistan?

Dividend income is subject to a final withholding tax under section 150, deducted at source by the company or registrar. It is a final tax, meaning it is not added to your salary slab income and you do not pay any further tax on it at filing.

What are the dividend withholding rates?

The standard rate is 15 percent. Mutual funds and qualifying Independent Power Producers are commonly taxed at 10 percent, while dividends from companies that pay little or no corporate tax face a higher rate around 25 percent. Non-filers pay roughly double, which the tool caps at 30 percent.

How does filer status change the tax?

Being on the Active Taxpayers List (a filer) gives you the standard rate. If you are not on the ATL, the withholding rate is roughly doubled as a penalty, which the tool applies up to a 30 percent cap. Filing your tax return to get on the ATL is usually worth it.

Do I need to declare the dividend separately?

Because the WHT is a final tax, the dividend is not added to your other income for slab taxation. You still report it in your return for transparency, but no additional tax is charged beyond the amount already withheld.

No. It is an estimate. Rates change with each Finance Act, certain shareholders and treaty residents get different treatment, and exemptions exist. Treat this as a guide, not tax advice.

Pakistan Dividend Tax Calculator

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A Pakistan dividend tax calculator that shows what you actually keep after withholding. Dividend income in Pakistan is taxed as a final tax via withholding at source — it is not added to your slab income — so the net amount is simply the gross dividend less the applicable rate.

How it works

The company or registrar deducts the withholding tax before paying you:

tax = grossDividend * rate
net = grossDividend - tax

The rate depends on the payer type and your filer status:

Standard company: 15%
Mutual fund or qualifying IPP: 10%
Company paying little or no corporate tax: 25%
Non-filer (not on the ATL): roughly double the above, capped at 30%

Example and notes

A Rs 100,000 dividend from a standard company, paid to a filer, is taxed at 15%: Rs 15,000 is withheld and you receive Rs 85,000 net. The same dividend to a non-filer is taxed at 30%, leaving Rs 70,000 — a clear reason to get on the Active Taxpayers List by filing your return.

This is a simplified estimate. Rates change with each Finance Act, treaty residents and certain shareholders get different treatment, and exemptions apply. All figures are computed locally in your browser and are not tax advice.