How is income tax on an electricity bill worked out?
The company preparing the bill adds advance tax under section 235 in the same way it charges for electricity. The tax is worked out on the gross bill, inclusive of sales tax and all incidental charges, using the table in Division IV of Part IV of the First Schedule.
Commercial and industrial consumers
| Gross amount of bill | Tax |
|---|---|
| Up to Rs 500 | Rs 0 |
| Exceeds Rs 500 but does not exceed Rs 20,000 | 10% of the amount |
| Exceeds Rs 20,000 | Rs 1,950 plus 12% of the amount exceeding Rs 20,000 for commercial consumers, Rs 1,950 plus 5% for industrial consumers |
The middle band reads "10% of the amount". Read literally, that is 10% of the whole bill, which is what this calculator uses. The Rs 1,950 in the top band equals 10% of the amount between Rs 500 and Rs 20,000, which suggests the middle band may be meant as 10% of the amount above Rs 500. The text does not settle this, so the calculator shows the second reading alongside. On the literal reading a bill of Rs 20,000 carries Rs 2,000, more than the Rs 1,950 on a bill just above Rs 20,000.
Domestic consumers
| Monthly bill | Tax |
|---|---|
| Less than Rs 25,000 | 0% |
| Rs 25,000 or more | 7.5% of the bill |
The domestic rate applies to the whole bill once it reaches Rs 25,000. The proviso to section 235(1) takes a domestic consumer on the Active Taxpayers' List out of the section altogether.
Is the tax adjustable or a minimum tax?
Section 235(4) answers this by who the taxpayer is. For a company, the tax collected is adjustable against its tax liability. For a taxpayer other than a company, tax collected up to a bill amount of Rs 360,000 a year is minimum tax and no refund is allowed, and tax collected on a monthly bill over and above Rs 30,000 is adjustable. The text does not say whether clause (b) covers all the tax on such a bill or only the tax on the part above Rs 30,000, so this calculator does not split the figure.
Section 235(3) says the tax is not collected from a person who produces a certificate from the Commissioner that their income is exempt, or that they have discharged advance tax liability under section 147, or whose entire income is under the final or minimum tax regime under a provision other than section 235.
Where the rates come from
Every rate is read from the Income Tax Ordinance, 2001 as consolidated by FBR. The rates on this page were last checked against the official text on 2026-09-26.
- Income Tax Ordinance, 2001, section 235, electricity consumption, printed pages 479 to 480 (as amended to 2026-06-30) official file
- Income Tax Ordinance, 2001, First Schedule, Part IV, Division IV, electricity consumption, printed page 555 (as amended to 2026-06-30) official file
- Income Tax Ordinance, 2001, Tenth Schedule, rule 10(i), printed page 784 (as amended to 2026-06-30) official file
- Income Tax Ordinance, 2001, section 181A, Active Taxpayers' List (as amended to 2026-06-30) official file
Common questions
How much income tax is charged on an electricity bill in Pakistan?
For commercial and industrial consumers, nothing up to Rs 500, 10% of the amount on a bill above Rs 500 up to Rs 20,000, and Rs 1,950 plus 12% (commercial) or 5% (industrial) of the amount above Rs 20,000. A domestic consumer not on the Active Taxpayers' List pays 7.5% where the monthly bill is Rs 25,000 or more.
Do domestic consumers on the Active Taxpayers' List pay tax on electricity bills?
No. The proviso to section 235(1) says the section does not apply to a domestic consumer whose name appears on the Active Taxpayers' List. Being on the list does not change the rate for commercial or industrial consumers.
Is the tax on an electricity bill adjustable or a minimum tax?
Section 235(4) splits it. For a company, the tax collected is adjustable against tax liability. For a taxpayer other than a company, tax collected up to a bill amount of Rs 360,000 a year is minimum tax with no refund, and tax collected on a monthly bill over Rs 30,000 is adjustable.
Is the tax worked out on the bill before or after sales tax?
The Explanation to section 235(2) says the electricity consumption bill means the bill inclusive of sales tax and all incidental charges. The tax is worked out on that gross amount.
Does the higher rate for people not on the Active Taxpayers' List apply to electricity bills?
No. Rule 10(i) of the Tenth Schedule says the Schedule does not apply to tax under section 235, so the 100% increase in rule 1 is not added to these rates.