What rate of withholding tax is deducted from doctors', lawyers' and accountants' fees in tax year 2027?

The 15% figure reported for doctors and lawyers comes from one sub-paragraph of the First Schedule to the Income Tax Ordinance, 2001. It is a withholding rate, deducted by certain payers from professional fees, and it applies from 1 July 2026 for tax year 2027. It is not an income tax slab rate.

What does the law say?

Section 153(1)(b): who deducts and on what. Every prescribed person making a payment, including an advance, to a resident person for the rendering or providing of services must deduct tax from the gross amount payable, including sales tax if any, at the rate in Division III of Part III of the First Schedule. Payments for services under thirty thousand rupees in aggregate during a financial year are excluded.

Section 153(7): professional services are “services”. The definition says “services” includes “the services of accountants, architects, dentists, doctors, engineers, interior decorators and lawyers, otherwise than as an employee”. Fees paid to an employee fall under salary instead.

Division III, paragraph (2)(ii): the rate. As substituted by the Finance Act, 2026, sub-paragraph (ii) reads: “15% in the case of independent professional services such as doctors, lawyers, architects, accountants, software engineers or developers, working independently”.

Section 153(3): minimum tax. Tax deductible under section 153(1) on the income of a resident person is minimum tax. The explanation says the income meant is the amount on which tax is deductible.

How does it work in practice?

For tax year 2027, paragraph (2) of Division III now has five sub-paragraphs:

Sub-paragraph	Services	Rate
(i)	A listed group including transport, IT, engineering and architectural services, car rental and others	7% (4% for IT and IT enabled services)
(ii)	Independent professional services such as doctors, lawyers, architects, accountants, software engineers or developers, working independently	15%
(iii)	Advertising services, paid to electronic and print media	1.5%
(iv)	Terminal and port operating services, paid to companies	12%
(v)	Services not covered in (i) to (iv)	14%

How the rate has moved. Footnotes in the consolidated text show the history for professional fees received by someone other than a company:

Period	Rule	Rate
Before the Finance Act, 2025	Services other than sub-paragraph (i), “in any other case”	11% (9% for companies)
Tax year 2026 (Finance Act, 2025)	Services other than sub-paragraph (i)	15%
Tax year 2027 (Finance Act, 2026)	Independent professional services, named	15%

So the Finance Act, 2026 did not raise the professional rate. It separated professionals from other services, kept them at 15%, and set 14% for the remaining unlisted services.

Worked example (illustrative figures)

Advocate Hamza Butt of Rawalpindi bills a private limited company Rs. 500,000 for legal work in August 2026. The figures are invented.

1. The company is a prescribed person and the payment is above the thirty thousand rupee threshold.
2. Deduction: Rs. 500,000 × 15% = Rs. 75,000.
3. Paid to him: Rs. 500,000 minus Rs. 75,000 = Rs. 425,000.
4. In his return the fee counts as Rs. 500,000 of income, and the Rs. 75,000 is a minimum tax on it under section 153(3).

If he is not on the active taxpayers’ list. Rule 1 of the Tenth Schedule increases the deduction rate by hundred percent of the rate specified for persons not appearing in the list. On the same fee, 15% becomes 30%: Rs. 500,000 × 30% = Rs. 150,000.

What if …?

What if I am an architect or a software developer? Sub-paragraph (i) lists “engineering services including architectural services” and “software development services” at 7%, while sub-paragraph (ii) names architects and software engineers or developers working independently at 15%. The text does not say which applies when both descriptions fit. This page does not resolve that overlap.

What if my profession is not named? Sub-paragraph (ii) says “such as”, so the list is illustrative. Whether a particular profession counts as an independent professional service, or falls under the 14% rate in sub-paragraph (v), is not spelled out.

What if I want a lower rate certificate? Section 153(4) lets the Commissioner allow a reduced rate only in cases where the tax deductible under section 153(1) is not minimum. Tax on a resident professional’s service fees is minimum tax under section 153(3).

Common mistakes

• Treating 15% as the income tax rate. It is deducted at source. Tax on the year’s income still comes from the slab table, with the 15% setting a floor for those fees.
• Expecting patients to deduct. Only prescribed persons deduct under section 153.
• Assuming 2026 was a rate increase for professionals. The rate was 15% in tax year 2026 as well.
• Declaring only the net amount received. The gross fee is income.

What to check in the official text

Read section 153, especially sub-sections (1), (3), (4) and the definitions in (7), then paragraph (2) of Division III, Part III of the First Schedule in the official PDF, including its footnotes. Section 5 of the Finance Act, 2026 contains the amendment. Rule 1 of the Tenth Schedule covers persons not on the active taxpayers’ list. Provincial sales tax on legal, accounting or medical services is outside this corpus and is not covered here.