Gari transfer par tax kitna lagta hai? How much tax is collected when a used car is transferred into my name?

When a used car changes hands and the registration is moved into the buyer’s name, the Excise and Taxation office collects income tax in advance as well as its own provincial fees. This page covers only the federal income tax part, under the Income Tax Ordinance, 2001 as amended to 30 June 2026, which applies to tax year 2027.

What does the law say?

Section 231B(2) requires every motor vehicle registering authority of the Excise and Taxation Department to collect advance tax at the time of transfer of registration or ownership of a motor vehicle, at the rates in Division VII of Part IV of the First Schedule. The proviso to section 231B(2) stops the collection once five years have passed from the date of first registration in Pakistan.

Clause (2) of Division VII sets a fixed rupee amount by engine capacity:

Engine capacity	Tax on transfer
Up to 850cc	Nil
851cc to 1000cc	Rs. 5,000
1001cc to 1300cc	Rs. 7,500
1301cc to 1600cc	Rs. 12,500
1601cc to 1800cc	Rs. 18,750
1801cc to 2000cc	Rs. 25,000
2001cc to 2500cc	Rs. 37,500
2501cc to 3000cc	Rs. 50,000
Above 3000cc	Rs. 62,500

Two provisos follow the table. The first says that where engine capacity is not applicable and the value of the vehicle is Rs. 5 million or more, the tax is Rs. 20,000. The second says the tax under clause (2) is reduced by ten percent each year from the date of first registration in Pakistan.

Unlike the new-car rates in clause (1), these amounts do not depend on the price the buyer pays.

How does it work in practice?

The registering authority collects the tax at the transfer, so the amount is paid before the transfer is recorded. Section 231B(5) makes it adjustable advance tax, and the same sub-section excludes the Federal, Provincial and Local Governments, foreign diplomats and diplomatic missions.

Section 231B(7) sets which vehicles are covered: cars, caravan automobiles, jeeps, limousines, pickups, SUVs, trucks, vans, wagons and other automobiles, but not vehicles used for public transportation, carriage of goods or agriculture machinery, rickshaws and motorcycle rickshaws, or any vehicle up to 200cc.

Who pays: the buyer or the seller?

The Ordinance does not say. Section 231B(3), for a sale by a manufacturer, expressly collects from “the person to whom such sale is made”. Section 231B(2) names only the collector and the moment of collection, with no words about which party the tax is taken from. Section 231B(5) says the tax is adjustable but does not say against whose liability. In a private sale, who bears the cost is left to the parties, and this page does not supply a rule the text does not contain.

Worked example (illustrative figures)

Kamran in Faisalabad is buying a used 1,000cc car. Both he and the seller appear in the active taxpayers’ list.

1. Band: 851cc to 1000cc, table amount Rs. 5,000.
2. The ten percent yearly reduction in the second proviso then applies according to how long ago the car was first registered. The proviso does not spell out whether each year’s ten percent is taken from the original Rs. 5,000 or from the reduced figure, so check the working with the registering authority.
3. If the car was first registered six years ago, nothing is collected under section 231B(2), because the five-year limit in the proviso has passed.

Now take a 1,800cc car first registered in the current year, with the person from whom tax is collected not in the active taxpayers’ list:

1. Band: 1601cc to 1800cc, table amount Rs. 18,750, before any yearly reduction.
2. Tenth Schedule increase of two hundred percent: Rs. 18,750 x 3 = Rs. 56,250.

What if the person is not on the active taxpayers’ list?

The first proviso to rule 1 of the Tenth Schedule increases tax under section 231B by two hundred percent of the First Schedule rate for a person not appearing in the active taxpayers’ list. On transfer that means three times the table amount: for example Rs. 7,500 becomes Rs. 22,500 for a 1,300cc car, and Rs. 12,500 becomes Rs. 37,500 for a 1,600cc car. Because section 231B(2) does not say whose status matters, the text does not settle whether the buyer’s or the seller’s list status decides the uplift.

Common mistakes

• Confusing this with the provincial transfer fee. The Excise office also charges provincial transfer fees and motor vehicle tax. Those are provincial levies outside this corpus.
• Applying the new-car percentages to a used car. A transfer uses the fixed amounts in clause (2), not the percentage table in clause (1).
• Paying on an old car. After five years from first registration in Pakistan, the proviso to section 231B(2) means no transfer advance tax is collected.

What to check in the official text

Read section 231B(2), (5), (6) and (7), and clause (2) of Division VII of Part IV of the First Schedule with both provisos. Clause (c) of section 231B(6), about unregistered vehicles bought from a government, was omitted by the Finance Act, 2026, so the remaining clauses define the date of first registration. For older cars, the related page on transfer tax for older vehicles looks at the yearly reduction in more detail.