# Car tax calculator Islamabad 2026-27 — token and advance tax

Source page: https://valem.run/calculators/pakistan/car-tax

A new car registered in Islamabad pays advance income tax of 0.5% to 12% of its invoice value on registration, then each year a motor vehicle tax of 0.25% of the value (0.35% above 2000cc) and a fixed advance income tax; a car up to 1000cc pays Rs20,000 for life instead.

**Tax year:** 2026-27

## How it is calculated

The **Finance Act 2026** set the motor vehicle (token) tax for the **Islamabad Capital Territory** from 1 July 2026: **Rs20,000 for life** up to 1000cc, **0.25%** of the invoice value a year from 1001cc to 2000cc and **0.35%** above. With it, section 234 of the Income Tax Ordinance collects an advance income tax from **Rs1,500** to **Rs10,000** a year by engine size above 1000cc; up to 1000cc it is a **Rs10,000** lump sum with the lifetime tax.

On registration, section 231B collects advance income tax of **0.5%** up to 850cc, then 1%, 1.5%, 2%, 3%, 5%, 7% and 9%, and **12%** above 3000cc, of the value including duties and taxes. A new 1500cc car with a Rs6 million invoice pays Rs120,000 once, then Rs15,000 + Rs3,750 a year — **Rs138,750** in the first year.

Someone not on the FBR active taxpayers’ list pays the section 231B tax **three times over** (+200%) and the section 234 tax twice (Tenth Schedule). Electric cars, the registration fee, cars over ten years old and other provinces are not modelled; the page asks for an engine size of at least 1cc. Estimate, not tax advice.

## Worked example

With Invoice value of the car of 6,000,000, this model computes First year 138,750 PKR.

## Inputs

| Name | Label | Type |
| --- | --- | --- |
| `vehicleValue` | Invoice value of the car (PKR) | number |
| `engineCc` | Engine capacity (cc) | number |
| `activeTaxpayer` | On the FBR active taxpayers’ list | boolean |
| `newCar` | New car — first registration in Islamabad this year | boolean |

## Sources

- [Finance Act 2026 s.2: ICT motor vehicle tax, Table 2](https://download1.fbr.gov.pk/Docs/20266291261044366FinanceAct2026.pdf) (checked 2026-11-01)
- [Income Tax Ordinance 2001 s.231B, First Schedule Pt IV Div VII(1)](https://download1.fbr.gov.pk/Docs/2026724177725705IncomeTaxOrdinanace2001.pdf) (checked 2026-11-01)
- [Income Tax Ordinance 2001 s.234, First Schedule Pt IV Div III(3)–(4)](https://download1.fbr.gov.pk/Docs/2026724177725705IncomeTaxOrdinanace2001.pdf) (checked 2026-11-01)
- [Income Tax Ordinance 2001, Tenth Schedule rule 1: +200% / +100% off the list](https://download1.fbr.gov.pk/Docs/2026724177725705IncomeTaxOrdinanace2001.pdf) (checked 2026-11-01)

## What this page claims

The Valem engine reproduces this model's formula through 7 self-test cases. That shows internal consistency, not that the formula matches current law; the cited sources are the evidence for that. Estimate, not tax advice.

## For agents

- Model manifest (formula, constants, test vectors): https://valem.run/calculators/pakistan/car-tax.json
- Compute by URL: https://valem.run/calculators/pakistan/car-tax.json?vehicleValue=6000000
- MCP: https://valem.run/mcp/calculators (call `calculate` with calculator `pakistan/car-tax`)