How the Pakistan business income tax calculator is verified

Inputs

Input	Field	Type
Business or professional receipts for the year (PKR)	`annualTurnover`	number
Deductible business expenses (PKR)	`annualExpenses`	number

The formula

Each derived value below is computed by the Valem engine from the expression shown, in this order. Nothing else runs — there is no hidden code path.

Derived value	Field	Formula (JSONata)
Taxable income	`taxableIncome`	`$round($max([0, $n(annualTurnover) - $n(annualExpenses)]), 2)`
Income tax (Division I clause 1)	`incomeTax`	`$round($bandedCharge(taxableIncome, [{"upTo": $const.band1, "rate": $const.rate0}, {"upTo": $const.band2, "rate": $const.rate1}, {"upTo": $const.band3, "rate": $const.rate2}, {"upTo": $const.band4, "rate": $const.rate3}, {"upTo": $const.band5, "rate": $const.rate4}, {"upTo": null, "rate": $const.rate5}]), 2)`
Surcharge 10% (taxable income above Rs10 million)	`surcharge`	`taxableIncome > $const.surchargeThreshold ? $round(incomeTax * $const.surchargeRate, 2) : 0`
Tax incl. surcharge	`totalTax`	`$round(incomeTax + surcharge, 2)`
Income after tax	`netIncome`	`$round($max([0, taxableIncome - totalTax]), 2)`

Rates and thresholds

The expressions above read these as $const. They are the figures the annual refresh replaces, so they live as data rather than being written into the formulas — which is what makes a year-on-year change a one-line diff instead of an edit to arithmetic.

Constant	Value
`band1`	600000
`band2`	1200000
`band3`	1600000
`band4`	3200000
`band5`	5600000
`rate0`	0
`rate1`	0.15
`rate2`	0.2
`rate3`	0.3
`rate4`	0.4
`rate5`	0.45
`surchargeRate`	0.1
`surchargeThreshold`	10000000

Test vectors (6)

Every case is executed against this model on each build, by the Java engine and independently by a JavaScript one. A mismatch of a single cent fails the build, so the page cannot ship advertising a figure the model no longer produces.

Case 1 — S1 Rs3,000,000 of profit: Rs170,000 + 30% of Rs1,400,000 = Rs590,000

given `annualTurnover`	5000000
given `annualExpenses`	2000000
expect `taxableIncome`	3000000
expect `incomeTax`	590000
expect `surcharge`	0
expect `totalTax`	590000
expect `netIncome`	2410000

Case 2 — S2 Rs12,000,000 of profit: Rs1,610,000 + 45% of Rs6,400,000, plus the 10% surcharge

given `annualTurnover`	20000000
given `annualExpenses`	8000000
expect `incomeTax`	4490000
expect `surcharge`	449000
expect `totalTax`	4939000
expect `netIncome`	7061000

Case 3 — S3 exactly Rs10,000,000: not “exceeds”, so no surcharge

given `annualTurnover`	10000000
given `annualExpenses`	0
expect `incomeTax`	3590000
expect `surcharge`	0

Case 4 — S4 Rs600,000 of profit: nil band

given `annualTurnover`	900000
given `annualExpenses`	300000
expect `incomeTax`	0
expect `netIncome`	600000

Case 5 — S5 Rs1,600,000 of profit: the table’s Rs170,000

given `annualTurnover`	1600000
given `annualExpenses`	0
expect `incomeTax`	170000

Case 6 — S6 expenses above receipts: no taxable income

given `annualTurnover`	1000000
given `annualExpenses`	1500000
expect `taxableIncome`	0
expect `totalTax`	0
expect `netIncome`	0

Sources

Income Tax Ordinance 2001 (FBR, amended to 30 June 2026), First Schedule Pt I Div I(1) · checked 2026-11-01
Income Tax Ordinance 2001 s.4AB: 10% surcharge above Rs10 million · checked 2026-11-01
FBR Circular 02 of 2026-27 (8 Sep 2026): surcharge stays 10% for non-salaried · checked 2026-11-01

Check it yourself — and reuse it

The whole model as JSON — inputs, outputs, formulas, vectors and sources in one re-runnable document.

This model is published under CC BY 4.0: use it, adapt it, build on it, with attribution. The licence covers the model — the expression of each rule and the arrangement of the catalog. The rates and thresholds are law, and nobody licenses those; the sources above are where they come from.

← Back to the Pakistan business income tax calculator

Built with Valem — a live, verifiable calculator you can fork and embed.