The withholding tax rate for Information Technology (IT) and IT-enabled services will remain at 4% for the fiscal year 2025-26, as per the Federal Board of Revenue (FBR) income tax circular.
The circular clarifies that, under the provisions of the Finance Act, 2025, the withholding tax rates for unspecified services under Section 153 will be increased to 15%, while the rates for specified services under Sections 152 and 153 will rise from 4% to 8% and 6%, respectively.Â
However, IT and IT-enabled services are exempted from the hike and will continue to be taxed at 4%, in line with previous years.
Previously, withholding tax on non-categorized services was 9% for companies and 11% for others, while the rate for sports persons was 10%. This adjustment is part of the government’s ongoing tax policy revisions aimed at standardizing rates across different sectors.
