As per Lawkidunya, In Pakistan, tax on rental income is governed by the Income Tax Ordinance, 2001. Here’s an overview:

Tax Rates on Rental Income in Pakistan

1. 5% tax rate: Applies to rental income from immovable property, including houses, apartments, and commercial buildings, if the gross rental income does not exceed Rs. 200,000 per annum.
2. 10% tax rate: Applies to rental income from immovable property if the gross rental income exceeds Rs. 200,000 but does not exceed Rs. 1,000,000 per annum.
3. 20% tax rate: Applies to rental income from immovable property if the gross rental income exceeds Rs. 1,000,000 per annum.

Tax Deductions on Rental Income in Pakistan

1. Municipal Taxes: Deductible from rental income.
2. Repairs and Maintenance: Deductible from rental income, subject to a maximum of 10% of the gross rental income.
3. Interest on Mortgage: Deductible from rental income, subject to certain conditions.
4. Depreciation: Deductible from rental income, subject to certain conditions.

Tax Filing Requirements

1. Tax Return: Taxpayers must file a tax return (Form A) to report rental income.
2. Statement of Assets and Liabilities: Taxpayers must file a statement of assets and liabilities (Form B) to report immovable property assets.
3. Supporting Documents: Taxpayers must maintain supporting documents, such as rental agreements, receipts, and bank statements.

Penalties for Non-Compliance

1. Late Filing Fee: A penalty of Rs. 20,000 to Rs. 50,000 for late filing of tax return.
2. Default Surcharge: A penalty of up to 25% of the tax due for non-payment or underpayment of tax.
3. Prosecution: Taxpayers may be prosecuted for tax evasion or non-compliance with tax laws.

It’s essential to consult with a tax professional or the Federal Board of Revenue (FBR) to ensure compliance with the tax laws and regulations in Pakistan.