How is advance tax on a vehicle worked out?
Section 231B has the Excise and Taxation registering authority collect advance tax when a motor vehicle is registered, and again when its registration or ownership is transferred. A manufacturer collects the same registration rate when it sells a motor car or jeep, under sub-section (3). The rates are in Division VII of Part IV of the First Schedule.
Registration, sub-sections (1) and (3)
| Engine capacity | Rate of tax | Not on the ATL |
|---|---|---|
| Up to 850cc | 0.5% of the value | 1.5% of the value |
| 851cc to 1000cc | 1% of the value | 3% of the value |
| 1001cc to 1300cc | 1.5% of the value | 4.5% of the value |
| 1301cc to 1600cc | 2% of the value | 6% of the value |
| 1601cc to 1800cc | 3% of the value | 9% of the value |
| 1801cc to 2000cc | 5% of the value | 15% of the value |
| 2001cc to 2500cc | 7% of the value | 21% of the value |
| 2501cc to 3000cc | 9% of the value | 27% of the value |
| Above 3000cc | 12% of the value | 36% of the value |
| Engine capacity not applicable, value Rs 5,000,000 or more | 3% of the value | 9% of the value |
The value is set by the proviso under the table. For a vehicle imported into Pakistan it is the import value assessed by Customs as increased by customs duty, federal excise duty and sales tax payable at import stage. For a vehicle manufactured or assembled locally it is the invoice value inclusive of all duties and taxes. For an auctioned vehicle it is the auction value inclusive of all duties and taxes.
Where engine capacity does not apply, the table sets a rate only when the value is Rs 5,000,000 or more. For a lower value it sets no rate, so the calculator shows nil. The proviso to section 231B(1) stops collection under that sub-section after five years from first registration for vehicles covered by clauses (a) and (b) of sub-section (6): those acquired from the Armed Forces or from a foreign diplomat or diplomatic mission. The proviso still refers to clause (c), which the Finance Act, 2026 omitted.
Transfer, sub-section (2)
| Engine capacity | Tax | Not on the ATL |
|---|---|---|
| Up to 850cc | Nil | Nil |
| 851cc to 1000cc | Rs 5,000 | Rs 15,000 |
| 1001cc to 1300cc | Rs 7,500 | Rs 22,500 |
| 1301cc to 1600cc | Rs 12,500 | Rs 37,500 |
| 1601cc to 1800cc | Rs 18,750 | Rs 56,250 |
| 1801cc to 2000cc | Rs 25,000 | Rs 75,000 |
| 2001cc to 2500cc | Rs 37,500 | Rs 112,500 |
| 2501cc to 3000cc | Rs 50,000 | Rs 150,000 |
| Above 3000cc | Rs 62,500 | Rs 187,500 |
| Engine capacity not applicable, value Rs 5,000,000 or more | Rs 20,000 | Rs 60,000 |
The second proviso to clause (2) of Division VII says the tax "shall be reduced by ten percent each year from the date of first registration in Pakistan". The calculator takes off 10% of the table amount for each complete year. The text does not say whether the reduction compounds, so a reading of 10% off the previous year's figure would give slightly higher amounts. The proviso to section 231B(2) says no tax is collected on transfer after five years from the date of first registration.
| Complete years since first registration | Share of the table amount |
|---|---|
| 0 | 100% |
| 1 | 90% |
| 2 | 80% |
| 3 | 70% |
| 4 | 60% |
| 5 or more | Nil |
People not on the Active Taxpayers' List
The first proviso to rule 1 of the Tenth Schedule says tax collected under section 231B "shall be increased by two hundred percent of the rate specified in First Schedule" for persons not on the Active Taxpayers' List. The calculator multiplies the First Schedule figure by 3.
Where the rates come from
Every rate is read from the Income Tax Ordinance, 2001 as consolidated by FBR. The rates on this page were last checked against the official text on 2026-09-26.
- Income Tax Ordinance, 2001, section 231B, advance tax on motor vehicles, printed pages 473 to 475 (as amended to 2026-06-30) official file
- Income Tax Ordinance, 2001, First Schedule, Part IV, Division VII, printed pages 558 to 560 (as amended to 2026-06-30) official file
- Income Tax Ordinance, 2001, Tenth Schedule, rule 1, first proviso, printed page 779 (as amended to 2026-06-30) official file
- Income Tax Ordinance, 2001, section 181A, Active Taxpayers' List (as amended to 2026-06-30) official file
- Income Tax Ordinance, 2001, section 148, imports (as amended to 2026-06-30) official file
Common questions
How much advance tax is paid on registering a car in Pakistan?
Under section 231B read with Division VII of Part IV of the First Schedule, the tax is a percentage of the vehicle's value set by engine capacity: 0.5% up to 850cc, rising through 1%, 1.5%, 2%, 3%, 5%, 7% and 9% to 12% above 3000cc. Where engine capacity does not apply and the value is Rs 5 million or more, the rate is 3%.
What value is the registration tax worked out on?
The proviso to the table says the value is, for an imported vehicle, the import value assessed by Customs as increased by customs duty, federal excise duty and sales tax payable at import stage; for a locally manufactured or assembled vehicle, the invoice value inclusive of all duties and taxes; and for an auctioned vehicle, the auction value inclusive of all duties and taxes.
How much is the advance tax on transfer of a car?
Transfer tax under section 231B(2) is a fixed amount by engine capacity, from nil up to 850cc to Rs 62,500 above 3000cc. It is reduced by ten percent each year from the date of first registration in Pakistan, and no tax is collected on transfer after five years from that date.
How much more does a person not on the Active Taxpayers' List pay?
The first proviso to rule 1 of the Tenth Schedule increases the tax collected under section 231B by two hundred percent of the First Schedule rate for persons not on the Active Taxpayers' List. The amount is three times the listed figure.
Is advance tax on vehicles adjustable?
Yes. Section 231B(5) says the advance tax collected under the section shall be adjustable. The section does not apply to the Federal Government, a Provincial Government, a Local Government, a foreign diplomat or a diplomatic mission in Pakistan.
Is tax collected again at registration if it was paid when buying the car?
Section 231B(4) says sub-section (1) does not apply if the person shows that tax was collected from the same person for the same vehicle under sub-section (3), for a locally manufactured vehicle, or under section 148, for an imported vehicle.