Does super tax under section 4C apply to my company, and at what income level and rate?

Super tax is a separate charge on high incomes, added to normal income tax. Whether a company pays it depends on two things: which kind of person it is, and whether its “income” as defined in section 4C crosses the threshold for that kind of person. This page reads the Division IIB Table as it stands in the Income Tax Ordinance, 2001 amended to 30 June 2026.

What does the law say?

Section 4C(1) imposes super tax “for tax year 2022 and onwards at the rates specified in Division IIB of Part I of the First Schedule, on income of every person”. The charge is not limited to companies: it applies to every person, and the Table decides who actually pays.

The Finance Act, 2026 replaced the Division IIB Table with this one:

S. No.	Income under section 4C and person	Rate of tax
1	Income of a banking company exceeding Rs. 150 million	10% of the income
2	Income of a person, which is computed as per Part I of the Fifth Schedule, exceeding Rs. 150 million, so far as it does not exceed the limit specified in rule 4 of that Part	10% of the income
3	Income of a person engaged in deriving income from sale of any kind of fertilizer, exceeding Rs. 150 million	10% of the income
4	Income of a person other than those in S. No. 1, 2 and 3, exceeding Rs. 500 million	8% of the income

The Table replaced a sliding scale. The earlier Table (substituted by the Finance Act, 2025) charged graded percentages starting above Rs. 150 million and reached 10% above Rs. 500 million.

How does it work in practice?

Find the row. A banking company, a person with Fifth Schedule Part I income (the computation rules for petroleum exploration and production and certain related activities) and a fertilizer seller are tested against Rs. 150 million. Every other company, including manufacturers, traders, telecom, cement and textile companies, is tested against Rs. 500 million.

Work out the income. “Income” for super tax is not taxable income. Section 4C(2) builds it from profit on debt, dividends, capital gains, brokerage and commission, taxable income before brought-forward losses and depreciation, imputable income and Schedule income. The linked page on the super tax income base explains this in detail.

Apply the rate. The Table expresses each rate as a percentage “of the income”. It does not say “of the amount exceeding” the threshold, and nothing in the Table provides marginal relief.

Pay it. Section 4C(3) makes super tax payable on the date and in the manner that applies to tax on taxable income, which is the due date for furnishing the company’s return. Section 4C(5A) also applies section 147, so super tax is built into quarterly advance tax.

Worked example (illustrative figures)

Four companies, each with its section 4C income already worked out for the tax year:

Company	Row	Income under section 4C	Super tax
Indus Cement Limited, Chakwal	4	Rs. 620,000,000	8% x 620,000,000 = Rs. 49,600,000
Sutlej Agro Traders (Pvt) Ltd, Multan, which sells fertilizer	3	Rs. 200,000,000	10% x 200,000,000 = Rs. 20,000,000
Karachi Packaging Limited	4	Rs. 450,000,000	No row applies: nil
Karachi Packaging Limited, a year later	4	Rs. 510,000,000	8% x 510,000,000 = Rs. 40,800,000

The last two lines show how the Table reads as printed: moving from Rs. 450 million to Rs. 510 million moves the company from no super tax to Rs. 40,800,000, because the 8% is stated as a percentage of the whole income.

What if …?

What if the company is mainly an exporter? Clause (104B) of Part IV of the Second Schedule, inserted by the Finance Act, 2026, says section 4C does not apply to a person whose export proceeds realised for the tax year are more than eighty percent of total turnover for that year.

What if a company both sells fertilizer and does other business? Row 3 speaks of a person “engaged in deriving income from sale of any kind of fertilizer”. The Table does not say how income from other activities of the same person is treated. This is not resolved in the text held here.

What if the company has Fifth Schedule income above the rule 4 limit? Row 2 applies “so far as it does not exceed the limit specified in rule 4 of that Part”. The Table does not state what rate, if any, applies to the part above that limit. Read rule 4 of Part I of the Fifth Schedule in the official text.

Common mistakes

• Testing every company against Rs. 150 million. Since the Finance Act, 2026 Table, the Rs. 150 million threshold applies only to rows 1 to 3. Other companies are tested against Rs. 500 million.
• Using taxable income as the base. Section 4C(2) has its own definition, which adds back brought-forward losses and depreciation.
• Treating super tax as part of normal tax for minimum tax comparison. The Explanation to section 113(1) excludes tax under section 4C from “tax payable or paid” for that comparison.
• Leaving super tax out of advance tax. Section 4C(5A) applies section 147.

What to check in the official text

The Division IIB Table is hard to read in the consolidated source: the new Table and the replaced one are printed on the same pages, with rows of the old Table running on after the new one. Check the figures against the official PDF of the Ordinance and against the Finance Act, 2026, which prints the new Table cleanly. The new Table has no tax year column, and the Finance Act, 2026 came into force on 1 July 2026 unless it provides otherwise; confirm from the official text which tax year it first governs. Also read section 4C in full, clause (104A) and clause (104B) of Part IV of the Second Schedule, and rule 4 of Part I of the Fifth Schedule if row 2 applies to you.