How much tax is deducted on dividends if I am not on the Active Taxpayers List?

A shareholder who is not on the Active Taxpayers List (ATL) has tax deducted from dividends at double the normal rate. The law then limits the final tax to the normal rate, but only if the shareholder files a return in time. The rules below are from the Income Tax Ordinance, 2001 as amended to 30 June 2026 and apply to dividends paid in tax year 2027.

What does the law say?

Section 150 makes every person paying a dividend deduct tax from the gross amount at the rate in Division I of Part III of the First Schedule. Section 100BA(1) says the deduction of tax, and the computation of income and tax, for a person not appearing on the active taxpayers’ list “shall be determined in accordance with the rules in the Tenth Schedule”. Section 100BA(2) gives the Tenth Schedule effect “notwithstanding anything to the contrary contained in this Ordinance”.

Rule 1 of the Tenth Schedule then provides that where tax is to be deducted from a person not on the ATL, “the rate of tax required to be deducted or collected, as the case may be, shall be increased by hundred percent of the rate specified in this Ordinance.” Rule 10 lists sections to which the Schedule does not apply, and section 150 is not among them.

What are the resulting rates?

Applying rule 1 to each clause of Division I:

Clause	Dividend	Normal rate	Rate if not on the ATL
(a)	Qualifying IPP pass-through dividend	7.5%	15%
(b)	REIT and all other cases	15%	30%
(ba)	Mutual fund, debt and equity components	25% and 15%	50% and 30%
(c)	From a REIT Special Purpose Vehicle to a non-REIT recipient	35%	70%
(d)	From a company with no tax payable due to exemption, losses or credits	25%	50%

These figures are the arithmetic of rule 1, which adds one hundred percent of the Division I rate. The Ordinance does not print a separate non-filer column for dividends.

Is the doubled tax the final tax?

No, not necessarily. Tax on dividends is a final tax, as the related page on final tax explains. Section 169(4) then deals with final taxes that the Tenth Schedule has doubled: “the final tax shall be the tax rate prescribed in the First Schedule and the excess tax collected under the Tenth Schedule specified for persons not appearing in the active taxpayers’ list shall be adjustable in case the return is filed before finalization of assessment as provided in rule 4 of the Tenth Schedule.”

The Tenth Schedule sets out that process:

• Rule 3. If tax was deducted under rule 1 and the person does not file a return by the due date, the Commissioner makes a provisional assessment within sixty days, imputing income from the tax deducted.
• Rule 4(1). The provisional assessment becomes final forty-five days after it is served.
• Rule 4(2). It abates if the returns and wealth statements for that year and the preceding year are filed within forty-five days of receiving it.
• Rule 4(3). Where returns were filed before the provisional assessment, or under rule 4(2), the rule 1 tax “shall be adjustable against the tax payable in the return filed for the relevant tax year.”

Worked example (illustrative figures)

Rehana, a homemaker in Hyderabad, is not on the ATL when a fertiliser company pays her a gross dividend of Rs. 400,000 in tax year 2027. The company paid tax on its own income, so clause (b) applies.

1. Normal rate: 15%.
2. Rule 1 increase: 15% + (100% x 15%) = 30%.
3. Tax deducted: Rs. 400,000 x 30% = Rs. 120,000. She receives Rs. 280,000.
4. Final tax under section 169(4) at the First Schedule rate: Rs. 400,000 x 15% = Rs. 60,000.
5. Excess: Rs. 120,000 - Rs. 60,000 = Rs. 60,000, adjustable if she files her return before the assessment is finalised under rule 4.

If she had been on the ATL, only Rs. 60,000 would have been deducted in the first place.

What if I live abroad?

Clause (111A) of Part IV of the Second Schedule says the provisions of section 100BA and rule 1 of the Tenth Schedule “shall not apply to the extent of payment of dividend to non-resident persons.” A non-resident shareholder is therefore not subject to the doubling on dividends. The ordinary rate for non-residents is outside this page.

What about someone on the ATL who filed late?

Section 100BA(1) also refers to persons on the ATL who have not filed by the due date. Rule 1A, which set rates for that group, was omitted by the Finance Act, 2026, and rule 1 as printed speaks only of persons “not appearing in the active taxpayers’ list”.

Common mistakes

• Treating the 30% as the dividend tax rate. Section 169(4) sets the final tax at the First Schedule rate.
• Assuming the excess comes back automatically. Section 169(4) and rule 4(3) make it adjustable against tax in a return filed in time.
• Doubling the rate for a non-resident. Clause (111A) excludes dividends paid to non-residents.

What to check in the official text

Read sections 100BA, 150 and 169(4), rules 1, 3, 4 and 10 of the Tenth Schedule, Division I of Part III of the First Schedule and clause (111A) of Part IV of the Second Schedule in the official PDF. Whether you appear on the ATL on the payment date is a matter of FBR’s published list, which is outside this corpus.