August 19, 2025 Islamabad, August 2025 – The Federal Board of Revenue (FBR) has issued the latest withholding tax card for pension income applicable for the tax year 2025-26. The notification clarifies tax obligations for retired individuals, particularly pensioners under the age of 70, bringing important changes after amendments made through the Finance Act 2025. According to the FBR, withholding tax on pension will be collected under Section 149(IA) of the Income Tax Ordinance, 2001. Under the new rules, any pension amount up to Rs. 10 million per year will remain fully exempt from tax. However, where annual pension income exceeds Rs. 10 million, the excess amount will be subject to a 5% tax along with an additional surcharge of 10%. The FBR explained that pensioners above 70 years of age will continue to enjoy exemption, even if their annual receipts surpass the Rs. 10 million threshold, according to PkRevenue report. In cases where a retired employee continues to work with the same employer or any associated company, the treatment of their pension will follow the normal income tax slab rates applicable under Section 149, Division I of Part I of the First Schedule of the Ordinance. It is also important to note that private pension…