Where to find it on your bill
Look for a line called "Income Tax" or "Adv. Income Tax" in the taxes section of your LESCO, K-Electric, IESCO or other DISCO bill. It's separate from sales tax, electricity duty and the TV fee. Many people only notice it when their summer bill crosses Rs 25,000 for the first time.
Rates for FY 2026-27
Domestic
| Monthly bill | Income tax |
|---|---|
| Up to Rs 25,000 | Nil |
| Above Rs 25,000 | 7.5% of the bill |
Commercial and industrial
| Monthly bill | Commercial | Industrial |
|---|---|---|
| Up to Rs 500 | Nil | Nil |
| Rs 501 – 20,000 | 10% | 10% |
| Above Rs 20,000 | Rs 1,950 + 12% of the excess | Rs 1,950 + 5% of the excess |
Examples
- A home bill of Rs 22,000: no income tax.
- A home bill of Rs 30,000: Rs 2,250 income tax.
- A shop bill of Rs 45,000: Rs 1,950 + 12% of Rs 25,000 = Rs 4,950.
- A small factory bill of Rs 300,000: Rs 1,950 + 5% of Rs 280,000 = Rs 15,950.
The Rs 25,000 cliff
For domestic users, the 7.5% applies to the whole bill once it crosses Rs 25,000, not just the part above it. So a Rs 25,500 bill attracts about Rs 1,900 in tax, while a Rs 24,900 bill has none. In summer it's worth watching your units near that line, especially if an extra AC is the difference.
Can you claim it back?
Yes, in most cases. Income tax on electricity bills is an advance tax. If the connection is in your name and you file a return, you can adjust it against your tax for the year. Salaried people often overlook this, and over twelve summer-heavy months it can add up to a decent amount. For commercial users with smaller bills, part of it may be treated as a minimum tax instead.
The key is that the meter must be in your name, or you must be able to show you're the one paying. If the connection is still in a previous owner's or landlord's name, you can't claim it.
Non-filers
Higher rates and extra charges have applied to non-filers on utility bills in recent budgets. If you're not on the Active Taxpayers List, the actual deduction on your bill may be higher than this calculator shows.
Tenants and landlords
In rented homes, the meter is usually in the landlord's name, which means the tenant pays the tax but can't claim it. If you rent long-term and your bills regularly cross Rs 25,000, it may be worth asking your landlord to transfer the connection to your name, or at least keep copies of bills you've paid along with your rent agreement.
Checking your bill step by step
- Find the "current bill" amount before taxes. That's the base this tax is worked out on.
- Check whether it's over Rs 25,000 for a home connection.
- Look at the income tax line. It should be close to 7.5% of the base.
- If it's much higher, your connection may be flagged as non-filer, or as commercial. Call your DISCO's helpline with the reference number from the bill.
Mistakes do happen, especially when a property changes hands or a meter is replaced. A two-minute check each month can catch one early.
Solar and net metering
Homes with rooftop solar and net metering often see their bills drop below Rs 25,000, which takes them out of this tax entirely. The tax is worked out on what you actually owe for the month, after units exported to the grid are set off. During winter, many solar homes pay little or nothing.
Related calculators
- Mobile and internet tax calculator, for the other utility tax you can adjust in your return.
- Filing guide, to see where to claim utility taxes on IRIS.
- Rental income tax calculator, if you're a landlord with tenants on your meter.
Frequently asked questions
Is there income tax on home electricity bills?
Only when the monthly bill exceeds Rs 25,000. Then 7.5% of the bill is added.
Is the tax on the whole bill or the excess?
For domestic users, 7.5% applies to the whole bill once it crosses Rs 25,000.
Can I adjust this tax in my return?
Yes, if the connection is in your name. It is an advance tax adjustable against your yearly liability.
What do shops pay?
Commercial bills pay 10% from Rs 501 to Rs 20,000, then Rs 1,950 plus 12% of the amount above Rs 20,000.
Rates: Income Tax Ordinance 2001 and its schedules as amended by the Finance Act 2026, plus FBR's withholding tax rate card for Tax Year 2027. Results are estimates. Check with FBR or a tax adviser before acting on them.