Planning · §62 · Tax Year 2026-2027
Section 62 Investment Tax Credit Calculator
See the tax credit for investing in listed company shares or life insurance premiums under Section 62, and how much it reduces your income tax.
Withdrawn for recent years. Section 62 was omitted by the Finance Act 2022, so this credit is generally not available from tax year 2023 onward. The tool is kept for earlier years and for reference — confirm the position for your year before relying on it.
Step by step
How the §62 credit is worked out
Enter your taxable income
Your annual taxable income sets your income tax and the 20%-of-income eligibility cap.
Enter your investment
Amount invested in listed shares or paid as life insurance premium during the year.
We cap the eligible amount
Eligible = lower of your investment, 20% of income, or Rs 2,000,000.
See your credit
Your average rate of tax is applied to the eligible amount, and the result is subtracted from your income tax.
Good to know
Making the most of §62
Three-way cap
Because eligibility is the lowest of three limits, higher earners hit the Rs 2,000,000 investment cap first (max credit Rs 400,000).
No refund
The credit only offsets tax you owe. If your tax is already low, part of the credit may be unused.
Mind the holding rule
Dispose of the shares too early and the credit is clawed back — plan to hold for the required period.
Reading the result
A credit reduces tax; a deduction reduces income
This distinction decides how much a relief is actually worth, and the two words get used interchangeably when they should not be.
A deduction comes off your taxable income, so it is worth your marginal rate. A credit comes off the tax itself. For anyone in a lower band a credit is usually the better instrument, which is why the structure of the relief matters as much as its size.
The holding condition has teeth
Where a credit depends on holding an investment for a minimum period, disposing of it early does not simply stop future credits — the relief already claimed can be brought back into charge. Anyone investing for the credit rather than for the asset should be sure they can leave the money where it is.
Check the provision is still live for your year
Reliefs in the Ordinance are amended and withdrawn by Finance Act, and guidance published online often describes a position that has since changed. Before planning around a credit, confirm it applies to the tax year you are filing for, not the year the article was written.
The tax credits and allowances calculator shows what currently sits alongside this.
Where this stops
This computes the credit from the figures you supply. It does not verify that your investment qualifies, which depends on the instrument and the issuer.
FAQs
Section 62 tax credit FAQs
What investments qualify for the §62 tax credit?
Investment in new shares of a listed public company or premium paid on a life insurance policy, made during the tax year, may qualify for a tax credit under Section 62 of the Income Tax Ordinance.
How is the credit calculated?
The eligible amount is the lower of your actual investment, 20% of your taxable income, or Rs 2,000,000. The credit is then your average rate of tax applied to that eligible amount — tax before credit, divided by taxable income, multiplied by the eligible amount. It is not a flat 20% of the investment: someone paying an average rate of 11.6% gets 11.6% of the eligible amount back, not 20%.
Can the credit exceed my tax or create a refund?
No. The credit only reduces your income tax, at most down to zero. It cannot produce a refund of tax you never owed.
Is there a holding period for shares?
Yes. If shares bought to claim the credit are disposed of within the required holding period, the credit is added back to your tax in the year of disposal.
Is the Section 62 credit still available?
Section 62 was omitted by the Finance Act 2022, so this credit is generally not available for tax year 2023 onward. The calculator is kept for earlier tax years, for amended or pending returns, and for reference. Confirm the position for the year you are filing with a tax professional before claiming it.
Which slabs does this use?
The Tax Year 2026-2027 salaried slabs, so the average rate reflects current-year tax. For an earlier year to which the credit actually applied, the average rate — and therefore the credit — would have been that year's.
Related tools
See your full income tax first
Work out your income tax, then come back to see how much a §62 investment could save you.
Open Income Tax Calculator