Income tax on electricity bills
Definition. Income tax on an electricity bill is advance tax collected at source under the Income Tax Ordinance, deducted by the DISCO and adjustable against the consumer's annual tax liability rather than being a charge for electricity.
Also called: Withholding tax · WHT · Advance income tax · I. Tax u/s 235
Where you see it: In the taxes block, often labelled 'I. Tax' or with a section reference such as 235.
Who it applies to
Commercial and industrial connections carry it as a matter of course, on a slab basis tied to the bill amount. Domestic consumers are drawn in when the bill crosses a threshold and the holder is not on the active taxpayers list.
Being on the active taxpayers list is the practical difference for a household: filers above the threshold are treated differently from non-filers, and the gap has widened in recent finance acts.
It is a credit, not a cost
This is the one line on the bill that you may get back. Advance tax deducted here is adjustable against your income tax for the year, and it is claimed in the annual return.
To claim it you need the bills. Keep the twelve monthly bills for the tax year, or download the duplicates, and total the income tax line — that figure goes into the tax-deducted section of the return.
Getting it out of the bill entirely
For a domestic consumer, appearing on the active taxpayers list is what removes or reduces the deduction going forward. The DISCO applies the treatment recorded against the account's CNIC.
If your filer status is current but the deduction continues, the account's CNIC record is likely stale. Updating it at the customer services centre is the fix.
Frequently asked questions
Is the tax on my bill refundable in cash?
It is adjustable first — set against the tax you owe for the year. If the deduction exceeds your liability, the excess becomes a refund claim through the return, not something the DISCO can pay back at the counter.
The meter is in my late father's name. Can I claim the tax?
No. The credit belongs to the person whose name and CNIC the bill is issued in, which is one of several reasons to complete a title transfer rather than leaving an inherited account unchanged.
Related terms
- General sales tax on electricity — Why the GST figure on your bill jumps in months when your units barely moved, what sits inside its tax base, and which consumers are exempt.
- Electricity duty — The small provincial percentage on your electricity bill: who levies it, why the rate differs between Punjab, Sindh, KP and Balochistan, and what it is calculated on.
Go further
Back to the full 44-term glossary, or open your own bill with the reference number lookup.