Withholding & Advance Tax · Section 236A · Tax Year 2026-2027
Auction Tax Calculator
Win a lot at auction and the tax is collected on the gross bid, on top of the price — by the department, court, bank or auctioneer running the sale. Work out the real cost before you bid.
Step by step
How auction tax is worked out
Take the gross bid
The hammer price for the goods, property, lease or right — not your expected resale value.
Check the ATL first
Bidding while off the Active Taxpayers List doubles the collection under the enhanced-rate mechanism.
Apply the right limb
Immovable property sold by auction carries a reduced rate; other lots do not.
Budget the total, not the bid
The tax is normally collected on top, so the cheque is bigger than the number you raised your hand for.
Good to know
Auction tax essentials
Any public auction counts
Government departments, courts, banks enforcing security and licensed auctioneers all collect it.
It is adjustable, not lost
Advance tax, creditable against your liability for the year — provided you hold the certificate.
Read the auction notice
Whether the advertised price is inclusive or exclusive of taxes changes what you actually pay.
Reading the result
On top of your bid, not inside it
The tax is collected on the gross bid in addition to the price, so the amount you actually pay to take the lot is the bid plus this. Bidders who budget to their limit and treat the hammer price as the total are short at settlement.
Work out the tax before bidding and set your ceiling on the all-in figure, not on the bid.
It applies to rights and leases too
This is not confined to physical goods. Auctions of a lease, a licence or a right to collect are within the same provision, which catches people bidding for a contract rather than for property and assuming a different regime applies.
Whoever conducts the auction collects
A government department, a court, a bank enforcing security or a private auctioneer all collect at the point of sale. There is no arrangement to settle it afterwards with FBR, so the money must be available on the day.
Where this stops
This works out the collection on a bid you enter. Whether the amount is credited against your own tax or is the end of the matter for that transaction depends on the nature of the auction and your position — worth establishing before treating it as a recoverable cost.
FAQs
Auction tax FAQs
Who collects tax on an auction sale?
The person conducting the auction — a government department, a local authority, a court, a bank selling security, or a licensed auctioneer. They collect from the successful bidder at the time of the sale and deposit it. It is not something the buyer settles later at their own convenience.
Is the tax on top of my bid, or inside it?
On top, in the usual case: the bid is the sale price and the tax is collected in addition to it. That surprises first-time bidders, because the cheque they write is larger than the number they raised their hand for. Read the auction conditions — where the notice says the price is inclusive of taxes, the arithmetic runs the other way.
Does this apply to property auctioned by a bank?
A sale by public auction is caught whoever runs it, including a bank enforcing security or a court executing a decree. Immovable property carries a reduced rate compared with other auctioned goods and leases, so use the correct limb rather than the headline figure — the field above is editable for exactly that reason.
What about a lease or a right auctioned rather than goods?
Auctions of the right to collect tolls, fees, and similar rights are within the same charge. The base is the gross bid for the right, not your expected profit from exercising it.
Is this a final tax?
It is advance tax adjustable against your liability for the year — you claim it in your return like any other collection. Ask for the collection certificate at the sale; recovering the credit later without documentation is far harder than getting the paper on the day.
Why is the non-filer rate double?
Persons not on the Active Taxpayers List are subject to enhanced collection under the Tenth Schedule mechanism. Getting on the ATL before bidding is usually the cheapest step available to a regular buyer at auction.
Related tools
Bidding on property?
An auctioned property still attracts the usual purchase-side advance tax and registration costs.
Open Property Purchase Tax Calculator