ISLAMABAD: In response to demands from the IMF to increase revenue, the NA Approves revised Salary Income tax slabs for the salaried class. The new budget bill states that there would be no tax on income up to Rs 0.6 million per year, but that income between Rs 0.6 and 1.2 million will be subject to a 2.5 percent tax on the portion beyond Rs 0.6 million. Earners who make between Rs 1.2 million and Rs 2.4 million per year must pay a set tax of Rs 15,000 plus an additional 12.5% of their earnings beyond Rs 1.2 million. In cases where taxable income is greater than Rs 2.4 million but not greater than Rs 3.6 million, the tax rate is Rs 165,000 + 20% of the amount over Rs 2.4 million.
Those who earn between Rs. 3.6 million and Rs. 6 million must pay Rs. 405,000 + 25% of the amount beyond Rs. 3.6 million.
The tax on income between Rs. 6 and Rs. 12 million is Rs. 10.05 million + 32.5 percent of the amount over Rs. 6 million.
The tax rate would be lower for those who make up to Rs 200 000 per month than it was in the previous fiscal year. Individuals who make more than that, however, will be subject to higher rates compared to the prior fiscal year. The largest tax rate increases would be seen by salaried individuals making more than Rs500,000 per month.
NA Approves revised Salary Income tax
The salaried class, which formerly had a tax exemption for salary income up to Rs 100,000 per month, is disappointed by the amended slabs.