Income Tax Slabs 2024-2025

The government of Pakistan has finalized tax slabs for salaried individuals for the fiscal year 2024-2025.

Although, the federal government has set an increased tax rate of 5% for those earning between Rs. 600,000 and Rs. 1,200,000 per annum.

They have also maintained the tax slabs to six, as the tax burden continues to increase on the inflation-burdened salaried class.

Following are the changes in tax laws recently enacted through the Finance Act 2024 that will impact salaried individuals:

Taxable Income	Rate of Tax
Where taxable income does not exceed Rs. 600,000	0%
Where taxable income exceeds Rs. 600,000 but does not exceed Rs. 1,200,000	5% of the amount exceeding Rs. 600,000
Where taxable income exceeds Rs. 1,200,000 but does not exceed Rs. 2,200,000	Rs. 30,000 + 15% of the amount exceeding Rs. 1,200,000
Where taxable income exceeds Rs. 2,200,000 but does not exceed Rs. 3,200,000	Rs. 180,000 + 25% of the amount exceeding Rs. 2,200,000
Where taxable income exceeds Rs. 3,200,000 but does not exceed Rs. 4,100,000	Rs. 430,000 + 30% of the amount exceeding Rs. 3,200,000
Where taxable income exceeds Rs. 4,100,000	Rs. 700,000 + 35% of the amount exceeding Rs. 4,100,000

A comparison of tax impact on the salaries under previous tax slab 2023-2024 is presented as follows:

Taxable Income	Rate of Tax
Where taxable income does not exceed Rs. 600,000	0%
Where taxable income exceeds Rs. 600,000 but does not exceed Rs. 1,200,000	2.5% of the amount exceeding Rs. 600,000
Where taxable income exceeds Rs. 1,200,000 but does not exceed Rs. 2,400,000	Rs. 15,000 + 12.5% of the amount exceeding Rs. 1,200,000
Where taxable income exceeds Rs. 2,200,000 but does not exceed Rs. 3,600,000	Rs. 165,000 + 22.5% of the amount exceeding Rs. 2,400,000
Where taxable income exceeds Rs. 3,200,000 but does not exceed Rs. 6,000,000	Rs. 435,000 + 27.5% of the amount exceeding Rs. 3,600,000
Where taxable income exceeds Rs. 6,000,000	Rs. 1,095,000 + 35% of the amount exceeding Rs. 6,000,000

The Finance Bill 2024’s tax slabs show that those making at least Rs. 6 million (Rs. 500,000 per month) will be most affected. For these earners, the tax obligation rises by Rs. 22,500.

It’s interesting to note that salaried individuals making up to Rs. 12 million annually (Rs. 1 million per month) will also see a tax rise of Rs. 22,000.

The income tax exemption threshold, which remains at Rs. 50,000, was not touched by the government; however, responsibility has increased for all other salary levels. For instance, a person making Rs. 100,000 per month will now pay Rs. 2,500, instead of Rs. 1,250 as previously.

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