KARACHI: In a bid to provide tax relief for the salaried class, Pakistan’s Federal Board of Revenue (FBR) has introduced a new tax card for the fiscal year 2024-25.
The new tax card exempts individuals with annual earnings up to Rs 600,000 from income tax. For those with earnings exceeding this amount, a structured tax rate has been implemented.
Specifically, incomes between Rs 600,000 and Rs 1.2 million will incur a 5 percent tax. For a salary of Rs 1 million, a fixed tax of Rs 20,000 will apply to the amount exceeding Rs 600,000.
Individuals earning between Rs 1.2 million and Rs 2.2 million will face a fixed tax of Rs 30,000 plus 15 percent on income above Rs 1.2 million.
Those with earnings between Rs 2.2 million and Rs 3.2 million will be taxed Rs 180,000 plus 25 percent on income exceeding Rs 2.2 million. For salaries ranging from Rs 3.2 million to Rs 4.1 million, a fixed tax of Rs 430,000 plus 30 percent on the additional income will apply.
Finally, for incomes surpassing Rs 4.1 million, a fixed tax of Rs 700,000 will be levied, with an additional 35 percent tax on income above Rs 4.1 million.
The FBR has directed employers to deduct the applicable taxes from salaries to ensure efficient tax collection.
This move is intended to alleviate the tax burden on lower-income earners while maintaining a progressive tax system for those with higher earnings.
