As tax year 2024 unfolds, citizens of Pakistan who derive their income from salaries are urged to stay updated with the latest tax rates to ensure compliance with tax regulations and accurate filing of income tax returns.
The declaration of annual income tax return for tax year 2024 is due on September 30, 2024, and will be based on the tax rates specified for this year.
According to Section 149 of the Income Tax Ordinance, 2001, every individual responsible for disbursing salary to employees is mandated to deduct tax from the amount paid. The tax rates for tax year 2024 are delineated as follows:
1. Taxable income up to Rs 600,000: The tax rate stands at zero percent, providing relief to individuals whose income falls within this bracket.
2. Taxable income exceeding Rs 600,000 but not exceeding Rs 1,200,000: A tax rate of 2.5% is applicable on the amount exceeding Rs 600,000, ensuring a progressive taxation system.
3. Taxable income exceeding Rs 1,200,000 but not exceeding Rs 2,400,000: Individuals falling within this income range will be subject to a tax rate of Rs 15,000 plus 12.5% of the amount exceeding Rs 1,200,000.
4. Taxable income exceeding Rs 2,400,000 but not exceeding Rs 3,600,000: The tax rate applicable in this bracket is Rs 165,000 plus 22.5% of the amount exceeding Rs 2,400,000.
5. Taxable income exceeding Rs 3,600,000 but not exceeding Rs 6,000,000: Individuals with taxable incomes within this range will be subjected to a tax rate of Rs 435,000 plus 27.5% of the amount exceeding Rs 3,600,000.
6. Taxable income exceeding Rs 6,000,000: For individuals whose taxable income surpasses Rs 6,000,000, a tax rate of Rs 1,095,000 plus 35% of the amount exceeding Rs 6,000,000 will be applied.
These tax rates are pivotal for individuals and employers alike, as adherence to these regulations ensures the fulfillment of tax obligations and prevents any potential penalties or legal repercussions. Employers must diligently deduct the appropriate tax amount from employees’ salaries and remit it to the tax authorities within the stipulated time frame.
Moreover, taxpayers are encouraged to seek professional advice or utilize online tax calculators to accurately assess their tax liabilities and ensure compliance with the prevailing tax laws. By staying informed and proactive, individuals can contribute to the efficient functioning of the tax system and the overall economic well-being of Pakistan.
