Islamabad, July 26, 2023 – The Federal Board of Revenue (FBR) has recently updated the tax rates for salaried individuals for the tax year 2023-24.
The latest tax rates have been introduced through the updated Income Tax Ordinance, 2001, which now includes amendments up to June 30, 2023. These changes will have an impact on the tax liabilities of salaried persons in Pakistan.
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The updated tax rates are as follows:
1. Where the taxable income does not exceed Rs. 600,000, there will be no tax imposed.
2. For taxable incomes that exceed Rs. 600,000 but do not surpass Rs. 1,200,000, a tax rate of 2.5% will apply on the amount exceeding Rs. 600,000.
3. For taxable incomes that exceed Rs. 1,200,000 but do not surpass Rs. 2,400,000, a fixed tax amount of Rs. 15,000 plus 12.5% of the amount exceeding Rs. 1,200,000 will be levied.
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4. For taxable incomes that exceed Rs. 2,400,000 but do not surpass Rs. 3,600,000, a fixed tax amount of Rs. 165,000 plus 22.5% of the amount exceeding Rs. 2,400,000 will be levied.
5. For taxable incomes that exceed Rs. 3,600,000 but do not surpass Rs. 6,000,000, a fixed tax amount of Rs. 435,000 plus 27.5% of the amount exceeding Rs. 3,600,000 will be levied.
6. For taxable incomes that exceed Rs. 6,000,000, a fixed tax amount of Rs. 1,095,000 plus 35% of the amount exceeding Rs. 6,000,000 will be levied.
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These updated tax rates aim to balance the tax burden for salaried individuals in different income brackets. By implementing a progressive tax system, the government aims to ensure that individuals with higher incomes contribute a higher proportion of their earnings as taxes.
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Salaried individuals are advised to take note of the revised tax rates and ensure compliance with the updated tax regulations to avoid any penalties or legal consequences. The FBR’s efforts to improve tax collection and transparency will also help in generating revenue for the country’s development and welfare programs.
