Islamabad, June 12, 2024 – The Finance Bill, 2024 has unveiled new salary income tax slabs for the fiscal year 2024-25, signaling significant changes in the taxation structure for salaried individuals.
The federal government, in its budget announcement on Wednesday, introduced revised salary tax slabs aimed at a more progressive taxation system.
Maintaining the previous exemption threshold, the income tax will not apply to individuals earning salary up to Rs 600,000 annually. This measure is designed to alleviate the tax burden on low-salary earners and provide relief to a significant portion of the salaried population.
Below are the newly introduced salary slabs for the income tax levy:
1. Where taxable income does not exceed Rs. 600,000/-: The tax rate is zero percent
2. Where taxable income exceeds Rs. 600,000 but does not exceed Rs. 1,200,000: The tax shall be 5% of the amount exceeding Rs 600,000
3. Where taxable income exceeds Rs. 1,200,000 but does not exceed Rs. 2,200,000: The tax shall be Rs. 30,000 + 15% of the amount exceeding Rs. 1,200,000
4. Where taxable income exceeds Rs. 2,200,000 but does not exceed Rs. 3,200,000: The tax shall be Rs. 180,000 + 25% of the amount exceeding Rs. 2,200,000
5. Where taxable income exceeds Rs. 3,200,000 but does not exceed Rs. 4,100,000: The tax shall be Rs. 430,000 + 30% of the amount exceeding Rs. 3,200,000
6. Where taxable income exceeds Rs. 4,100,000: The tax shall be Rs. 700,000 + 35% of the amount exceeding Rs. 4,100,000”;
While unveiling the budget 2024-25, the Finance Minister emphasized that these changes aim to create a more equitable tax system where higher earners contribute a fairer share of their income. By increasing the tax rates progressively with higher income brackets, the government seeks to balance fiscal responsibility with social equity.
This new structure is expected to bolster the government’s revenue, which will be used to fund various public services and development projects. The revised slabs also aim to encourage compliance and reduce tax evasion by simplifying the tax regime for individuals.
As these new slabs come into effect, taxpayers are advised to review their financial plans and consult with tax professionals to ensure compliance and optimal tax management under the new fiscal regulations.
