Islamabad, June 26, 2023 – The National Assembly of Pakistan has approved new tax rates for business individuals and Association of Persons (AOPs) as part of the budget for the fiscal year 2023-24.
These rates as approved Finance Bill 2023 will come into effect from July 01, 2023, and will be applicable for the tax year 2024.
READ MORE: New Tax Rates For Salary Income Applicable from July 01, 2023
The updated tax rates for business individuals and AOPs are as follows:
01. Taxable income up to Rs600,000: The tax rate shall be zero percent.
02. Taxable income exceeding Rs600,000 but not exceeding Rs800,000: A tax rate of 7.5 percent of the amount exceeding Rs600,000 shall apply.
03. Taxable income exceeding Rs800,000 but not exceeding Rs1,200,000: A fixed tax of Rs15,000, along with 15 percent of the amount exceeding Rs800,000, shall apply.
04. Taxable income exceeding Rs1,200,000 but not exceeding Rs2,400,000: A fixed amount of Rs75,000, along with 20 percent of the amount exceeding Rs1,200,000, shall apply.
05. Taxable income exceeding Rs2,400,000 but not exceeding Rs3,000,000: A fixed tax amount of Rs315,000, along with 25 percent of the amount exceeding Rs2,400,000, shall apply.
06. Taxable income exceeding Rs3,000,000 but not exceeding Rs4,000,000: A fixed tax of Rs465,000, along with 30 percent of the amount exceeding Rs3,000,000, shall apply.
07. Taxable income exceeding Rs4,000,000: A fixed tax of Rs765,000, along with 35 percent of the amount exceeding Rs4,000,000, shall apply.
READ MORE: National Assembly Approves Budget 2023-24 with New Recommendations of Heavy Taxes
To provide clarity, the following tax card for business individuals and AOPs is applicable for the tax year 2023:
01. Where taxable income does not exceed Rs.600,000/-: 0 percent
02. Where taxable income exceeds Rs. 600,000 but does not exceed Rs. 800,000: 5 percent of the amount exceeding Rs. 600,000
03. Where taxable income exceeds Rs. 800,000 but does not exceed Rs. 1,200,000: Rs. 10,000 + 12.5 percent of the amount exceeding Rs.800,000
04. Where taxable income exceeds Rs.1,200,000 but does not exceed Rs. 2,400,000: Rs.60,000 + 17.5 percent of the amount exceeding Rs.1,200,000
05. Where taxable income exceeds Rs.2,400,000 but does not exceed Rs. 3,000,000: Rs. 270,000 + 22.5 percent of the amount exceeding Rs.2,400,000
06. Where taxable income exceeds Rs.3,000,000 but does not exceed Rs. 4,000,000: Rs.405,000 + 27.5 percent of the amount exceeding Rs.3,000,000
07. Where taxable income exceeds Rs.4,000,000 but does not exceed Rs. 6,000,000: Rs. 680,000 + 32.5 percent of the amount exceeding Rs.4,000,000
8. Where taxable income exceeds Rs.6,000,000: Rs. 1,330,000 + 35 percent of the amount exceeding Rs.6,000,000.
READ MORE: Pakistan Announces Pension Reforms; Abolishes Multiple Pensions
These revised tax rates aim to create a more equitable tax structure for business individuals and AOPs while generating additional revenue for the government.
