Islamabad, June 26, 2023 – The National Assembly of Pakistan has passed the budget for the fiscal year 2023-24, introducing new tax rates for salary income.
These rates will be applicable for the upcoming tax year 2024, starting from July 01, 2023.
READ MORE: National Assembly Approves Budget 2023-24 with New Recommendations of Heavy Taxes
Under the recently approved amendment to Finance Bill 2023, individuals whose income falls under the category of ‘salary’ and exceeds seventy-five percent of their taxable income will be subject to the following tax rates:
01. Taxable income up to Rs600,000: The tax rate shall be zero percent.
02. Taxable income exceeding Rs600,000 but not exceeding Rs1,200,000: The tax rate shall be 2.5 percent of the amount exceeding Rs600,000.
03. Taxable income exceeding Rs1,200,000 but not exceeding Rs2,400,000: A fixed amount of Rs15,000, along with 12.5 percent of the amount exceeding Rs1,200,000, shall be applicable as tax.
04. Taxable income exceeding Rs2,400,000 but not exceeding Rs3,600,000: A fixed amount of Rs165,000, along with 22.5 percent of the amount exceeding Rs2,400,000, shall be applicable as tax.
05. Taxable income exceeding Rs3,600,000 but not exceeding Rs6,000,000: A fixed tax amount of Rs435,000, along with 27.5 percent of the amount exceeding Rs3,600,000, shall be applicable.
06. Taxable income exceeding Rs6,000,000: A fixed tax amount of Rs1,095,000, along with 35 percent of the amount exceeding Rs6,000,000, shall be applicable.
READ MORE: Pakistan Announces Pension Reforms; Abolishes Multiple Pensions
To provide clarity, the following tax card for salaried individuals is applicable for the tax year 2023:
Taxable Income | Rate of Tax
01. Up to Rs600,000 | 0%
02. Rs600,001 – 1,200,000 | 2.5% of the amount exceeding Rs600,000
03. Rs1,200,001 – 2,400,000| Rs15,000 + 12.5% of the amount exceeding Rs1,200,000
04. Rs2,400,001 – 3,600,000| Rs165,000 + 22.5% of the amount exceeding Rs2,400,000
05. Rs3,600,001 – 6,000,000| Rs435,000 + 27.5% of the amount exceeding Rs3,600,000
06. Rs6,000,001 – 12,000,000| Rs1,095,000 + 35% of the amount exceeding Rs6,000,000
07. Amount exceeding Rs12,000,000 | Rs2,955,000 + 35% of the amount exceeding Rs12,000,000
READ MORE: FBR Given 31% Higher Tax Collection Target for FY24
Taxpayers are advised to consult with tax professionals or visit the official website of the Federal Board of Revenue (FBR) for further information and to understand the implications of these new tax rates on their salary income.
