Karachi, July 27, 2024 – As the deadline for filing income tax returns for the tax year 2024 approaches, salaried individuals are grappling with understanding which salary slabs to apply.
The applicable salary income slabs until July 30, 2024, will be used for the return filings for the tax year 2024. The Federal Board of Revenue (FBR) has introduced new salary slabs for the tax year 2025 through the Finance Act, 2024, effective from July 1, 2024. However, for this year’s filings, taxpayers need to refer to the slabs applicable until June 30, 2024.
The return filing season for the tax year 2024 has begun, and the deadline for salaried individuals is September 30, 2024. To assist salaried taxpayers, the FBR has clarified the salary slabs that apply for the income tax returns for the tax year 2024. Below are the relevant salary slabs:
Where the income of an individual chargeable under the head “salary” exceeds seventy-five percent of his taxable income, the following rates of tax shall apply:
1. Where taxable income does not exceed Rs. 600,000:
Rate of Tax: 0%
2. Where taxable income exceeds Rs. 600,000 but does not exceed Rs. 1,200,000:
Rate of Tax: 2.5% of the amount exceeding Rs. 600,000
3. Where taxable income exceeds Rs. 1,200,000 but does not exceed Rs. 2,400,000:
Rate of Tax: Rs. 15,000 + 12.5% of the amount exceeding Rs. 1,200,000
4. Where taxable income exceeds Rs. 2,400,000 but does not exceed Rs. 3,600,000:
Rate of Tax: Rs. 165,000 + 22.5% of the amount exceeding Rs. 2,400,000
5. Where taxable income exceeds Rs. 3,600,000 but does not exceed Rs. 6,000,000:
Rate of Tax: Rs. 435,000 + 27.5% of the amount exceeding Rs. 3,600,000
6. Where taxable income exceeds Rs. 6,000,000:
Rate of Tax: Rs. 1,095,000 + 35% of the amount exceeding Rs. 6,000,000
These slabs are designed to ensure a fair taxation process, taking into account the varying income levels of salaried individuals. The FBR’s decision to digitize the tax filing process aims to facilitate taxpayers by making the filing process more efficient and accessible. This digitization has led to an increase in online return filings, reflecting a positive shift towards a more streamlined tax administration system.
The introduction of new slabs for the tax year 2025, which will be effective from July 1, 2024, has caused some confusion among taxpayers. However, it is essential to note that these new slabs will not affect the current year’s tax return filings. For the tax year 2024, the aforementioned slabs remain applicable.
Tax experts advise salaried individuals to carefully review their taxable income and ensure they apply the correct slabs while filing their returns. This vigilance will help avoid any discrepancies and potential penalties for incorrect filings. The FBR has also provided various online resources and helplines to assist taxpayers with their queries and ensure a smooth filing process.
As the deadline for return filing approaches, it is crucial for salaried individuals to gather all necessary documentation, calculate their taxable income accurately, and file their returns in a timely manner. This proactive approach will help ensure compliance with tax regulations and avoid any last-minute rush or errors.
The salary income slabs for the tax year 2024 have been clearly defined by the FBR, and salaried individuals are advised to follow these guidelines to ensure accurate and timely return filings. The shift towards digitization and the introduction of new slabs for the upcoming tax year reflect the FBR’s commitment to improving the tax administration system and facilitating taxpayers.