TAX YEAR 2021: tax rates for salary income

TAX YEAR 2021: tax rates for salary income

ISLAMABAD: The rates of income tax have been updated for salaried persons which will remain applicable during tax year 2021, if not amended or changed.

Federal Board of Revenue (FBR) has issued Income Tax Ordinance, 2001 updated till June 30, 2020 incorporating amendments made through Finance Act, 2020. The updated ordinance contains the rate of income tax to be applicable on salaried persons during the period July 01, 2020 to June 30, 2021.

The following rates shall be applicable on the income of an individual under the head of salary exceeds 75 percent of his taxable income.

S. No.Taxable IncomeRate of tax
(1)(2)(3)
01Where taxable income does not exceed Rs. 600,0000%
02Where taxable income exceeds Rs. 600,000 but does not exceed Rs. 1,200,0005% of the amount exceeding Rs. 600,000
03Where taxable income exceeds Rs. 1,200,000 but does not exceed Rs. 1,800,000Rs. 30,000plus 10% of the amount exceeding Rs. 1,200,000
04Where taxable income exceeds Rs. 1,800,000 but does not exceed Rs. 2,500,000Rs. 90,000 plus 15% of the amount exceeding Rs. 1,800,000
05Where taxable income exceeds Rs.2,500,000 but does not exceed Rs. 3,500,000Rs. 195,000 plus 17.5% of the amount exceeding Rs. 2,500,000
06Where taxable income exceeds Rs. 3,500,000 but does not exceed Rs. 5,000,000Rs. 370,000 plus 20% of the amount exceeding Rs. 3,500,000
07Where taxable income exceeds Rs. 5,000,000but does not exceeds Rs. 8,000,000Rs. 670,000 plus 22.5% of the amount exceeding Rs. 5,000,000
08Where taxable income exceeds Rs. 8,000,000 but does not exceeds Rs. 12,000,000Rs. 1,345,000 plus 25% of the amount exceeding Rs. 8,000,000
09Where taxable income exceeds Rs. 12,000,000 but does not exceeds Rs. 30,000,000Rs. 2,345,000 plus 27.5% of the amount exceeding Rs. 12,000,000
10Where taxable income exceeds Rs. 30,000,000 but does not exceeds Rs. 50,000,000Rs. 7,295,000 plus 30% of the amount exceeding Rs. 30,000,000
11Where taxable income exceeds Rs. 50,000,000 but does not exceeds Rs. 75,000,000Rs. 13,295,000 plus 32.5% of the amount exceeding Rs. 50,000,000
12Where taxable income exceeds Rs. 75,000,000Rs. 21,420,000 plus 35% of the amount exceeding Rs. 75,000,000]

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