The Federal Board of Revenue (FBR) has issued updated rates of withholding tax on salary income for the year 2021-2022.
The withholding tax shall be collected by persons responsible for paying salary to employees shall deduct tax from the amount paid to the employees.
The FBR collect withholding tax on salary under Section 149 of the Income Tax Ordinance, 2001.
WITHHOLDING TAX CARD 2021/2022
1. Where taxable income does not exceed Rs. 600,000: the withholding tax rate shall be 0 per cent
2. Where taxable income exceeds Rs. 600,000 but does not exceed Rs. 1,200,000: the withholding tax rate shall be 5 per cent of the amount exceeding Rs. 600,000
3. Where taxable income exceeds Rs. 1,200,000 but does not exceed Rs. 1,800,000: the withholding tax rate shall be Rs. 30,000 plus 10 per cent of the amount exceeding Rs. 1,200,000.
4. Where taxable income exceeds Rs. 1,800,000 but does not exceed Rs. 2,500,000: the withholding tax rate shall be Rs. 90,000 plus 15 per cent of the amount exceeding Rs. 1,800,000.
5. Where taxable income exceeds Rs. 2,500,000 but does not exceed Rs. 3,500,000: the withholding tax rate shall be Rs. 195,000 plus 17.5 per cent of the amount exceeding Rs. 2,500,000.
6. Where taxable income exceeds Rs. 3,500,000 but does not exceed Rs. 5,000,000: the withholding tax rate shall be Rs. 370,000 plus 20 per cent of the amount exceeding Rs. 3,500,000.
7. Where taxable income exceeds Rs. 5,000,000 but does not exceed Rs. 8,000,000: the withholding tax rate shall be Rs. 670,000 plus 22.5 per cent of the amount exceeding Rs. 5,000,000.
8. Where taxable income exceeds Rs. 8,000,000 but does not exceed Rs. 12,000,000: the withholding tax rate shall be Rs.1,345,000 plus 25 per cent of the amount exceeding Rs. 8,000,000.
9. Where taxable income exceeds Rs. 12,000,000 but does not exceed Rs.30,000,000: the withholding tax rate shall be Rs. 2,345,000 plus 27.5 per cent of the amount exceeding Rs. 12,000,000.
10. Where taxable income exceeds Rs. 30,000,000 but does not exceed Rs.50,000,000: the withholding tax rate shall be Rs. 7,295,000 plus 30 per cent of the amount exceeding Rs. 30,000,000.
11. Where taxable income exceeds Rs. 50,000,000 but does not exceed Rs.75,000,000: the withholding tax rate shall be Rs. 13,295,000 plus 32.5 per cent of the amount exceeding Rs. 50,000,000.
12. Where taxable income exceeds Rs.75,000,000: the withholding tax rate shall be Rs. 21,420,000 plus 35 per cent of the amount exceeding Rs 75,000,000″.
Under Section 149(3) of Income Tax Ordinance, 2001, every person responsible for making payment for directorship fee or fee for attending Board meeting or such fee by whatever name called: the withholding tax rate shall be 20 per cent of gross amount paid.
