Islamabad: The Federal Board of Revenue (FBR) has rolled out a revised income tax structure for the fiscal year 2024-25, introducing significant changes aimed at alleviating the tax burden on lower-income salaried individuals. The new policy exempts those earning up to PKR 600,000 annually from income tax, while adjusting rates upward for higher income brackets.

According to Zameen.Com, the updated tax card details how individuals earning between PKR 600,000 and PKR 1.2 million will now face a 5% tax rate. For instance, an income of PKR 1 million will incur a tax of PKR 20,000 on the portion exceeding the exempted amount. Higher income ranges have been structured to progressively increase the tax burden: incomes from PKR 1.2 million to PKR 2.2 million will attract a fixed tax of PKR 30,000 plus an additional 15% on amounts over PKR 1.2 million.

For those earning between PKR 2.2 million and PKR 3.2 million, the tax rate is set at a fixed PKR 180,000, with a 25% charge on any excess. The tax brackets continue to escalate, with individuals earning between PKR 3.2 million and PKR 4.1 million paying a fixed tax of PKR 430,000, plus 30% on the surplus. The highest earners, with incomes over PKR 4.1 million, are subject to a fixed tax of PKR 700,000, with an additional 35% on income above this threshold.

The FBR has instructed employers to implement these deductions directly from employees’ salaries to streamline the tax collection process. This initiative is part of a broader effort by the government to provide financial relief to the salaried class, especially those at the lower end of the income spectrum, while ensuring a fair and equitable tax system for higher earners.