The budget for the fiscal year 2024-25 has introduced significant adjustments to income tax rates, affecting various brackets of the salaried class. Under the new budget, individuals earning a monthly income of Rs 50,000 or less have been exempted from income tax, providing relief to lower-income earners. For those earning between Rs 600,000 and Rs 1.2 million annually, the income tax rate has been reduced to 5%. Similarly, the tax on monthly incomes up to Rs 100,000 has also been set at 5%, with the monthly tax increased from Rs 1,250 to Rs 2,500. Individuals earning between Rs 1.2 million and Rs 2.2 million annually will now face a 15% income tax rate. This translates to a tax rate of 15% for those earning Rs 183,344 per month, up from Rs 11,667 to Rs 15,000 per month.

Those with annual incomes ranging from Rs 2.2 million to Rs 3.2 million will be taxed at a rate of 25%. For example, individuals earning Rs 267,667 per month  will now pay 25% tax, increased from Rs 28,770 to Rs 35,834 per month.  The highest tax bracket, applying a 30% rate, affects individuals earning between Rs 3.2 million and Rs 4.1 million annually. This translates to a monthly tax of Rs 53,333 for those earning up to Rs 341,667 per month, increased from Rs 47,408. Furthermore, a 35% tax rate will be applied to annual salaries exceeding Rs 4.1 million. These changes reflect the government's efforts to streamline income tax structures while ensuring equitable contributions from different income groups towards national development.

Credit: Independent News Pakistan