ISLAMABAD – The federal government is considering significant changes to the income tax slabs, including raising the annual tax-free income threshold and reducing tax rates across all income slabs.
Reports claimed that an amendment to Section 129 of the Income Tax Act is under discussion, which could increase the annual tax-free income limit from Rs600,000 to a higher amount.
If approved, individuals earning up to 83,000 rupees per month would be exempt from income tax.
Tthe tax on a monthly salary of Rs100,000 may decrease from 5% to 2.5%, while the income tax on Rs183,000 could be reduced from 15% to 12.5%.
For a monthly salary of Rs267,000, the income tax may be 22.5% instead of 25%. Similarly, the tax on salaries up to Rs333,000 could be 27.5% instead of 30%, while salaries above Rs333,000 may be taxed at 32.5%.
The federal budget, set to be unveiled today, is also expected to include increases in salaries and pensions, providing relief to employees and retirees amid rising inflation.
