ISLAMABAD – The federal government has proposed a decrease in the tax rate for the salaried class in the budget for fiscal year 2025.
Finance Minister Muhammad Aurangzeb presented the federal budget 2025-26 with total outlay of Rs17.5 trillion.
Addressing the budget session, the finance minster said that Prime Minister Shehbaz had called for providing relief to the salaried persons in the budget.
In line with PM’s directives, the government has proposed across-the-board cuts in income tax rates for the salaried class.
Calculate Your Tax on Salary
The government has proposed increasing the annual tax-free salary to Rs600,000. The tax rate for those with Rs1.2 million income a year would drop to 1% from 5%, meaning the individuals earning Rs1.2 million would pay Rs6,000 in tax instead of previous Rs30,000.
Similarly, the salaried persons earning up to Rs2.2 million year will be taxed at 11% instead of previous 15%.
For those earning between Rs2.2 million and Rs3.2 million, the tax rate has been proposed decreasing to 23% from 25%.
