Budget 2019-20: All you need to know about new Income Tax slabs for next fiscal year

  • The minimum taxable income reviewed and set at Rs0.6 million and Rs0.4 million per annum for the salaried and non-salaried persons
Pakistan

ISLAMABAD – The federal government on Tuesday unveiled its first budget for the next fiscal year, with several tax adjustments in income tax slabs for individuals and association of persons.

Tax Slabs for Salaried Income

  Tax Slabs for Salaried Income  
S. No Taxable Income Rate of Tax
1 Where the taxable income does not exceed Rs. 600,000 0%
2 Where the taxable income exceeds Rs. 600,000 but does not exceed Rs. 1,200,000 5% of the amount exceeding Rs. 600,000
3 Where taxable income exceeds Rs. 1,200,000 but does not exceed Rs. 1,800,000 Rs. 30,000 plus 10% 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 Rs. 90,000 plus 15% 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 Rs. 195,000 plus 17.5% of the amount exceeding Rs. 2,500,000
6 Where the taxable income exceeds Rs. 3,500,000 but does not exceed Rs. 5,000,000 Rs. 370,000 plus 20% of the amount exceeding Rs. 3,500,000
7 Where the taxable income exceeds Rs. 5,000,000 but does not exceed Rs. 8,000,000 Rs. 670,000 plus 22.5% of the amount exceeding Rs. 5,000,000
8 Where the taxable income exceeds Rs. 8,000,000 but does not exceed Rs. 12,000,000 Rs. 1,345,000 plus 25% 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 Rs. 2,345,000 plus 27.5% of the amount exceeding Rs. 12,000,000
10 Where the taxable income exceeds Rs. 30,000,000 but does not exceed Rs.50,000,000 Rs. 7,295,000 plus 30% 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 Rs.13,295,000 plus 32.5% of the amount exceeding Rs. 50,000,000
12 Where taxable income exceeds Rs.75,000,000 Rs. 21,420,000 plus 35% of the amount exceeding Rs. 75,000,000

Tax Slabs for Unsalaried Income

S. No Taxable Income Rate of Tax
1 Where the taxable income does not exceed Rs. 400,000 0%
2 Where the taxable income exceeds Rs. 400,000 but does not exceed Rs. 600,000 5% of the amount exceeding Rs. 400,000
3 Where the taxable income exceeds Rs. 600,000 but does not exceed Rs. 1,200,000 Rs. 10,000 plus 10% of the amount exceeding Rs. 600,000
4 Where the taxable income exceeds Rs. 1,200,000 but does not Rs. 2,400,000 Rs. 70,000 plus 15% of the amount exceeding Rs. 1,200,000
5 Where taxable income exceeds Rs. 2,400,000 but does not exceed Rs. 3,000,000 Rs. 250,000 plus 20% of the amount exceeding Rs. 2,400,000
6 Where taxable income exceeds Rs. 3,000,000 but does not exceed Rs. 4,000,000 Rs. 370,000 plus 25% of the amount exceeding Rs. 3,000,000
7 Where the taxable income exceeds Rs. 4,000,000 but does not exceed Rs. 6,000,000 Rs. 620,000 plus 30% of the amount exceeding Rs. 4,000,000
8 Where the taxable income exceeds Rs. 6,000,000 Rs. 1,220,000 plus 35% of the amount exceeding Rs. 6,000,000

 

Tax Calculator for Salaried Income – Budget 2019-2020

In the Finance Act, 2018, increase in Tax Rates for Salaried and Non-Salaried Persons Tax rates for both salaried and non-salaried persons were drastically reduced. Previously, the threshold of taxable income was Rs.400, 000. Through the Finance Act, 2018, the threshold was substantially increased three-fold to Rs.1, 200,000 which has resulted in huge shortfall of approximately Rs 80 billion in revenue collection.

The threshold of taxable income is generally a proportion of the per capita income of a country and such significant increase is unprecedented. It is, therefore, proposed that the threshold of taxable income may be revised and fixed at Rs 600,000 (Rs 0.6 million) for salaried persons and Rs 400,000 (Rs 0.4 million) for non-salaried persons.

In the case of salaried individuals deriving income exceeding Rs0.6 million per annum, it is proposed to introduce eleven taxable slabs with progressive tax rates ranging from 5% to 35%.

For non-salaried persons deriving income exceeding Rs0.4 million, it is proposed to introduce eight taxable slabs of income with tax rates ranging from 5% to 35%.

Corporate Tax

In the 2019-20 budget, the federal government has fixed the Corporate Tax at 29 per cent for two years, bringing it down from 35 per cent to 29 per cent over the period from fiscal year 2014 through 2018.