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Monday July 15, 2024

Maximum tax rate for non-salaried class hiked to 45pc

The government has jacked up the taxation rate for salaried earners of over Rs185,000 per month

By Our Correspondent
June 13, 2024
A man counts Pakistani rupee notes at a currency exchange shop in Peshawar, Pakistan September 12, 2023. — Reuters
A man counts Pakistani rupee notes at a currency exchange shop in Peshawar, Pakistan September 12, 2023. — Reuters

ISLAMABAD: The government has hiked rates of higher income earners slabs of both salaried and non-salaried classes to fetch additional revenues of Rs250 billion in the budget 2024-25. Finance Bill 2024-25 tabled in parliament showed that for the salaried class, where the taxable income does not exceed Rs600,000, there will be zero tax. Where the taxable income exceeds Rs600,000 but does not exceed Rs1,200,000, there will be tax rate of 5 percent exceeding amount of Rs600,000 per annum.

The government has jacked up the taxation rate for salaried earners of over Rs185,000 per month. The Finance Bill 2024-25 says that where the taxable income exceeds Rs1,200,000 but does not exceed Rs2,20,000, the FBR slapped tax of Rs30,000 plus 15 percent of the amount exceeding Rs1,200,000.

Where taxable income exceeds Rs2,20,000 but does not exceed Rs3,200,000, the FBR slapped Rs180,000 plus 25 percent of the amount exceeding Rs2,200,000 per annum. Where taxable income exceeds Rs3,200,000 but does not exceed Rs4,100,000, the FBR slapped Rs430,000 plus 30 percent tax of the amount exceeding Rs3,200,000.

Where taxable income exceeds Rs4,100,000, the FBR slapped Rs700,000 plus 35 percent of the amount exceeding Rs4,100,000 per annum. For non-salaried (business class), the government revised rates of higher income earners and jacked up maximum rate up to 45 percent in the budget. Where taxable income does not exceed Rs600,000 there will be zero tax. Where taxable income exceeds Rs600,000 but does not exceed Rs1,200,000, the FBR slapped 15 percent of the amount exceeding Rs600,000. Where taxable income exceeds Rs1,200,000 but does not exceed Rs1,600,000 the FBR imposed Rs90,000 plus 20 percent of the amount exceeding Rs1,200,000. Where taxable income exceeds Rs1,600,000 but does not exceed Rs3,200,000, the FBR imposed Rs1,70,000 plus 30 percent of the amount exceeding Rs1,600,000. Where the taxable income exceeds Rs3,200,000 but does not exceed Rs5,600,000, the FBR imposed Rs650,000 plus 40 percent of the amount exceeding Rs3,200,000. Where the taxable income exceeds Rs5,600,000 the FBR slapped Rs1,610,000 plus 45 percent of the amount exceeding Rs5,600,000.