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Tax relief to inflation-hit salaried class withdrawn

Top Story

June 12, 2019

ISLAMABAD: The Federal Board of Revenue (FBR) aims to get Rs50 billion closer to its overambitious revenue collection target by squeezing the pockets of the inflation-stricken salaried and non-salaried class further as it has proposed taxes on earnings exceeding taxable income ceiling of Rs600,000 and Rs400,000 respectively.

The FBR has proposed tax rate of 5 to 35 percent on twelve different slabs of salaried class through Finance Bill 2019-20. The Pakistan Tehreek-e-Insaf- (PTI) led government has withdrawn increased limit of taxable ceiling to Rs0.6 million from Rs1.2 million per annum.

The Finance Bill 2019 had proposed that where taxable income does not exceed Rs600,000, the tax rate would be zero. Now, where taxable income is over Rs600,000, but less than Rs1,200,000, there the income tax will be 5 percent of the amount exceeding Rs600,000, while in case of an income over Rs1,200,000, but under Rs1,800,000, the individual will have to pay Rs30,000 plus 10 percent of the amount exceeding Rs1,200,000 as income tax.

Where taxable income is above Rs1,800,000, but not over Rs2,500,000, the tax to be paid will be Rs90,000 plus 15 percent of the amount exceeding Rs1,800,000. Where taxable income oversteps Rs2,500,000, but does not pass Rs3,500,000, there will be Rs195,000 plus 17.5 percent of the amount exceeding Rs2,500,000.

Moreover, where taxable income surpasses Rs3,500,000, but stays under Rs5,000,000, there will be Rs370,000 plus 20 percent of the amount exceeding Rs3,500,000. Where taxable income exceeds Rs5,000,000 but does not go beyond Rs8,000,000, there will be Rs670,000 plus 22.5 percent of the amount exceeding Rs5,000,000.

Where taxable income is over Rs12,000,000, but does not go past Rs30,000,000, there will be Rs2,345,000 plus 27.5 percent of the amount exceeding Rs12,000,000. Where taxable income tops Rs30,000,000 but does not go over Rs50,000,000, there will be Rs7,295,000 plus 30 percent of the amount exceeding Rs30,000,000. Where taxable income exceeds Rs50,000,000, but does not exceed Rs75,000,000, there will be Rs13,295,000 plus 32.5 percent of the amount exceeding Rs50,000,000. Where taxable income exceeds Rs75,000,000, there will be Rs21,420,000 plus 35 percent of the amount exceeding Rs75,000,000.

For non- salaried class, where taxable income does not exceed Rs400,000, there will be zero tax, while where it oversteps Rs400,000, but not beyond Rs600,000, there will be 5 percent of the amount exceeding Rs600,000. Where taxable income surpasses Rs600,000, but does not exceed Rs1,200,000, there will be Rs10,000 plus 10 percent of the amount exceeding Rs600,000.

Where taxable income is more than Rs1,200,000, but less than Rs2,400,000, there will be Rs70,000 plus 15 percent of the amount exceeding Rs1,200,000.

Where taxable income is over Rs2,400,000, but under Rs3,000,000, there will be Rs250,000 plus 20 percent of amount exceeding Rs2,400,000.

Where taxable income is more than Rs3,000,000, but less than Rs4,000,000, there will be Rs370,000 plus 25 percent of the amount exceeding Rs3,000,000. Where taxable income exceeds Rs4,000,000, but does not go over Rs6,000,000, there will be Rs620,000 plus 30 percent of the amount exceeding Rs4,000,000. In case of taxable income exceeding Rs6,000,000, the tax will be Rs1,220,000 plus 35 percent of the amount exceeding Rs6,000,000.

Now Rs2,000 tax would be deducted on Rs100,000 monthly salary. Rs2,500 will be deducted on Rs150,000 per month salary; Rs5,000 will be deducted on Rs200,000 per month; Rs19,200 tax on Rs300,000; Rs37,500 tax will be deducted on Rs400,000 per month salary; Rs57,500 on Rs500,000 salary; Rs77,500 income tax will be deducted on Rs600,000 per month salary; Rs99,200 tax to be deducted on Rs700,000 per month salary; Rs124,200 tax will be deducted on Rs800,000 per month salary; Rs149,200 tax will be deducted on Rs900,000 per month; Rs174,200 tax to be deducted Rs1,000,000 per month salary; Rs299,200 monthly tax to be deducted on Rs1,500,000 monthly salary; Rs424,200 income tax will be deducted on Rs2,000,000 monthly salary; Rs674,200 tax will be deducted on Rs3,000,000 monthly salary; Rs924,200 income tax will be deducted on Rs4,000,000 monthly salary; Rs1,174,200 income tax will be deducted on Rs5,000,000 monthly salary; and Rs2,424,000 tax will be deducted on Rs10,000,000 per month salary.

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