In a move to ease the financial burden on Pakistan’s salaried class, the federal government has announced substantial tax relief measures in the Federal Budget 2025-26, as detailed in the budget speech.
The new budget reduces tax rates across all income slabs for salaried individuals, aiming to provide much-needed financial respite amid economic challenges.
The budget introduces a revised tax structure for salaried individuals, significantly lowering tax rates and amounts across various income brackets:
Income between Rs600,000 and Rs1.2 million: The tax rate has been set at 1%, with the tax liability on an income of Rs1.2 million reduced from Rs30,000 to Rs6,000.
Income up to Rs2.2 million: The tax rate has been slashed from 15% to 11%.
Income between Rs2.2 million and Rs3.2 million: The tax rate has been lowered from 25% to 23%, providing relief to higher-earning salaried individuals.
These reductions across all tax slabs reflect the government’s commitment to supporting the salaried class, which has faced significant economic pressures due to inflation and rising living costs.
