KARACHI: In a move to provide tax relief to salaried class, the Federal Board of Revenue (FBR) has issued a new tax card, applicable for the tax year 2024-25.
Offering a relief to low-income earners, FBR stated that the individuals with annual earnings up to Rs 600,000 will be exempt from income tax.
However, for those earning more than Rs 600,000, the tax structure is as follows: a 5 percent tax is applicable on incomes between Rs 600,000 and Rs 1.2 million per year, meanwhile, for a salary of Rs 1 million, Rs 20,000 tax applies on the Rs 400,000 that exceeds the exemption.
The FBR stated that the incomes between Rs 1.2 million and Rs 2.2 million have to pay a fixed tax of Rs 30,000 plus 15 percent on the amount above Rs 1.2 million.
On the other hand, for salaries between Rs 2.2 million and Rs 3.2 million, the tax is Rs 180,000 plus 25 percent on any income exceeding Rs 2.2 million.
Furthermore, incomes between Rs 3.2 million and Rs 4.1 million incur a fixed tax of Rs 430,000 plus 30 percent on the extra income, and for those earning over Rs 4.1 million, a fixed tax of Rs 700,000 is applied, with an additional 35 percent on income above Rs 4.1 million.
The FBR directed the employers to deduct the applicable taxes from salaries, to ensure streamlined tax collection from the citizens.
This move aims to reduce the burden on low-income earners while maintaining a structured system for higher-income employees.
