Finance Minister announced the Federal budget for 2023-2024 on May 9th, 2023. The Finance Act 2023 amended the withholding rules regarding the taxation of salaried individuals. Following are the new Revised Tax slab rates for people earning a Salary in PAKISTAN.
|Taxable Income||Tax Rates|
|Where Taxable Income does not exceed Rs. 600,000||0%|
|Where Taxable Income exceeds Rs. 600,000 but does not exceed Rs. 1,200,000||2.5% of the amount exceeding Rs. 600,000|
|Where Taxable Income exceeds Rs. 1,200,000 but does not exceed Rs. 2,400,000||Rs. 15,000 + 12.5% of the amount exceeding Rs. 1,200,000|
|Where Taxable Income exceeds Rs. 2,400,000 but does not exceed Rs. 3,600,000||Rs. 165,000 + 22.5% of the amount exceeding Rs. 2,400,000|
|Where Taxable Income exceeds Rs. 3,600,000 but does not exceed Rs. 6,000,000||Rs. 435,000 + 27.5% of the amount exceeding Rs. 3,600,000|
|Where Taxable Income exceeds Rs. 6,000,000||Rs. 1,095,000 + 35% of the amount exceeding Rs. 6,000,000|
Salary: Salary means any amount received by an employee from any employment, whether of a revenue or capital nature. ( Income Tax Ordinance, 2001 )
Basic Salary: Amount received by an employee from the employer without including benefits, allowances, and perquisites.
Allowances: Additional benefits paid by the employer to the employee such as Medical Allowance, Conveyance allowance, House rent allowance, Utilities, and others.
Reimbursement: Amount spent by the employee but paid back by an employer including Medical Facility, TA/ DA, Salary of Domestic servants, etc.
Although every care has been taken in this article in light of the Finance Act, 2023, however, Column and Rows shall not be responsible for any loss or damage caused to any person on account of errors or omissions which might have crept in. Readers are requested to refer to the relevant laws to find the exact interpretation of the law here ( https://www.fbr.gov.pk/Categ/Finance-Acts/620 )