Budgetary Measures and Income Tax Changes in Pakistan
Sales Tax Measures for FY 2024-25
The proposed budgetary measures for Sales Tax in FY 2024-25 include the withdrawal of various exemptions and zero-rating.
Income Tax Regulations for 2024-2025
Income Tax Slabs and Rates
As per the latest income tax regulations for the year 2024-2025, the following income tax slabs and rates will be applicable:
- Up to PKR 250,000: Nil
- PKR 250,001 - PKR 500,000: 5%
- PKR 500,001 - PKR 1,000,000: 10%
- PKR 1,000,001 - PKR 2,000,000: 15%
- PKR 2,000,001 - PKR 5,000,000: 20%
- PKR 5,000,001 and above: 25%
Increased Income Tax Rates for Salaried Individuals
The Pakistani government has implemented increased income tax rates for salaried individuals in the new Finance Act.
Tax Rates for Non-Salaried Individual AOPs
For the tax year 2024, the tax rates for non-salaried individual AOPs (Association of Persons) are as follows:
- Up to PKR 1,000,000: 15%
- PKR 1,000,001 - PKR 2,000,000: 20%
- PKR 2,000,001 - PKR 5,000,000: 25%
- PKR 5,000,001 and above: 30%
Progressive Income Tax Structure
Income tax rates in Pakistan are progressive, meaning that higher levels of income are taxed at higher rates.
Finance Bill 2024 Clarification
The Finance Bill 2024 clarifies that the value of assessment of tax refers to the net increase in tax liability as a result of an order sought.
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