ISLAMABAD – Pakistani government proposed revised income tax slabs for upcoming fiscal year, with the new rates set to take effect from July 1 following parliamentary approval.
The final draft of Finance Bill is scheduled to be presented in the National Assembly today, introducing changes aimed at easing the tax burden on some income groups while maintaining a progressive tax structure for higher earners.
Under the proposed framework, individuals earning up to Rs600,000 annually will remain exempt from income tax. For those earning between Rs600,000 and Rs1.2 million, the tax rate has been set at 1 percent, offering relief to lower-income salaried workers.
One of the most notable changes comes for individuals earning between Rs2.2 million and Rs3.2 million annually, where the tax rate on additional income has been reduced from 23 percent to 20 percent, potentially increasing take-home pay for a segment of middle-income professionals.
| Annual Income | Fixed Tax | Tax |
|---|---|---|
| Up to Rs600,000 | No Tax | 0% |
| Rs600,001 – Rs1,200,000 | None | 1% |
| Rs1,200,001 – Rs2,200,000 | Rs6,000 | 11% |
| Rs2,200,001 – Rs3,200,000 | Rs116,000 | 20% |
| Rs3,200,001 – Rs4,100,000 | Rs346,000 | 25% |
| Rs4,100,001 – Rs5,600,000 | Rs541,000 | 29% |
| Rs5,600,001 – Rs7,000,000 | Rs976,000 | 32% |
| Above Rs7,000,000 | Rs1,424,000 | 35% |
According to the proposed slabs, taxpayers earning between Rs1.2 million and Rs2.2 million will pay a fixed tax of Rs6,000, along with 11 percent on income exceeding Rs1.2 million. Those earning between Rs2.2 million and Rs3.2 million will be liable for a fixed tax of Rs116,000, plus 20 percent on the amount above Rs2.2 million.
For higher income brackets, taxpayers earning Rs3.2 million to Rs4.1 million annually will pay a fixed tax of Rs346,000 and 25 percent on additional income. Those earning Rs4.1 million to Rs5.6 million will face a fixed tax of Rs541,000 plus 29 percent on the excess amount.
Meanwhile, individuals earning between Rs5.6 million and Rs7 million annually will be subject to a fixed tax of Rs976,000 and 32 percent on income above the threshold. For those earning more than Rs7 million a year, the proposed tax liability rises to a fixed Rs1.424 million, along with 35 percent on income exceeding Rs7 million.
The revised tax structure comes at a time when salaried individuals have repeatedly voiced concerns about rising living costs and increasing tax deductions from monthly salaries. While many taxpayers are expected to welcome the reduction in certain tax rates, the overall impact of the new slabs on disposable income will become clearer once the Finance Bill is formally approved and implemented.
Budget 2026-27: Proposed Tax Slabs for Salaried Class in Pakistan
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