Thursday, July 4, 2024 07:19 PM
PML-N Adjusts Income Tax Brackets in New Budget
- Income tax rate increased for high earners, exemption for lower income bracket
- Introduction of tax slabs with rates up to 45%
- Potential raise in tax-free income threshold for salaried workers
Image Credits: dailypakistanenThe PML-N government adjusts income tax brackets in the federal budget to address economic challenges. High earners face increased rates while lower income groups may benefit from exemptions and potential threshold raises.
The federal government has recently announced significant changes to the income tax brackets in its inaugural budget for the upcoming fiscal year. These modifications are aimed at addressing the impact of high inflation rates on the general populace. One of the key adjustments made by the PML-N administration is the increase in the income tax rate for individuals earning Rs600,000 or more annually. On the other hand, individuals with a monthly salary of Rs50,000 will now be exempt from income tax obligations.
The introduction of various tax slabs is a notable feature of the new budget, with tax rates peaking at 45%. For example, individuals earning between Rs600,000 and Rs1.2 million annually will now face a 5% income tax rate, resulting in an increase from Rs1,250 to Rs2,500 in their tax payments. Similarly, those falling within the income bracket of Rs1.2 million to Rs2.2 million per year will be subject to a 15% tax, increasing their tax liability from Rs11,667 to Rs15,000.
Furthermore, individuals earning between Rs2.2 million and Rs3.2 million annually will now be taxed at a rate of 25%, while those with an annual income ranging from Rs3.2 million to Rs4.1 million will face a 30% tax rate. This adjustment will see their tax payments rise to Rs53,333 from the previous Rs47,468.
The government's proposal also includes a potential increase in the tax-free income threshold for salaried workers, possibly raising it to Rs900,000. This move could offer relief to certain segments of the population burdened by income tax obligations.
The changes in the income tax brackets introduced in the federal government's inaugural budget signify a significant shift in tax policies aimed at addressing economic challenges. While some individuals may experience higher tax liabilities, the proposed adjustments also offer potential relief to specific income groups. It is essential for taxpayers to stay informed about these changes to effectively manage their financial responsibilities.
