The Federal Board of Revenue (FBR) has introduced a new tax card for the tax year 2024-25, aimed at providing relief to the salaried class, particularly low-income earners.
As per the new tax structure, individuals with annual earnings up to Rs 600,000 will be exempt from paying income tax. For those earning above this threshold, the tax rates have been revised.
For incomes between Rs 600,000 and Rs 1.2 million, a 5 percent tax will be applied. For individuals earning Rs 1 million, the tax will be Rs 20,000 on the Rs 400,000 that exceeds the exempt amount.
For incomes between Rs 1.2 million and Rs 2.2 million, the tax is fixed at Rs 30,000 plus 15 percent on the income above Rs 1.2 million. Salaries between Rs 2.2 million and Rs 3.2 million will incur a fixed tax of Rs 180,000, with an additional 25 percent on income exceeding Rs 2.2 million.
For those earning between Rs 3.2 million and Rs 4.1 million, a fixed tax of Rs 430,000 will apply, plus 30 percent on the extra income. Incomes above Rs 4.1 million will be subject to a fixed tax of Rs 700,000, with an additional 35 percent on the excess amount.
The FBR has instructed employers to deduct the applicable taxes from employees’ salaries to ensure efficient tax collection. This new structure aims to ease the financial burden on low-income earners while maintaining a balanced system for higher-income brackets.
