Tax for salaried individuals 2024- 2025
It can be challenging to manage taxes, particularly for paid employees whose taxes are regularly deducted at the source. You must comprehend the effects of the most recent modifications to the Finance Act 2024 on your net take-home pay as well as the methods you can use to control your tax liability.
Revised Income Tax Slabs for Salary Earners
The Federal Board of Revenue (FBR) has revised income tax slabs for salaried persons for fiscal year 2024-2025. The new arrangement provides for a more progressive regime with an effort to allocate the burden more equitably.
Here is a rundown of the new tax slabs:
| Sr. No. | Annual Taxable Income (PKR) | Tax Rate |
| 1 | Up to 600,000 | 0% |
| 2 | 600,001 – 1,200,000 | 5% of the amount exceeding 600,000 |
| 3 | 1,200,001 – 2,200,000 | 30,000 + 15% of the amount exceeding 1,200,000 |
| 4 | 2,200,001 – 3,200,000 | 180,000 + 25% of the amount exceeding 2,200,000 |
| 5 | 3,200,001 – 4,100,000 | 430,000 + 30% of the amount exceeding 3,200,000 |
| 6 | Above 4,100,000 | 700,000 + 35% of the amount exceeding 4,100,000 |
Important Modifications and Their Effects
- Increased Tax Rates for Lower Income Categories: The rate of tax on individuals with an income between PKR 600,001 and PKR 1,200,000 has been raised from 2.5% to 5%, doubling the taxation for this income category.
- Introduction of Extra Slabs: The new tax regime has extra slabs of tax, allowing for a more discriminatory tax system and making sure that people who earn more pay a more equitable percentage of taxes.
- Relief in Tax in Coming Budget: For lessening the tax rate on the salaried class, the government is considering bringing down the tax by as much as 10% in the coming budget for the year 2025–2026. The source is Pakistan Today. Tax Deductions and Credits Available
In spite of modifications, there remain several options for salaried individuals to reduce the quantum of taxes paid:
- VPS, or the Voluntary Pension Scheme: Tax relief on contributions to approved VPS is advantageous for long-term savings.
- Giving to Approved Charitable Organizations: Donations to charities to whom FBR approval has been granted can be offset against income chargeable to tax.
- Educational Expenses: Under some limitations, salaried taxpayers having up to PKR 1.5 million income per annum can deduct the cost of tuition of their children.
Tax Deductions and Credits Available
In spite of modifications, there remain several options for salaried individuals to reduce the quantum of taxes paid:
- VPS, or the Voluntary Pension Scheme: Tax relief on contributions to approved VPS is advantageous for long-term savings.
- Giving to Approved Charitable Organizations: Donations to charities to whom FBR approval has been granted can be offset against income chargeable to tax.
- Educational Expenses: Under some limitations, salaried taxpayers having up to PKR 1.5 million income per annum can deduct the cost of tuition of their children.
Tips for Good Tax Management
- Keep Proper Records: For keeping proper records, keep detailed account of all deductions, income, and tax papers.
- Use Tax Credits and Deductions: To reduce taxable income, make the most of all tax credits and deductions.
- Submit Returns on Time: Verify that tax
Final Thoughts
The introduction of a new tax system for the 2024–2025 financial year is proof of the initiative taken by the government to establish a more harmonized tax regime. While certain sections will bear an increased burden, the expectation of tax relief in the upcoming budget is assuring to the salaried class. Keeping oneself updated and being proactive with regard to tax planning ensures efficient handling of liabilities.
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