Taxes are a necessary part of life in any country, and Pakistan is no exception. The Pakistani government collects taxes from individuals and businesses in order to fund public services such as education, healthcare, and infrastructure.
The tax system in Pakistan is complex, and it can be difficult to understand the different types of taxes that are imposed. This blog post will provide a comprehensive overview of Pakistan income tax rates, including the different tax brackets, deductions, and exemptions.
Income Tax Brackets in Pakistan:
The income tax brackets in Pakistan are progressive, which means that the higher your income, the higher your tax rate. The current income tax brackets for Salaried Individuals in Pakistan are as follows:
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Taxable Income Existing Rates New Rates 1. Where the taxable income does not exceed Rs 600,000 Rs. 0 Rs. 0 2. Where the taxable income exceeds Rs 600,000 but does not exceed Rs 1,200,000 2.5% of the amount exceeding Rs 600,000 2.5% of the amount exceeding Rs 600,000 3. Where the taxable income exceeds Rs 1,200,000 but does not exceed Rs 2,400,000 Rs 15,000 + 12.5% of the amount exceeding Rs 1,200,000 Rs 15,000 + 12.5% of the amount exceeding Rs 1,200,000 4. Where the taxable income exceeds Rs 2,400,000 but does not exceed Rs 3,600,000 Rs 165,000 + 20% of the amount exceeding Rs 2,400,000 Rs 165,000 + 22.5% of the amount exceeding Rs 2,400,000 5. Where the taxable income exceeds Rs 3,600,000 but does not exceed Rs 6,000,000 Rs 405,000 + 25% of the amount exceeding Rs 3,600,000 Rs 435,000 + 27.5% of the amount exceeding Rs 3,600,000 6. Where the taxable income exceeds Rs 6,000,000 but does not exceed Rs 12,000,000 Rs 1,005,000 + 32.5% of the amount exceeding Rs 6,000,000 Rs 1,095,000 + 35% of the amount exceeding Rs 6,000,000 7. Where the taxable income exceeds Rs.12,000,000 Rs 2,955,000 + 35% of the amount exceeding Rs 12,000,000 Rs 1,095,000 + 35% of the amount exceeding Rs 6,000,000 - Individual Businesses/ AOPS:
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Taxable Income Existing Rates New Rates 1. Where the taxable income does not exceed Rs 600,000 0% 0% 2. Where the taxable income exceeds Rs 600,000 but does not exceed Rs 800,000 5% of the amount exceeding Rs 600,000 7.5% of the amount exceeding Rs 600,000 3. Where the taxable income exceeds Rs 800,000 but does not exceed Rs 1,200,000 Rs 10,000 + 12.5% of the amount exceeding Rs 800,000 Rs 15,000 + 15% of the amount exceeding Rs 800,000 4. Where the taxable income exceeds Rs 1,200,000 but does not exceed Rs 2,400,000 Rs 60,000 + 17.5% of the amount exceeding Rs 1,200,000 Rs 75,000 + 20% of the amount exceeding Rs 1,200,000 5. Where the taxable income exceeds Rs 2,400,000 but does not exceed Rs 3,000,000 Rs 270,000 + 22.5% of the amount exceeding Rs 2,400,000 Rs 315,000 + 25% of the amount exceeding Rs 2,400,000 6. Where the taxable income exceeds Rs 3,000,000 but does not exceed Rs 4,000,000 Rs 405,000 + 27.5% of the amount exceeding Rs 3,000,000 Rs 465,000 + 30% of the amount exceeding Rs 3,000,000 7. Where the taxable income exceeds Rs 4,000,000 but does not exceed Rs 6,000,000 Rs 680,000 + 32.5% of the amount exceeding Rs 4,000,000 Rs 765,000 + 35% of the amount exceeding Rs 4,000,000 8. Where the taxable income exceeds Rs 6,000,000 Rs 1,330,000 + 35% of the amount exceeding Rs 6,000,000 Rs 765,000 + 35% of the amount exceeding Rs 4,000,000
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Deductions and Exemptions:
There are a number of deductions and exemptions that can be claimed against income tax in Pakistan. Some of the most common deductions include:
- Medical expenses
- Donations to charity
- Education expenses
- Transport expenses
- Housing expenses
There are also a number of exemptions that can be claimed, such as:
- Income from pensions
- Income from government jobs
- Income from agriculture
Conclusion:
This blog post has provided a comprehensive overview of Pakistan income tax rates. If you have any questions about Pakistan income tax rates, you should consult with a tax advisor.
Additional Information:
- The Federal Board of Revenue (FBR) is the government agency responsible for collecting taxes in Pakistan.
- The FBR website has a wealth of information about Pakistan income tax rates, including forms, instructions, and calculators.
- You can also contact the FBR directly for more information.
