Understanding your tax obligations is crucial for responsible financial planning. This article provides a clear breakdown of tax rates for individual taxpayers in Pakistan for the tax year 2024. We’ll explore the different slabs (tax brackets) applicable to salaried and non-salaried individuals.
Tax Slabs for Non-Salaried (Business) Individuals and Associations of Persons (AOPs):
These rates apply to individuals whose income primarily comes from sources other than salaries, such as businesses, investments, or other incomes.
| Taxable Income (PKR) | Rate of Tax |
|---|---|
| Up to 600,000 | 0% |
| 600,000 – 800,000 | 7.5% of the amount exceeding PKR 600,000 |
| 800,000 – 1,200,000 | PKR 15,000 + 15% of the amount exceeding PKR 800,000 |
| 1,200,000 – 2,400,000 | PKR 75,000 + 20% of the amount exceeding PKR 1,200,000 |
| 2,400,000 – 3,000,000 | PKR 315,000 + 25% of the amount exceeding PKR 2,400,000 |
| 3,000,000 – 4,000,000 | PKR 465,000 + 30% of the amount exceeding PKR 3,000,000 |
| Above 4,000,000 | PKR 765,000 + 35% of the amount exceeding PKR 4,000,000 |
Tax Slabs for Salaried Individuals:
These rates apply to individuals whose primary source of income is salary income. The key difference is that the tax rate is lower if salary income makes up more than 75% of your total taxable income.
| Taxable Income (PKR) | Rate of Tax |
|---|---|
| Up to 600,000 | 0% |
| 600,000 – 1,200,000 | 2.5% of the amount exceeding PKR 600,000 |
| 1,200,000 – 2,400,000 | PKR 15,000 + 12.5% of the amount exceeding PKR 1,200,000 |
| 2,400,000 – 3,600,000 | PKR 165,000 + 22.5% of the amount exceeding PKR 2,400,000 |
| 3,600,000 – 6,000,000 | PKR 435,000 + 27.5% of the amount exceeding PKR 3,600,000 |
| Above 6,000,000 | PKR 1,095,000 + 35% of the amount exceeding PKR 6,000,000 |
Analysis of Tax Percentages:
The tax rates in Pakistan are progressive, meaning the tax percentage increases as your income rises. This ensures that higher earners contribute a larger portion of their income towards taxes.
- Non-salaried individuals and AOPs start paying tax at 7.5% for income exceeding PKR 600,000. The tax rate gradually increases to a maximum of 35% for income exceeding PKR 4,000,000.
- Salaried individuals benefit from lower tax rates. They only start paying tax at 2.5% for income exceeding PKR 600,000, and the maximum rate remains at 35%.
Remember:
This is a general overview of tax rates for salaried and non-salaried individuals in Pakistan for tax year 2024. Contact us for personalized free tax evaluation.
