People are looking at the Income Tax Slabs Pakistan 2023 as well as the complete details that have been issued by the government of Pakistan going to listed below and people can read with complete details. In addition, the complete facts and figures about income tax slabs in Pakistan are here.
Income Tax Budget for Fiscal Year 2023-24 Pakistan
Income tax is a form of direct tax that a government imposes on its people’s earnings. Every year in its Budget, the government can adjust the income slabs and tax rates. The Federal Budget for The fiscal Year 2023-24 Pakistan is built on progressive taxation principles with a clear emphasis on direct taxes.
Income Tax Slabs Pakistan FY 2023-2024
The new coalition government has proposed seven income tax slabs for the country’s salaried people. The number of slabs was also cut from 12 to seven in the proposed budget. These are the slabs.
- No tax if you earn less than Rs.600,000 per year (less than Rs.50,000 per month).
- For a yearly income of Rs.600,000 – Rs.1.2 million (Rs.50,000 – Rs.100,000 per month), the tax rate is Rs.100.
- For income between Rs.1.2m and Rs.2.4m per year (Rs.100,000 to Rs.200,000 per month), 7% of the amount beyond Rs.1.2m is taxed.
- Rs.84,000 additional 12.5 percent of the amount over Rs.2.4 million per year (Rs.200,000 to Rs.300,000 per month) for income between Rs.2.4 million and Rs.3.6 million per year (Rs.200,000 to Rs.300,000 per month).
- Rs.234,000 additional 17.5 percent of the amount exceeding Rs.3.6 million (Rs.300,000 to Rs.500,000 per month) for revenue between Rs.3.6 million and Rs.6 million (Rs.300,000 to Rs.500,000 per month).
- Rs.654,000 additional 22.5pc of the amount exceeding Rs.6m for income between Rs.6m and Rs.12m per year (Rs.500,000 to 10,00,000 per month).
- Rs.2,004,000 additional 32.5pc of the amount above Rs.12m for an annual income of more than 12 million rupees (more than 10,00,000 per month).
Focus of 2023-2024 FY Income Tax
Increasing income tax and capital value tax, taxing unproductive assets and those that generate excessive profits, protecting productive assets, and bringing balance through wealth distribution by taxing the wealthy and rich are some of these ideas.
Taxation Structure for all Classes
The rich and wealthy in Pakistan must make significant sacrifices during these difficult times. It is time for the privileged and affluent parts of society to step forward and play a key role in Pakistan’s socioeconomic growth. We urgently require a taxation system that benefits all asset groups equally.
Taxing the Wealthy
By taxing the wealthiest and providing practical aid to the poor and vulnerable the income tax plan for FY 2023-2024 intends to enhance the national economy. The Federal Board of Revenue (FBR) has proposed budgetary measures aimed at establishing a clear, effective, and equitable tax system that benefits taxpayers, maximizes tax compliance, and so makes doing business in the country easier.
Budget 2023-2024 FY for Salaried Class
The government’s budget for the fiscal year 2023-24 was a mixed bag for salaried income earners as it reduced tax rates and the number of slabs but removed credit options by eliminating the deductible allowance for debt profit and tax credits for investments in stocks, health insurance, and pension funds.
How the government will be benefitted?
The basic taxable salary threshold for salaried individuals is planned to be increased to Rs.1.2 million per year from the existing Rs.600,000 according to Finance Minister Miftah Ismail who presented the budget for the fiscal year 2023-24 in the National Assembly. The measures according to the finance minister would create a positive economic cycle in which money would be transferred to businesses as salaried people’s disposable income increases. Thus, ultimately the government will benefit through the thriving of businesses, the creation of more jobs, and future tax revenues.
IMF & Personal Income Tax Rates FY 2023-2024
The IMF wants to limit tax relief to people earning up to Rs0.2 million per month while increasing tax rates in all other brackets. The proposed Rs47 billion tax cut in Personal Income Tax (PIT) is completely unacceptable to the IMF leaving the government with little choice except to consider making revisions. The IMF has expressed serious doubts about the proposed Personal Income Tax rates under which the FBR has provided relief to persons earning up to 1.2 million rupees per annum.
Roadblock to reaching Staff-Level Agreement with IMF
To provide relief to the urban middle class the IMF wants to provide relief to individuals earning up to Rs0.2 million per month and then raise tax rates in all other categories. In the budget for 2023-24, the FBR suggested relief for persons earning up to one million rupees per month wage through the Finance Bill 2022 in parliament. If the planned PIT rates are not altered they could become a major roadblock to reaching an agreement with the IMF at the staff level.The IMF wanted to increase revenue collection by Rs.125 billion by putting PIT in a progressive format but the government went the other way and made it impossible for both sides to reach a staff-level agreement under the $6 billion Extended Fund Facility with the current Personal Income Tax proposal (PIT)
This is the complete info about Income Tax Slabs Pakistan as well we have discussed the recent budget information but if the government will change and present a new budget then we will update it.