The government has taken a significant measure to provide substantial relief to low -income and intermediate income sectors, offering up to a 4% drop in income tax in various slabs.
Presenting the federal budget for the year 2025-26, the Minister of Finance Muhammad Aurangzeb said that the Prime Minister had constantly frightened by the drop in taxes on employees.
“Keeping this goal in mind, we have proposed a drop in income tax in all slabs,” he said. “This measure will not only facilitate the existing fiscal structure, but will also establish a crucial balance between inflationary pressures and the take -out salary of individuals by attenuating the tax burden.”
Under the new budget, individuals earning between 0.6 million rupees (50,000 rupees per month) and 1.2 million rupees per year (Rs 100,000 per month) should receive significant tax relief, because the government has reduced its tax rate by 5% to one percent. For those who earn up to 100,000 rupees per month, the federal budget also offers a reduction in the amount of total tax of 30,000 rupees to 6,000 rupees.
Similarly, individuals earning up to 2.2 million rupees per year will see a 4% drop in wages, overlying the 15% to 11%.
Some reductions have also been extended to the higher income tranche. Individuals winning up to 3.2 million rupees will benefit from a decrease of 2%, reducing their tax rate from 25% to 23% for the next financial year.
Meanwhile, in a movement to mitigate the phenomenon of brain flight, which sees professional human resources faced with the highest tax charge in the region, the government has proposed a decrease of one percent of the overload applied to individuals earning more than 10 million rupees per year.
Earlier, it was revealed that the salaried class had paid RS331 billion income tax during the eight months of the current financial year, which is 1,350% more than taxes paid by retailers, but still not enough for the government to require a recovery from the International Monetary Fund (IMF) for the marginalized segment.
Total contributions to employee income tax during the period from July to February of this financial year were 120 billion rupees, 56% higher than the 211 billion rupees collected during the same period of the last financial year.
Last year, the salaried class paid 368 billion tax rupees. But despite this exhausting burden on employees, who pay taxes on their gross income without adjusting expenses, the government did not address the question of reducing this burden with the IMF during recently organized talks.
