The Senate committee offers tax exemption for annual income to Rs1.2 m

The Senate’s Standing Committee on Finance has recommended that income tax for individuals earn up to 1.2 million rupees per year. In addition, it approved a proposal to increase the limit of properties of properties by non-sequences from 130% to 500% of their declared assets.

The Committee met under the presidency of Senator Saleem Mandvala on Wednesday and carried out an examination by section of the 2025 financial bill.

During the meeting, FBR officials informed the committee that a new section had been presented in the finance bill to bring electronic commerce and leisure clubs in the tax net.

FBR officials said that in virtue of the new budget, a tax will be collected on the income of online academies and teachers, some of which earn up to 30 million rupees per year.

The president of the FBR, Rashid Langrial, informed the committee that people with an annual income of 1.2 million rupees would be liable to pay RS12 500 in annual taxes. He also said that the supplement on income over 10 million rupees had increased from 10 to 9%.

Langrial also declared that recreational clubs, including the Islamabad Club, would be taxed under the proposed bill. This proposal was opposed by the president of the Mandviwala committee, who pleaded against tax clubs.

However, the president of the FBR argued that these clubs were exclusive to a few privileged and do not serve the general public.

FBR managers also offered restrictions on non-selectors, including the limits of purchases of properties and vehicles. Initially, a 130% limit of property purchases was proposed, but Senator Mohin Aziz suggested increasing it, arguing that a non-filter with 10 million rupees in declared assets should be authorized to buy a property worth 50 million rupees.

After the deliberation, the Committee approved the increase in the purchase limit of ownership for non-sequences from 130% to 500%.

Senator Shibli Faraz argued that no tax should be imposed on wages until Rs1.2 million, arguing that a monthly income of 100,000 rupees is equivalent to only 42,000 rupees under the economic conditions of today.

The Committee rejected the taxation of tax on people winning up to Rs1.2 million per year and on small online businesses.

The Minister of State for Finance Bilal Azhar Kiyani said that taxes would apply when income exceeds spending and stressed that this measure targets the privileged class.

The Minister of Finance, Muhammad Aurangzeb, added that the sanctions for non-selectors increased last year and that efforts are continuing to bring non-sequences into the tax net.

A new section, 17C, has been added to the 2025 financial bill, under which the online markets engaged in electronic commerce will be taxed. Individuals providing internet services and electronic networks – such as music, audio and video streaming platforms, cloud services, online software, telemedicine and online learning – will also be subject to taxation.

In addition, online bank, architectural design, research and advice, digital accounting and other digital services will be taxed. However, the committee rejected a proposal to tax small online businesses.