During the National Assembly (NA) budget session, Finance Minister Muhammad Aurangzeb presented the suggested amendments, highlighting the necessity of personal tax reforms.
Aurangzeb declared during the address that the new tax target was set at Rs 12.97 trillion, a 38 percent increase on an annual basis.
In addition to changing the tax slabs, he advised keeping the tax exemption on incomes up to Rs 600,000 per year and not raising the top slab for the salaried class.
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The tax rate on those making between Rs 600,000 and Rs 1.2 million per year is five percent of their income.
Individuals earning Rs 2.2 million annually will be subject to a fixed tax of Rs 30,000, with an extra 10 percent income tax on amounts over Rs 1 million.
Earnings between Rs2.2 million and Rs3.2 million would be subject to income tax at a set rate of Rs1.8 lakh plus 25 percent on sums over Rs1 million.
The tax rate for individuals making between Rs3.2 million and Rs4.1 million is Rs4.3 lakh (fixed) plus 30% income tax on sums over Rs9 lakh.
Over Rs 4.1 million in earnings, an individual will pay income tax at a fixed rate of Rs 7 lakh plus an additional 35 percent.
The federal budget for relief, totaling Rs18.877 trillion, was proposed by Finance Minister Aurangzeb for the fiscal year 2024–2025.
It is important to note that Muhammad Aurangzeb suggested raising employee pensions by 15% and increasing pay by 20–25 percent on an as-needed basis for Federal Government workers.
The minister stated that the government has chosen to provide 25% ad hoc relief in the pay of employees from Grades 1–16 and 20% to Grades 17–22 employees in order to increase their purchasing power, despite financial constraints.
Additionally, he declared raising the minimum salary to Rs 37000 per month from the current Rs 32000.