Decoding Pakistan's Income Tax Slabs: A 2024-2025 Comparison

Understanding your income tax bracket is crucial for accurate tax filing. Here's a breakdown of Pakistan's income tax slabs for the 2024 and 2025 tax years, highlighting the key changes:

Tax Year 2024

The 2024 tax structure features six income slabs with varying tax rates:

• Exemption Upto Rs. 600,000: Individuals earning up to Rs. 600,000 annually have a complete tax exemption.
• 15% Tax Bracket (Rs. 600,000 - Rs. 1,200,000): Income exceeding Rs. 600,000 but not exceeding Rs. 1,200,000 is taxed at 15% on the amount exceeding the exemption limit (Rs. 600,000).
• Progressive Rates Above Rs. 1,200,000: For income exceeding Rs. 1,200,000, a fixed amount of tax is added to a progressively increasing tax rate based on the remaining income.

Tax Year 2025

The 2025 tax structure introduces adjustments to the slabs and rates:

• Exemption Upto Rs. 600,000 Remains: Similar to 2024, income up to Rs. 600,000 remains exempt from tax.
• Reduced Tax Rate for Lower Middle Income (Rs. 600,000 - Rs. 800,000): A new tax bracket emerges for income between Rs. 600,000 and Rs. 800,000, taxed at a lower rate of 7.5% on the amount exceeding Rs. 600,000.
• Revised Progressive Rates: The fixed tax amounts and progressive tax rates for income exceeding Rs. 800,000 differ from those in 2024.

Key Changes:

• Reduced Tax Burden for Lower Middle Income: The introduction of a lower tax rate for income between Rs. 600,000 and Rs. 800,000 in 2025 offers some tax relief for this income group.
• Adjusted Progressive Rates: The fixed tax amounts and progressive tax rates have been revised for income exceeding a certain threshold in 2025.

Conclusion:

Understanding the income tax slabs and their changes between 2024 and 2025 is essential for accurate tax filing in Pakistan. Ensure you are fulfilling your tax obligations correctly.

This article was published at New Salary Income Tax Slabs: A 2024-2025 Comparison