The federal government of Pakistan is considering raising the annual taxable income threshold from Rs. 600,000 to Rs. 800,000 in the upcoming fiscal year 2025 budget. This proposed adjustment aims to alleviate the tax burden on the middle class, particularly salaried individuals who have been impacted by inflation. The change is contingent upon approval from the International Monetary Fund (IMF), as part of ongoing fiscal reforms.
Currently, individuals earning up to Rs. 600,000 annually are exempt from income tax. Those earning between Rs. 600,001 and Rs. 1,200,000 are taxed at a rate of 5% on the amount exceeding Rs. 600,000.
Tax Calculator Pakistan 2023-2024.
In addition to adjusting the income tax threshold, the government is reportedly considering imposing taxes on pensioners receiving substantial pensions, as part of broader efforts to expand the tax base.
These proposed changes are expected to be detailed in the forthcoming federal budget, anticipated in June 2025.
