Revised finance bill 2025-26: No tax on salaries up to Rs600,000, new slabs introduced

ISLAMABAD: Under the amended finance bill for fiscal year 2025-26, individuals earning up to Rs600,000 annually will be exempt from income tax.

Those earning between Rs600,001 and Rs1.2 million annually will be required to pay 1% income tax.

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In the second slab, salaried individuals earning between Rs1.2 million and Rs2.2 million annually will pay a fixed tax of Rs6,000 plus 11% income tax on the amount exceeding Rs1.2 million.

In the third slab, individuals earning between Rs2.2 million and Rs3.2 million per year will pay Rs116,000 fixed tax plus 23% income tax on the amount exceeding Rs2.2 million.

In the fourth slab, for annual salaries between Rs3.2 million and Rs4.1 million, a fixed tax of Rs346,000 plus 30% income tax will apply.

In the fifth slab, those earning above Rs4.1 million annually will pay Rs616,000 in fixed tax plus 35% income tax on the amount exceeding Rs4.1 million.

The sixth slab imposes a 35% income tax on all salaried individuals earning more than Rs4.1 million annually.