Income tax rates for higher income brackets of salaried and non-salaried classes have been jacked up
A representational image. — Geo.tv illustration
The National Assembly on Sunday approved an amended Finance Bill 2023 which was revised to meet International Monetary Fund conditions in a last ditch effort to secure the release of more bailout funds.
The IMF in mid-June expressed dissatisfaction with the country's initial budget, saying it was a missed opportunity to broaden the tax base in a more progressive way.
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The revised budget was approved a day after Finance Minister Ishaq Dar introduced new taxes and expenditure cuts.
Besides introducing fresh taxation measures which would generate Rs215 billion in revenue, the finance bill also approved jacking up tax rates for higher income brackets of salaried and non-salaried classes in the budget.
Income tax slabs 2023
There's zero tax where taxable income does not exceed Rs600,000
Where the taxable income exceeds Rs600,000 but does not exceed Rs1,200,000 the tax rate would be 2.5% of the amount exceeding Rs600,000
The tax rate remained unchanged for salaried individuals where taxable income exceeds Rs1,200,000 but does not exceed Rs2,400,000. The rate of tax would remain at Rs15,000 + 12.5% of the amount exceeding Rs1,200,000.
Where the taxable income exceeds Rs2,400,000 but does not exceed Rs3,600,000, the rate of tax would be Rs165,000 + 22.5% of the amount exceeding Rs2,400,000.
Where the taxable income exceeds Rs3,600,000 but does not exceed Rs6,000,000, the rate of tax would be Rs435,000 + 27.5% of the amount exceeding Rs3,600,000.
Where the taxable income exceeds Rs6,000,000, the rate of tax would be Rs1,095,000 + 35% of the amount exceeding Rs6,000,000.
Calculate your annual income tax here with the help of the Geo.tv's calculator: