Income tax calculator: How much will you pay after Federal Budget FY26

Finance Minister Muhammad Aurangzeb presented the federal budget 2025-26 on Tuesday, outlining new income tax measures for the salaried class.

Addressing the budget session, the finance czar said that Prime Minister Shehbaz had made it a priority to support salaried individuals, who have long shouldered a disproportionate share of taxes.

In line with that, the government has proposed across-the-board cuts in income tax rates for the salaried class.

The biggest relief targets taxpayers earning up to Rs2.2 million annually, with the minimum rate reduced from 15% to 11% — a 4% fall.

Tax rate for individuals making between Rs600,000 and Rs1.2 million a year will drop from 5% to 2.5%.

For those earning between Rs2.2 million and Rs3.2 million, the tax rate is expected to ease from 25% to 23%.

The finance minister said similar cuts are being proposed for higher income brackets as well.