Saturday, August 20, 2022

Govt takes U-turn over income tax exemption after IMF agreement

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ISLAMABAD: The federal government has reversed its decision to exempt middle-income groups from taxation after it reached an understanding with the International Monetary Fund (IMF) for the release of a US$1 billion tranche, ARY NEWS reported.

Previously, the government announced in the budget that Rs100 will be charged from those having a personal earning of upto 1.2 million annually.

However, following an understanding reached with the IMF, the government has introduced a slab of Rs600,000 to Rs1.2 million and those part of it will have to pay a 2.5 percent tax on their earnings.

On incomes ranging between Rs1.2 million to Rs2.4 million, there will be a fixed tax of Rs 15,000 and an additional 12.5 percent income tax.

A 20 percent tax and Rs165,000 will be payable by those having earnings between Rs2.4 million to Rs3.6 million.

For incomes ranging between Rs3.6 million and Rs6 million, 25 percent tax will be imposed along with a fixed payment of Rs405,000.

Read More: IN A FIRST, 2.6M PAKISTANIS FILE INCOME TAX RETURNS

Those earning between Rs6 million to Rs12 million will have to pay over Rs1 million fixed amount in addition to 32.5 percent income tax while those having income over Rs12 million will pay 35 percebt income tax along with Rs2.9 million fixed amount.

The new tax slabs will be applicable from July 01.

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