Salaried class likely to get income tax relief in FY2025-26 budget
- By Web Desk -
- May 23, 2025
ISLAMABAD: The Salaried class of Pakistan is likely to get relief in income tax in the FY2025- 26 budget, ARY News reported Friday, citing sources.
As per details, the final phase of budget negotiations between Pakistan and the International Monetary Fund (IMF) is underway.
Prime Minister Shehbaz Sharif had earlier directed that relief measures be introduced for salaried individuals. According to a briefing given to the prime minister, the government collected more tax than anticipated from the salaried segment during the current fiscal year.
Sources indicate that income tax relief of 2.5% could be provided across all income slabs for salaried employees. Additionally, similar tax rate reductions are being considered for the corporate sector, while the Prime Minister has also instructed a 0.5% reduction in the super tax.
There is a strong possibility that annual income up to Rs1 million (approx. Rs83,000 per month) may be declared tax-exempt, increasing the current exemption threshold from Rs600,000 annually.
Read more: FBR ‘requests’ IMF to reduce tax collection target for FY2025-26
According to new proposals for salaried class, the income tax ratio will be brought to 2.5 per cent from 5pc for the individuals earning Rs100,000 per month.
Individuals earning Rs183,000 per month will likely pay income tax upto 12.5 per cent in the new budget proposals.
The income tax ratio will be brought down to 22.5pc from current 25pc for the salaried individuals slab of Rs267,000.
The roposals are expected to be discussed in detail with the IMF as part of the ongoing talks for the upcoming budget.