How much tax will be applied to employees in the new budget?
The new coalition government, in its first federal budget 2022-2023, made changes to the income tax collection bracket.
Presenting the budget, Finance Minister Miftah Ismail said the annual income tax threshold had been increased from 600,000 rupees to 1.2 million rupees.
This proposal effectively means that there will be no income tax for people earning up to Rs 100,000 per month.
The table below gives details of the tax rates applicable to the revised income brackets in Pakistan.
| S. No | Taxable income | Tax rate |
| 1. | When the taxable income does not exceed Rs. 600,000 | 0 |
| 2. | When the taxable income exceeds Rs600,000 but does not exceed Rs1,200,000 | Rs100 |
| 3. | When the taxable income exceeds Rs1,200,000 but does not exceed Rs2,400,000 | 7% of the amount exceeding Rs1,200,000 |
| 4. | When the taxable income exceeds Rs2,400,000 but does not exceed Rs3,600,000 | Rs84,000 + 12.5% of amount exceeding Rs2,400,000 |
| 5. | When the taxable income exceeds Rs3,600,000 but does not exceed Rs6,000,000 | Rs234,000 + 17.5% of the amount exceeding Rs3,600,000 |
| 6. | When the taxable income exceeds Rs6,000,000 but not Rs12,000,000 | Rs654,000 + 22.5% of the amount exceeding Rs6,000,000 |
| seven. | When the taxable income exceeds Rs12,000,000 | Rs 2,004,000 + 32.5% of the amount exceeding Rs 12,000,000 |
