In a significant move, the income tax slabs for salaried individuals have once again been revised on the directive of Prime Minister Shehbaz Sharif.
According to details, the National Assembly’s Standing Committee on Finance, chaired by Syed Naveed Qamar, approved the changes during a recent session.
The latest revision reduces the income tax rate from 2.5% to 1% for individuals earning between PKR 600,000 and 1.2 million annually.
Initially, the 2025–26 federal budget had set a 2.5% tax rate for this income bracket. However, the government has now opted for a more favorable rate of 1%, offering immediate relief to the salaried class.
The International Monetary Fund (IMF) has reportedly agreed to this revised exemption structure, endorsing the 1% tax on annual incomes up to PKR 1.2 million.
The minimum payable tax for individuals earning up to PKR 1.2 million has also been reduced from PKR 30,000 to approximately PKR 6,000, offering direct financial relief.
Additionally, taxpayers earning between PKR 2.2 million and 3.2 million annually will benefit from a reduction in tax rate from 25% to 23%, as higher-income brackets also receive adjusted, more favorable rates.
