The Federal Board of Revenue (FBR) has introduced a new tax card for the salaried class, offering tax relief and ensuring a fair tax structure for the tax year 2024-25. This initiative designed to ease the financial burden on low-income earners while maintaining a structured tax system for higher-income employees.
Tax Exemption for Low-Income Earners
According to the FBR, individuals with annual earnings of up to Rs 600,000 are exempt from income tax. This exemption provides significant relief to low-income earners, ensuring they are not subject to any tax deductions on their income.
Tax Structure for Incomes Above Rs 600,000
For individuals earning more than Rs 600,000, the FBR has outlined the following tax brackets:
- Rs 600,000 to Rs 1.2 million: A 5% tax applied on earnings within this range. For instance, those earning Rs 1 million annually will pay a tax of Rs 20,000 on the Rs 400,000 that exceeds the exemption limit.
- Rs 1.2 million to Rs 2.2 million: A fixed tax of Rs 30,000 plus 15% on the amount exceeding Rs 1.2 million is applicable.
- Rs 2.2 million to Rs 3.2 million: Individuals in this bracket will pay a fixed tax of Rs 180,000 plus 25% on any income exceeding Rs 2.2 million.
- Rs 3.2 million to Rs 4.1 million: A fixed tax of Rs 430,000 plus 30% on the additional income above Rs 3.2 million is imposed.
- Above Rs 4.1 million: Those earning over Rs 4.1 million annually will incur a fixed tax of Rs 700,000, with an additional 35% tax on any income exceeding Rs 4.1 million.
Employer’s Responsibility for Tax Deduction
The FBR has directed all employers to ensure the correct tax deductions made from salaries, helping streamline the tax collection process. This step ensures that the salaried class contributes to the national revenue in a structured manner, based on their income levels.
Aims of the New Tax Card
This revised tax card for 2024-25 aims to offer relief to lower-income groups while implementing a fair and progressive tax system for higher-income earners. By introducing these changes, the FBR seeks to balance revenue collection with providing financial relief to the citizens.
For more details, individuals can consult the official FBR website or contact their employers to understand how the new tax rules apply to their salaries.
 has introduced a new tax card for the salaried class, offering tax relief and ensuring a fair tax structure for the tax year 2024-25. This initiative designed to ease the financial burden on low-income earners while maintaining a structured tax system for higher-income employees.){kind=link}