The National Assembly’s Standing Committee on Finance has approved changes to the income tax slabs under the Federal Budget 2025–26, offering tax relief for salaried individuals.
A key proposal passed during the committee meeting, chaired by Syed Naveed Qamar, is the reduction of income tax from 2.5% to 1% on annual income ranging between PKR 600,001 and PKR 1,200,000. The proposal is part of broader amendments to the Income Tax Ordinance 2001.
According to the updated tax slabs:
- Up to PKR 600,000/year – 0%
- PKR 600,001 to 1,200,000 – 1% on the amount above 600,000
- PKR 1,200,001 to 2,200,000 – PKR 6,000 + 11% on the amount above 1.2 million
- PKR 2,200,001 to 3,200,000 – PKR 116,000 + 23% on the amount above 2.2 million
- PKR 3,200,001 to 4,100,000 – PKR 346,000 + 30% on the amount above 3.2 million
- Incomes above PKR 4.1 million remain subject to 30–35% with a 9% surcharge on incomes over PKR 10 million
For example, individuals earning PKR 1,000,000 annually will now pay only PKR 4,000 in annual tax instead of the earlier PKR 10,000.
These changes follow proposals from the federal government aimed at restructuring the income tax regime for salaried individuals. The super tax on the corporate sector has also been reduced by 0.5%.
Taxpayers can use the Income Tax Calculator 2025 available online or other updated online tools to estimate their payable tax under the revised slabs.
