FBR announced tax card for salaried employees. Here all you need to know

The Federal Board of Revenue (FBR) announced a new tax card for salaried employees, valid for tax year 2024-25. This move aims to give tax relief to the salaried class.

FBR announced employees with an annual income of up to PKR 600,000 will not be subject to income tax. It will help low-income earners in Pakistan.

However, FBR follows the tax structure for employees who earn more than PKR 600,000 as part of the exemption. Let’s dive into the new tax card:

This implies that for those earning between PKR 600,000 and PKR 1.2 million annually. The tax rate for them is 5%.

If their salary is Rs 1 million, they will be taxed on the PKR 400,000 (as it is above the Rs 600,000 exemption). So, they would pay Rs 20,000 as tax on that amount.

If someone earns between PKR 1.2 million and PKR 2.2 million per year, they will pay a fixed amount of PKR 30,000. Moreover, they will also pay a 15% tax on the money they earn above Rs 1.2 million.

Employees earning between PKR 2.2 million and PKR 3.2 million annually will pay a fixed amount of PKR 180,000. In addition, they will pay a 25% tax on the amount they earn above PKR 2.2 million.

Employees who earn between PKR 3.2 million and PKR 4.1 million, have to pay a fixed tax of PKR 430,000. They will also pay a 30% tax on income over PKR 3.2 million.

While those earning more than PKR 4.1 million will pay a fixed rate of PKR 700,000 in a year. On top of that, they also have to pay a 35% tax on any income that exceeds PKR 4.1 million.

*Employees earning less than PKR 600,000 have an exemption from FBR income tax*

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Hence, FBR has announced this new tax card for salaried employees for 2024-25. It has directed employers to deduct relevant taxes from employees’ salaries to ensure tax collection as responsible citizens of Pakistan.

FBR’s goal is to keep the system simple for those with high incomes while reducing the burden on those with low incomes through this new tax card.

FBR has previously taken strict steps to broaden the tax circle to the people of Pakistan. It has proposed SIM blockage while cutting gas and electricity for non-tax filers.