ISLAMABAD – The federal government has unveiled the revised slabs of income tax deduction on monthly salaries starting from July 2025 as the federal budget for fiscal year 2025-26 has been approved by the National Assembly.
As per the revised slabs, individuals earning up to Rs50,000 per month or Rs600,000 per year will be exempted from income tax, according to the reports.
However, the individuals with their annual earnings between Rs600,001 and Rs1.2 million pay 1 percent income tax. For example, you earn Rs100,000 per month and your new income tax will be Rs1,000.
Furthermore, people earning between Rs1.2 million and Rs2.2 million annually will have to a fixed tax of Rs6,000 plus 11 percent income tax on the amount exceeding Rs1.2 million, reports claimed.
Following are the revised slabs unveiled after amending the finance bill 2025-26:
| Slab | Annual Income Range (PKR) | Fixed Tax (PKR) | Rate on Exceeding Amount |
|---|---|---|---|
| 1 | Up to 600,000 | 0 | 0% |
| 2 | 600,001 – 1,200,000 | 0 | 1% |
| 3 | 1,200,001 – 2,200,000 | 6,000 | 11% on amount above 1.2M |
| 4 | 2,200,001 – 3,200,000 | 116,000 | 23% on amount above 2.2M |
| 5 | 3,200,001 – 4,100,000 | 346,000 | 30% on amount above 3.2M |
| 6 | Above 4,100,000 | 616,000 | 35% on amount above 4.1M |
A day earlier, the National Assembly has approved the federal budget for the fiscal year 2025–26, totaling Rs 17.573 trillion.
Presented by Finance Minister Muhammad Aurangzeb, the budget introduces several significant fiscal reforms, new taxation measures, and adjustments in key sectors.
The government approved arrest in Sales tax fraud involving Rs 50 million or more. Issuing fake invoices, forging records, destroying evidence, or attempting to flee abroad will also land you behind bars.
Arrests must be approved by an FBR committee; detainees to be presented before a magistrate within 24 hours.
A 20% rise in the Benazir Income Support Programme (BISP) budget — the largest-ever allocation — as demanded by PPP. Additional grants, though opposition alleges unfair distribution.
