The federal government is considering providing approximately Rs50 billion in tax relief to the salaried class in the budget for the new fiscal year. As part of the proposed reforms, the number of income tax slabs may be increased from six to eight.
According to media reports, tax relief is being considered for individuals earning more than Rs183,000 per month.
Proposals are also under review to reduce tax rates for higher-income earners. Under the proposed plan, income tax on monthly earnings of up to Rs267,000 could be reduced by five percentage points, bringing the tax rate in this slab down from 25 per cent to 20 per cent. Around 400,000 salaried employees are expected to benefit from this measure.
Sources further indicate that a 29 per cent tax rate has been proposed for individuals earning up to Rs467,000 per month, while a 32 percent tax rate is under consideration for those earning up to Rs583,000 per month.
The maximum income tax rate is likely to remain at 35 per cent for individuals with monthly incomes exceeding Rs583,000. The same rate is proposed for those earning more than Rs7 million annually. Meanwhile, the government is considering abolishing the surcharge currently imposed on individuals with annual incomes exceeding Rs10 million.
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