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Amended Proposed Budget 2022-23 FBR Pivotals

ISLAMABAD: Budget 2022-23 of Pakistan was put on the floor of Parliament all you need to be aware of Budget FY 2022-23 is depicted exhaustively beneath the post. Finance Minister Mr. Miftah Ismail reveal the spending plan for 2022-23 on the house floor. This post will discuss the pivotal features of Taxation (Proposed amendments in Tax ordinance 2001 & Finance Bill FBR Pakistan).

Tax Slab Rates For SALARIED

In the budget for the fiscal year 2022-23, the government has exempted those earning up to Rs100,000 per month from paying income tax — increasing the limit from the earlier Rs50,000 per month.

Additionally, the government has issued a revised list of income tax slabs for salaried individuals. Earlier, there were 12 slabs, which have now been reduced to seven.

Taxable IncomeTax Liability
Where the taxable income doesn’t exceed PKR 600,000/-PKR 0/-
Where the taxable income exceeds PKR 600,000/- but doesn’t exceed PKR 1,200,000/-2.5% of the amount exceeding PKR 600,000/-
Where the taxable income exceeds PKR 1,200,000/- but doesn’t exceed PKR 2,400,000/-PKR 15,000 + 12.5% of the amount exceeding PKR 1,200,000/-
Where the taxable income exceeds PKR 2,400,000/- but doesn’t exceed PKR 3,600,000/-PKR 165,000 + 20% of the amount exceeding PKR 1,200,000/-
Where the taxable income exceeds PKR 3,600,000/- but doesn’t exceed PKR 6,000,000/-PKR 405,000 + 25% of the amount exceeding PKR 3,600,000/-
Where the taxable income exceeds PKR 6,000,000/- but doesn’t exceed PKR 12,000,000/-PKR 1005,000 + 32.5% of the amount exceeding PKR 6,000,000/-
Where the taxable income exceeds PKR 12,000,000/-PKR 2,955,000 + 35% of the amount exceeding PKR 12,000,000/-
Salary Tax Slabs For Tax Year 2023

Tax Rate For Individuals & AOP

In the budget for the fiscal year 2022-23, the government has enhanced the exempt slab rate from PKR 400,000 to PKR 600,000.

Additionally, the government has issued a revised list of income tax slabs for salaried individuals. By increasing the exempt tax slab for individuals and AOP.

Taxable IncomeTax Liability
Where the taxable income doesn’t exceed PKR 600,000/-PKR 0/-
Where the taxable income exceeds PKR 600,000/- but doesn’t exceed PKR 800,000/-5% of the amount exceeding PKR 600,000/-
Where the taxable income exceeds PKR 800,000/- but doesn’t exceed PKR 1,200,000/-PKR 10,000 + 12.5% of the amount exceeding PKR 800,000/-
Where the taxable income exceeds PKR 1,200,000/- but doesn’t exceed PKR 2,400,000/-PKR 60,000 + 17.5% of the amount exceeding PKR 1,200,000/-
Where the taxable income exceeds PKR 2,400,000/- but doesn’t exceed PKR 3,000,000/-PKR 270,000 + 22.5% of the amount exceeding PKR 2,400,000/-
Where the taxable income exceeds PKR 3,000,000/- but doesn’t exceed PKR 4,000,000/-PKR 405,000 + 27.5% of the amount exceeding PKR 3,000,000/-
Where the taxable income exceeds PKR 4,000,000/- but doesn’t exceed PKR 6,000,000/-PKR 680,000 + 32.5% of the amount exceeding PKR 4,000,000/-
Where the taxable income exceeds PKR 6,000,000/-PKR 1,330,000 + 35% of the amount exceeding PKR 6,000,000/-
Individuals & AOP Tax Slabs For Tax Year 2023

Tax Reduction In Behood Certificates

Currently profit from investment in Behbood savings certificates, pensioners benefit accounts, and Shuhada family welfare accounts are taxed at a maximum rate of 10%. In order to provide further relief to pensioners, it shall be taxed at a maximum rate of 5%.

Introduction Of FTR for Retailers

A fixed tax regime for small retailers (other than Tier-I retailers)is being proposed wherein tax will be collected along with electricity bills along with simplified registration and reporting regime. The proposed tax will range from Rs.3000 to Rs.10,000 and this will be a final discharge of tax liability.

Monthly Electricity Bill Tax
Not exceeding PKR 30,000/-PKR 3,000/-
Bill exceeding PKR 30,000/- but doesn’t PKR 50,000/-PKR 5,000/-
Bill exceeding PKR 50,000/- but doesn’t PKR 100,000/-PKR 10,000/-
Specified retailersPKR 50,000/-
Fixed Tax For Retailers

Advance (WHT) Tax On Educational Expenses

Another relief measure taken is withholding tax on educational expenses which is 5% of the amount exceeding PKR 200,000 annually. Now has been withdrawn the withholding tax on educational expense payments.

Tax On Property (Rental) income

Any person who has more than one immovable property exceeding Rs.25 million situated in Pakistan shall be deemed to have received rent equal to 5% of the fair market value of the immovable property and shall pay tax at the rate of 1% of the fair market value of the said property.

Exceptions: However, rental properties where calculated income tax is equal to or above as mentioned in this section, self-owned business premises are used for business activity, self-owned agricultural land used for agricultural activity (except farmhouse), Registered land development, and construction projects of builders.

Capital Gain & WHT Tax On Immovable Property

Capital gain in all classes of assets is now proposed to be taxed at 15% in case, the holding period of such property is one year or less. The capital gain payable on such assets will reduce to zero after a holding period of 6 years, reducing tax liability by 2.5 % with each subsequent year.

AssetsOpen Plots & Shares/SecuritiesConstructed PropertyFlats
Holding periodTax rateTax rateTax rate
Up to 1 year15%15%15%
Up to 2 year12.5%10%7.5%
Up to 3 year10%7.5%
Up to 4 year7.5%5%
Up to 5 year5%
Up to 6 year2.5%
Above 6 years
CGT Table for Immovable Assets & Stocks

Furthermore, the advance tax rate on the purchase and sale of property for filers is proposed to be enhanced to 2% from the current 1%. Moreover, in order to discourage the undocumented economy, the advance tax rate for buyers of immovable property who are non-filers is proposed to be enhanced to 5%.

Advance (WHT) Tax On Luxury Vehicles

Advance tax on motor vehicles exceeding 1600cc is proposed to be increased. Furthermore, advance tax shall also be collected at the rate of 2% of the value in cases of high-value hybrid and electric vehicles. Additionally, the rate of tax for nonfilers shall be enhanced to 200% from the current 100%.

Advance (WHT) Tax On International Card Payments

Advance withholding tax at the rate of 1% for filers and 2% for non-filers shall be collected from persons remitting money outside Pakistan through credit, debit, and prepaid cards. However, this tax shall be adjustable against tax liability.