Those individuals who have a salaried source of income and want to learn about which is the correct figure to enter in the Online tax calculator in order to arrive at tax payable or tax liability arising on your income, this article would discussed well about the figure is being taxed, also the tax slab rates for salaried individuals and how to compute tax on salary income.
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Tax on salary source of income is levied in u/s 149 of tax ordinance 2001 and subject to tax as per guidelines defined as per section of tax ordinance 2001, those individuals who are resident Pakistani earning from salary source of income should understand first division in the salary income.
A salary income depends upon a couple of factors which use to derive the final figure that an individual take to home including the following basic salary, Living allowance, Fuel allowance, Medical allowance, and other allowances provided to you, as per the nature of your job, But the Point is which amount is subject to Tax. Or on which final figure does an employee charge for income tax with the name of Withholding Tax on their salary income.
The applicable income tax section defined the gross salary figure which is used to calculate tax on salary, this amount doesn’t include any other additional bonuses or compensations you may receive as a reward upon your outstanding performance by your employer.
New Tax Rates For Salaried Individual
Federal GOVT. has previously announced relief measures for the salaried class by enhancing the exempt tax slabs from 0.6 Million to 1.2 Million. But they roll back the relief as they couldn’t convince IMF, Check out the revised Tax Slabs for 2023.
FY 2021-22 has defined the income tax slab rates for salary individuals in Pakistan, where if an individual is earning more than PKR 600,000/- per annum then a certain amount of income tax will be deducted from the salaries of individuals. In the previous 2018-19 salary tax slab rate was different as only PKR 400,000/- per annum is exempt from tax. Following are the latest tax slab rates in Pakistan for the fiscal year 2021-22.
Income Tax Slab Rates Fiscal year 2021-22
|Income up to PKR 600,000 : (Zero 0%)|
|PKR 600,001 to PKR 1,200,000 : (5% of the amount above 600,000)|
|PKR 1,200,001 to PKR 1,800,000 : (30,000 + 10% of the amount above 1,200,000)|
|PKR 1,800,001 to PKR 2,500,000 : (90,000 + 15% of the amount above 1,800,000)|
|PKR 2,500,001 to PKR 3,500,000 : (195,000 + 17.5% of the amount above 2,500,000)|
|PKR 3,500,001 to PKR 5,000,000 : (370,000 + 20% of the amount above 3,500,000)|
|PKR 5,000,001 to PKR 8,000,000 : (670,000 + 22.5% of the amount above 5,000,000)|
|PKR 8,000,001 to PKR 12,000,000 : (1,345,000 + 25% of the amount above 8,000,000)|
|PKR 12,000,001 to PKR 30,000,000 : (2,345,000 + 27.5% of the amount above 12,000,000)|
|PKR 30,000,001 to PKR 50,000,000 : (7,295,000 + 30% of the amount above 30,000,000)|
|PKR 50,000,001 to PKR 75,000,000 : (13,2950,000 + 32.5% of the amount above 50,000,000)|
|Above PKR 75,000,001 : (21,420,000 + 35% of the amount above 75,000,000)|
Being a salaried individual you should also learn about the available tax deductions and tax credits provided by the tax ordinance 2001 u/s 60, the following article describes well about the opportunity in terms of deductions in the Workers Welfare Fund, Zakkat, Educational Expenses, Profit on debt and Medical allowances.
Deductible Allowances For Salaried Individuals
How an salaried individual can get tax credits and deductions from their tax liability. A number of tax deductions are available on certain events.