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Pakistan comes up with new income tax slabs

Internews Report

ISLAMABAD: Pakistan’s Federal Board of Revenue (FBR) has accepted income tax slabs and rates proposed by the Senate Standing Committee on Finance for the new financial year 2010-11, which begins next month.

tax_slab

The income tax slabs and rates proposed by the Senate Standing Committee on Finance seek to apply higher tax rates on higher incomes instead of middle level incomes in the upcoming fiscal year 2010-11, official sources said Sunday.

After reviewing the budget proposals contained in the Finance Bill, 2010, Senators Khurshid Ahmed, Ibrahim Khan and Afia Zia had proposed to the revised slabs of the applicability of income tax on income during 2010-11.

FBR Chairman Sohail Ahmed has conveyed to the members of the committee that there would be no negative revenue implications of the proposal and FBR will not have any objection to accept these slabs and income tax rates for 2010-11.

According to income tax slabs and rates proposed by the senators, when taxable income does not exceed Rs300,000 there would be no tax or income up to Rs300,000 would remain exempted from the income tax. The Senate body has proposed that where the taxable income exceeds Rs300,000 but does not exceed Rs500,000 income tax rate of 7.5 per cent should be applicable on it.

When the taxable income exceeds Rs500,000 but does not exceed Rs750,000 the income tax rate should be 10 per cent. Where the taxable income exceeds Rs750,000 but does not exceed Rs1 million income tax should be charged at 12.5 per cent on such income.

Where the taxable income exceeds Rs1 million but does not exceed Rs1.5 million the income tax rate should be 15 per cent on this income. When the taxable income exceeds Rs1.5 million the income tax rate should be fixed at 25 per cent on such income.

Earlier in the Finance Bill, 2010, the FBR had proposed the following income slabs and income tax rates applicable thereon. When the taxable income does not exceed Rs300,000 no tax would be applicable. Where the taxable income exceeds Rs300,000 but does not exceed Rs400,000 income tax rate of 7.50 per cent should be applicable on it.

When the taxable income exceeds Rs400,000 but does not exceed Rs500,000 the income tax rate should be 10 per cent. Where the taxable income exceeds Rs500,000 but does not exceed Rs600,000 income tax should be charged at 12.5 per cent on such income.

Where the taxable income exceeds Rs600, 000 but does not exceed Rs800,000 income tax rate should be 15 per cent. Where the taxable income exceeds Rs800,000 but does not exceed Rs1 million the income tax rate should be 17.50 per cent.

Where the taxable income exceeds Rs1 million but does not exceed Rs1.3 million, 21 per cent income tax would be applicable on this level of income. The highest slab of income proposed by the FBR in the Finance Bill, 2010 was eyeing 25 per cent income tax on income, which exceeds Rs1.3 million.

According to the procedure, amendments proposed in the Finance Bill, 2010 prepared by the Senate Standing Committee on Finance would be placed at first stage in the Senate of Pakistan and upon approval of these recommendations, these would be tabled in the National Assembly for approval and incorporation in the Finance Bill, 2010.

In case the National Assembly accepts these proposals, Federal Minister for Finance Dr Hafeez Sheikh would announce formal acceptance of these recommendations in his budget windup speech expected in last week of June 2010.

9 comments

  1. i think there should be a releif in the income tax to the salaried persons and the tax should be on the gross salary for example in the profession of sales and marketing an amount is given as a daily allowance which is spended during working in the markets which is basically an expense not an income but income tax is also imposed on these expenses i think this is not a justification

  2. Non-sense government.

  3. The income tax on salaries is totaly unjustified because we the slaried persons already paying the sales tax on Electricity bill, Gas bill, Telephone bill, Petrol, CNG, travlings and on each and every items we purchase in the Markets.

  4. kindly send the final salary slab of 2010-2011

  5. Its all about our Govt………..

  6. Salam Sir,

    itis submitted that I want to down load the slab of 2010-11 Pl guide me.

  7. I am sure that the new tax slab is unjustified and at very high side. The benefit of exemption from 200,000/= to 300,000/= has become useless due to enhance of new slab rate. Govt must consider it and bring it to rational level in order to provide real and true benefits to the salaried person.

    ghazali imam

  8. I am amazed,in Paksitan, there are many Ordinance and Acts but we are not progressing and we are declining day by day. Now, the question is why it is happening with us? The answer is very simple that we are not sincere with our nation. People of our country are very mean/selfish because Everyone is thinking only their benifit.No one wants to raise voice against the wrong policies adopted by our governments(past as well as current). Therefore, all of us will have to face unjustified tax system adopted by Govt. of Pakistan.

    I have very simple suggestion, if our Govt. declares that from onward there will be no income tax and it will collect only Zakat(Which is 2.5 % of the total value of things which remain idle during the year and not in use by a person).I hope that many people would like to give Zakat considering that this is Farz by our religion.Presently, many people avoid to give Zakat and incometax because they feal that that Govt. is snatching their money throug these means.When the people will be sure that they have to only pay Zakat and there will be no income tax they would definitely perform there religon duty.

    Finally, i think that in presence of Zakat there should be no Inocme tax.

  9. you can use the following url to calculate tax liability for salaried individual in Pakistan (Monthly Basis):

    http://asim.zxq.net

    It also calculates tax based on marginal tax relief rates.

    This small tool is developed by one of our class mate in IBA.

    Regards,
    Shahzad Raza

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