FBR Releases Updated Tax Card for Salaried Workers for 2024-25

The Federal Board of Revenue (FBR) has launched a new tax card for salaried workers, aimed at providing tax relief and promoting a balanced tax structure for the 2024-25 tax year. This measure seeks to reduce the financial strain on low-income earners while ensuring a systematic tax approach for those with higher incomes.

Tax Exemption for Low-Income Earners

According to the FBR, individuals with annual earnings of up to Rs 600,000 are exempt from income tax. This exemption provides significant relief to low-income earners, ensuring they are not subject to any tax deductions on their income.

Tax Structure for Incomes Above Rs 600,000

For individuals earning more than Rs 600,000, the FBR has outlined the following tax brackets:

Rs 600,000 to Rs 1.2 million: A 5% tax applied on earnings within this range. For instance, those earning Rs 1 million annually will pay a tax of Rs 20,000 on the Rs 400,000 that exceeds the exemption limit.

Rs 1.2 million to Rs 2.2 million: A fixed tax of Rs 30,000 plus 15% on the amount exceeding Rs 1.2 million is applicable.

Rs 2.2 million to Rs 3.2 million: Individuals in this bracket will pay a fixed tax of Rs 180,000 plus 25% on any income exceeding Rs 2.2 million.

Rs 3.2 million to Rs 4.1 million: A fixed tax of Rs 430,000 plus 30% on the additional income above Rs 3.2 million is imposed.

Above Rs 4.1 million: Those earning over Rs 4.1 million annually will incur a fixed tax of Rs 700,000, with an additional 35% tax on any income exceeding Rs 4.1 million.

Employer’s Responsibility for Tax Deduction

The FBR has instructed all employers to make accurate tax deductions from salaries, aiding in the streamlining of the tax collection process. This measure ensures that the salaried class contributes to national revenue in an organized manner according to their income levels.

Aims of the New Tax Card

The updated tax card for 2024-25 is designed to provide relief to lower-income groups while establishing a fair and progressive tax system for higher-income earners.

With these adjustments, the FBR aims to balance revenue collection with offering financial relief to citizens.

For further information, individuals are encouraged to visit the official FBR website or consult their employers to learn how the new tax regulations affect their salaries.