ISLAMABAD: The federal government has announced revised income tax slabs for salaried individuals and government employees under the Finance Bill 2026–27, introducing new rates that will take effect from July 1, 2026.
According to details approved by the National Assembly, individuals earning up to Rs600,000 annually will remain fully exempt from income tax under the new structure.
Whereas, individuals earning from Rs600,000 to Rs1.2 million will have to pay a 1 percent income tax, which would be the minimum rate to pay tax in the new slab.
Under the new tax regime, individuals earning Rs1.2 million to Rs2.2 million in a year will have to pay a flat tax of Rs6,000, in addition to 11 percent tax on the excess of the amount.
The individuals earning in the range of Rs2.2 million to Rs3.2 million will have to pay a flat tax of Rs116,000, plus 20 percent tax on additional income, against an earlier rate of 23 percent.
Moreover, the Finance Bill says individuals earning Rs3.2 million to Rs4.1 million in a year will have to pay a fixed tax of Rs346,000, plus 25 percent on income in excess of the bracket.
For individuals earning Rs4.1 million to Rs5.6 million per year, the rate of income tax will be Rs541,000 plus an additional 29 percent on the extra income earned. For individuals earning more than Rs5.6 million but less than Rs7 million per year, the rate of income tax will be Rs976,000 plus 32 percent on the extra income earned.
People who earn in excess of Rs7 million per year will have to pay the highest slab amounting to Rs1.424 million per annum plus 35 percent tax on the extra income earned.
It is being said that the newly revised tax slab structure is aimed at widening the tax base for Pakistan but at the same time, reducing the burden of taxes for low-income individuals by increasing the exemptions. But the new tax slabs will be heavily affected by the middle and upper-middle classes of salaried individuals.
The newly revised income tax slabs are set to take effect from July 1, 2026.
