Economy

Salaried Class to be burdened with Increased Income Tax

  • Introduction of additional slabs and increase taxes going to burden Salaried Class
  • Government expects additional revenue of Rs. 100 billion from Income Tax revision

According to Sources in the Ministry of Finance, The government is going to implement new measures to increase revenue from two areas — sales tax and income tax. As per the source, the Government is going to significantly revise the Tax Slabs for Income Tax Calculation effective from the Fiscal Year 2019-2020. According to FBR Estimates,  revision in income tax slabs is expected to bring in  Rs.100 billion to Rs. 120 billion in additional revenue for the Government.

The last Finance Minister of N-League Government, Miftah Ismail increased income tax exemption to Rs1.2 million from Rs0.4m and drastically reduced rates for all other incomes.

However, the Government is now going to significantly revise the slabs which is expected to put additional burden on the salaried class. Tax slabs are going to be increased to 10 from existing 6 slabs. The Income Tax Exemption will be provided to a person with an annual income up to Rs. 800,000.

The Income Tax on the First Slab is being drastically increased to Rs. 14,500 on a person earning Up to Rs. 1,400,00 per year. The Income Tax on Next slab is increased significantly to Rs. 79,500 for a person earning between Rs. 1,400,000 up to Rs. 1,500,000. Similarly, Income tax has been significantly increased across all the slabs. A Summary of Existing and New/Budgeted Income Tax regime is presented below for comparison purposes.

 

 

 

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