Early this week, the Federal Board of Revenue (FBR) announced a significant tax exemption for salaried employees earning up to Rs600,000 per annum. This move is aimed at reducing the tax burden on low-income earners and providing them with some much-needed relief.
According to the FBR’s tax card for the tax year 2024-25, individuals earning a salary of up to Rs50,000 per month will not have to pay any income tax. This means that employees earning up to Rs600,000 per annum will be exempt from paying income tax.
However, employees earning above Rs600,000 per annum will have to pay a 5% income tax. Additionally, fixed tax rates ranging from Rs20,000 to Rs700,000 have been imposed on various income brackets. For instance, employees earning an annual salary of Rs1 million will have to pay a fixed tax of Rs20,000, while those earning above Rs4.1 million will have to pay a fixed tax of Rs700,000.
Moreover, additional income tax rates ranging from 15% to 35% have been imposed on income above specific thresholds. For example, employees earning above Rs1.2 million will have to pay an additional 15% income tax, while those earning above Rs4.1 million will have to pay an additional 35% income tax.
The FBR has also clarified that employers will be responsible for deducting applicable taxes before paying salaries. This move is expected to streamline the tax collection process and ensure that employees are not burdened with excessive tax deductions.
The tax exemption announced by the FBR is a welcome move for low-income earners who have been struggling to make ends meet. With the rising cost of living and inflation, it has become increasingly difficult for individuals to manage their finances. The tax exemption will provide some much-needed relief to these individuals and help them to better manage their finances.
However, some experts have expressed concerns that the tax exemption may not be enough to provide significant relief to low-income earners. They argue that the exemption threshold of Rs600,000 is too low and that many employees may still be required to pay income tax.
Despite these concerns, the FBR’s move is a step in the right direction. It shows that the government is committed to providing relief to low-income earners and reducing the tax burden on them. However, more needs to be done to ensure that the tax system is fair and equitable for all.
In conclusion, the FBR’s tax exemption for salaried employees earning up to Rs600,000 per annum is a welcome move that will provide relief to low-income earners. However, more needs to be done to ensure that the tax system is fair and equitable for all.
#FBR #TaxExemption #SalariedEmployees #LowIncomeRelief #TaxCard2024-25
