Income tax is a crucial source of revenue for the government of Pakistan. The Federal Board of Revenue (FBR) collects income tax from individuals and businesses in the country. This article will provide an overview of the FBR income tax slabs, including their purpose, rates, and exemptions.
Purpose of FBR Income Tax Slabs
The FBR income tax slabs are designed to ensure that the tax burden is distributed fairly among individuals based on their income level. The tax slabs provide a progressive taxation system, where individuals with higher incomes are taxed at a higher rate than those with lower incomes.
FBR Income Tax Slabs
The FBR income tax slabs are divided into different categories based on an individual’s income level. In addition to income slabs, you can calculate your tax using the tax calculator tool. The following is a breakdown of the FBR income tax slabs for the tax year 2022:
|
Taxable Income |
Rate of Tax |
|
Up to Rs600,000 |
0% |
|
Rs600,001 –1,200,000 |
2.5% of the amount exceeding Rs600,000 |
|
Rs1,200,001 –2,400,000 |
Rs15,000 + 12.5% of the amount exceeding Rs1,200,000 |
|
Rs2,400,001 –3,600,000 |
Rs165,000 + 20% of the amount exceeding Rs2,400,000 |
|
Rs3,600,001 –6,000,000 |
Rs405,000 + 25% of the amount exceeding Rs3,600,000 |
|
Rs6,000,001 –12,000,000 |
Rs1,005,000 + 32.5% of the amount exceeding Rs6,000,000 |
|
Amount exceeding Rs12,000,000 |
Rs2,955,000 + 35% of the amount exceeding Rs12,000,000 |
Exemptions from FBR Income Tax
The FBR provides some exemptions from income tax for specific individuals and transactions. The following individuals and transactions are exempt from income tax:
- Senior citizens aged 60 years or above
- Widows, orphans, and disabled individuals
- Income from agriculture
- Income from dividends
- Income from overseas remittances
It is important to note that while these individuals and transactions are exempt from income tax, they may still be required to file income tax returns with the FBR.
Conclusion
The FBR income tax slabs are an essential tool for the government of Pakistan to ensure that the tax burden is distributed fairly among individuals based on their income level. The tax slabs provide a progressive taxation system where individuals with higher incomes are taxed more than those with lower incomes. The FBR income slabs for the tax year 2022 range from no tax on income up to Rs. 1,200,000 to a maximum tax rate of 20% on income above Rs. 10,000,000. Specific individuals and transactions are exempt from income tax but may still be required to file income tax returns with the FBR. Individuals need to understand the FBR income tax slabs to ensure compliance with taxation laws in Pakistan.