Budget 2025-26: Govt Gives Income Tax 'Relief' to Salaried Workers

The new income tax slabs for the salaried class under the federal budget 2025-26 revealed that a smaller rate of income tax would now be applicable from July 1, 2025, where annual taxable income exceeds Rs. 600,000, high-level sources informed ProPakistani.

In the new federal budget 2025-26, where taxable income is between Rs. 600,000 but does not exceed Rs. 1,200,000, the rate of tax would be 1 percent.

For individuals earning up to Rs. 600,000, there is no change, as this bracket remains tax-free. This exemption ensures that the lower-income segment is not burdened with additional taxes.

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In the income range of Rs. 1,200,000 to Rs. 2,200,000, the tax rate has been decreased to 11 percent of the amount exceeding Rs. 1,200,000.

Sr #	Taxable Income	Rate of Tax
1.	Where taxable income does not exceed Rs. 600,000	0%
2.	Where taxable income exceeds Rs. 600,000 But does not exceed Rs. 1,200,000	1% of the amount exceeding Rs. 600,000
3.	Where taxable income exceeds Rs. 1,200,000 But does not exceed Rs. 2,200,000	Rs. 6,000 + 11% of the amount exceeding Rs. 1,200,000
4.	Where taxable income exceeds Rs. 2,200,000 But does not exceed Rs. 3,200,000	Rs. 116,000 + 23% of the amount exceeding Rs. 2,200,000
5.	Where taxable income exceeds Rs. 3,200,000 But does not exceed Rs. 4,100,000	Rs. 346,000 + 30% of the amount exceeding Rs. 3,200,000
6.	Where taxable income exceeds Rs. 4,100,000	Rs. 616,000 + 35% of the amount exceeding Rs. 4,100,000

The following table gives a detailed breakdown of the impact of the rate of income tax on salaried class from July 1, 2025:

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Jehangir Nasir

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For reference, here is the existing tax slabs for 2024-2025

Where the taxable salary income does not exceed Rs. 600,000, the rate of income tax is 0%.
Where the taxable salary income exceeds Rs. 600,000 but does not exceed Rs. 1,200,000, the rate of income tax is 5% of the amount exceeding Rs. 600,000.
Where the taxable salary income exceeds Rs. 1,200,000 but does not exceed Rs. 2,200,000, the rate of income tax is Rs. 30,000 + 15% of the amount exceeding Rs. 1,200,000.
Where the taxable salary income exceeds Rs. 2,200,000 but does not exceed Rs. 3,200,000, the rate of income tax is Rs. 180,000 + 25% of the amount exceeding Rs. 2,200,000.
Where the taxable salary income exceeds Rs. 3,200,000 but does not exceed Rs. 4,100,000, the rate of income tax is Rs. 430,000 + 30% of the amount exceeding Rs. 3,200,000.
Where the taxable salary income exceeds Rs. 4,100,000, the rate of income tax is Rs. 700,000 + 35% of the amount exceeding Rs. 4,100,000.