The Finance Act 2025-26 revised Pakistan's income tax structure to provide meaningful relief for salaried workers, particularly in the lower and middle income brackets. The new slabs are progressive — meaning you only pay the higher rate on the portion of income that falls within each bracket, not on your full salary.
| Annual Income (PKR) | Tax Rate | Fixed Amount |
|---|---|---|
| Up to 600,000 | 0% | — |
| 600,001 – 1,200,000 | 1% | on amount above 600k |
| 1,200,001 – 2,200,000 | 11% | + Rs 6,000 fixed |
| 2,200,001 – 3,200,000 | 23% | + Rs 116,000 fixed |
| 3,200,001 – 4,100,000 | 30% | + Rs 346,000 fixed |
| Above 4,100,000 | 35% | + Rs 616,000 fixed |
Source: Federal Board of Revenue (FBR), Finance Act 2025-26. A 9% surcharge applies to incomes above Rs 10 million.
Example 1 — Monthly salary Rs 80,000 (Annual: Rs 960,000)
Tax-free: Rs 600,000. Taxable portion: Rs 360,000 × 1% = Rs 3,600/year (Rs 300/month).
Example 2 — Monthly salary Rs 150,000 (Annual: Rs 1,800,000)
0% on first Rs 600,000. 1% on next Rs 600,000 = Rs 6,000. 11% on remaining Rs 600,000 = Rs 66,000. Total = Rs 72,000/year (Rs 6,000/month).
Example 3 — Monthly salary Rs 250,000 (Annual: Rs 3,000,000)
0% on Rs 600,000. 1% on Rs 600,000 = Rs 6,000. 11% on Rs 1,000,000 = Rs 110,000 + Rs 6,000 fixed. 23% on Rs 800,000 = Rs 184,000 + Rs 116,000 fixed. Total ≈ Rs 422,000/year (Rs 35,167/month).
Beyond income tax, your Active Taxpayer List (ATL) status affects withholding tax on dozens of daily transactions. Non-filers pay double the withholding rate on bank cash withdrawals, property purchases, car registrations, and more. Filing once makes all the difference.
Yes. Both salaried and non-salaried individuals earning up to Rs 600,000 annually pay zero income tax under the 2025-26 Finance Act.
For salaried individuals, the deadline is September 30, 2026. Business individuals may have a different date — check the FBR IRIS portal for your specific category.
Pension income is generally exempt for government employees up to a certain limit. Private sector pension plans have specific rules — consult an FBR-registered tax consultant for your situation.
A 10% exemption on basic salary is allowed for medical expenses. Any medical allowance above this threshold is included in taxable income.