Revised Income Tax Slabs for Those earning Rs50,000 and Rs1Lac per month

Tax Hike for Middle, High Incomes Sparks Debate Among Professionals

By DTD- On Jun 28, 2025

ISLAMABAD – Pakistani government made changes to the income tax structure for salaried individuals under revised Finance Bill for the fiscal year 2025–26, offering relief to low-income earners while imposing higher taxes on high-income brackets.

Ministry of Finance approved changes and individuals earning up to Rs. 600,000 annually will now be exempt from income tax, providing a much-needed cushion to the lower-income segment amid rising inflation.

Revised Tax Slabs in Budget 2025

Individuals earning up to Rs. 600,000 annually are fully exempt from income tax. For those earning between Rs. 600,001 and Rs. 1.2 million, a 1% tax applies only on the amount exceeding Rs. 600,000. Income between Rs. 1.2 million and Rs. 2.2 million is subject to a fixed tax of Rs. 6,000, plus 11% tax on the amount above Rs. 1.2 million.

Annual Income Range	Fixed Tax	Tax Rate
Up to 600,000	0	0%
600,001 – 1,200,000	0	1%
1,200,001 – 2,200,000	6,000	11%
2,200,001 – 3,200,000	116,000	23%
3,200,001 – 4,100,000	346,000	30%
Above 4,100,000	616,000	35%

For Rs2.2 million to Rs. 3.2 million range, a fixed tax of Rs. 116,000 is charged, along with 23% tax on income exceeding Rs. 2.2 million. Salaries between Rs. 3.2 million and Rs. 4.1 million face a fixed tax of Rs. 346,000 plus 30% on the amount above Rs. 3.2 million.

Those earning over Rs. 4.1 million annually are required to pay a fixed tax of Rs. 616,000 along with a 35% tax on the amount exceeding Rs. 4.1 million. This new structure aims to ease the burden on low-income earners while increasing contributions from higher-income individuals.

Economic analysts view the move as a progressive step to widen the tax net and increase revenue collection, particularly from higher earners. However, the steep rise in tax rates for middle- and high-income brackets has sparked debate among professionals and salaried employees, with many calling for a more balanced approach.