Budget 23-2022: tax slabs in budget 2022-2023.
Government of Pakistan has presented the budget for the year 2022-2023, and the good news for the Government salary persons is that the government has reduced the tax rates for the salaried class and made new tax slabs in budget 2022-2023.
Finance Minister Muftah Ismail said that now people with an annual income of Rs 600,000 are still fully exempted, while those earning up to Rs 12 lakh will have to pay a nominal tax of Rs.100 per annum. He further states that new income tax slabs are announced in the financial budget 2022-2023.
In his speech, the finance minister did not provide details about the tax slabs, but said that the number of income tax slabs has been reduced from 12 to seven as per the finance bill passed by the cabinet.
The new income tax slabs for the salary persons in the budget 2022-2023 will be as under.
• The first slab includes persons whose salary is up to Rs. 600,000 per annum. No income tax is applicable on them.
• The second slab is about people whose annual income is more than 600,000 but up to 1.2 million. Such people will only have to pay an annual tax of Rs.100.
• The third slab is for those salaried persons whose annual income ranges from Rs.12,00,000/- to Rs.24,00000/- per year. The fixed income tax of 7% shall be applied whose income is more than 12,00,000/- per year.
• The fourth slab is for those whose annual salary from Rs.24,00,000/- to 36,00,000/- They will pay Rs.84000/- as fixed income tax and 12.5 & tax in case of above salary from Rs.24,000/-
• The fifth slab is for those with an annual income of Rs.36,00,000/- to Rs.60,00,000/-. They will pay fixed tax of Rs.2,34,000/- and 17% tax in case of his income more than 36,00,000/-.
• The sixth slab is for those with an annual income of Rs 6 million to Rs 12 million, who will now have to pay 654,000 fixed tax and 22.5 per cent tax on income over Rs 6 million.
• The seventh and final slab is for those whose annual income is more than 12 million, they will now have to pay 2 million four thousand fixed tax and 32.5 percent tax on income over 12 million.
Difference between the tax rates in the budge 2021-2022 and Financial Budge 2022-2023
• If your monthly income is fifty thousand rupees then you will not have to pay any income tax. However, if this income is up to one lakh rupees per month, then your annual income tax will be 100 rupees.
• In the past you had to pay a monthly tax of Rs. 7500 in case of Rs. 1.5 lakh per month.
• Those who earn Rs 200,000 a month used to have to pay a monthly tax of Rs 15,000, and now this amount has come down to Rs 7,000 a month.
• People with a monthly income of Rs 250,000 used to pay Rs 23,541 as monthly tax, now they will pay Rs 13,250 monthly income tax.
• People earning Rs 300,000 per month used to pay income tax of Rs 32,500 per month and now this amount will be reduced by Rs 13,000 and their monthly tax will be reduced to Rs 19,500.
• The monthly income tax of those earning Rs 3.5 lakh was Rs 42,500 in the past, which will now be reduced to Rs 28,250.
• People with a monthly income of Rs 4 lakh used to pay a monthly tax of Rs 52,500, now this amount will be reduced to Rs 37,000.
Talking about the change in the tax slab, tax experts say that the change in the income tax slabs in the budget 2022-2023 has brought relief to the low-income people especially for the salaried persons.
They also said that “less in the slab was actually one of the IMF’s conditions to rationalize taxes on high-income earners.”
They said that the current rate of inflation in the country would provide some relief to the low paid earners.
Definition is personal tax.
The IMF has called for reforms in personal income tax. Talking about personal income tax, an expert says that it means increasing the rate of income tax on the salaried class.
It is hoped that this budget 2022-2023 with new income tax slab will brought some soothing effects for the salaried persons.