Sunday, November 24, 2024

A Closer Look at Tax Slabs: Have They Been Altered in this Year’s Budget?

In a significant development, Finance Minister Ishaq Dar recently presented an expansionary budget proposal of Rs14.46 trillion for the fiscal year 2023-24. The budget aims to provide relief to the citizens of the country by implementing various measures and addressing the concerns raised by the salaried class.

One of the key highlights of the budget is the substantial raise in the salaries of government employees.

Tax Slabs Remain Unchanged

The coalition government has taken a prudent approach by avoiding any additional burden on the salaried class. As a result, no changes have been made to the existing tax slabs, which were approved in the Finance Bill of 2022. Let's take a closer look at the tax slabs:

  1. Income below Rs600,000 per year (Rs50,000 per month): No tax will be deducted.
  2. Income between Rs600,000 and Rs1.2 million per year (Rs50,000 to Rs100,000 per month): A tax of 2.5% will be applicable on the amount exceeding Rs600,000.
  3. Income between Rs1.2 million and Rs2.4 million per year (Rs100,000 to Rs200,000 per month): A tax of Rs15,000 plus 12.5% of the amount exceeding Rs1.2 million will be levied.
  4. Income between Rs2.4 million and Rs3.6 million per year (Rs200,000 to Rs300,000 per month): A tax of Rs165,000 plus 20% of the amount exceeding Rs2.4 million will be charged.
  5. Income between Rs3.6 million and Rs6 million per year (Rs300,000 to Rs500,000 per month): A tax of Rs405,000 plus 25% of the amount exceeding Rs3.6 million will be imposed.
  6. Income between Rs6 million and Rs12 million per year (Rs500,000 to Rs1,000,000 per month): A tax of Rs1.005 million plus 32.5% of the amount exceeding Rs6 million will be applicable.
  7. Income above Rs12 million per year (more than Rs1,000,000 per month): A tax of Rs2.955 million plus 35% of the amount exceeding Rs12 million will be charged.

if you want to calculate your income tax you can use our income tax calculator

income tax slabs

Relief Measures in Budget 2023-24

Considering the unprecedented high inflation that the country is facing, the coalition government has proposed several relief measures in the budget. The basic pay scales of federal government employees in BPS 1 to 16 will receive an ad hoc raise of 35%, while those in BPS 17 and above will receive a 30% increase.

Additionally, pensioners will also benefit from a 17.5% raise in their pensions.

To address the issue of minimum wage, the government has increased it from Rs25,000 to Rs32,000 per month. Furthermore, the EOBI (Employees Old-Age Benefits Institution) pension has been raised to Rs10,000 from Rs8,500, providing further assistance to retired individuals.

The budget also introduces several enhancements in allowances and benefits for federal government employees. The mileage allowance has been increased by 50%, while the additional charge, current charge, and deputation allowance have been raised from Rs12,000 to Rs18,000.

The orderly allowance has been enhanced to Rs25,000 from Rs17,500, benefiting the eligible employees. Moreover, the special conveyance allowance for disabled individuals will witness a 100% increase, raising the amount from Rs2,000 to Rs4,000.

The budget proposal also includes improvements in allowances for military personnel. The constant attendant allowance for the military has been increased to Rs14,000 from Rs7,000, recognizing the contributions and needs of our brave soldiers.

Furthermore, the House Building Finance Corporation (HBFC) scheme has been introduced to support indebted widows. Under this scheme, the government will pay HBFC loans to widows up to one million rupees, providing them with financial assistance and relief.

In addition to these measures, the deposit limit in the martyrs' accounts at CDNS has been enhanced to Rs7.5 million from Rs5 million. Similarly, the deposit limit on Behbood Saving Certificates has also been raised to Rs7.5 million, further promoting savings and investment.

The expansionary budget proposal for the fiscal year 2023-24, presented by Finance Minister Ishaq Dar, reflects the government's commitment to providing relief and support to the citizens of the country.

The significant raise in the salaries of government employees, along with various relief measures, demonstrates the government's focus on addressing the concerns of the salaried class and vulnerable segments of society. These steps will contribute to alleviating financial burdens and improving the overall economic well-being of the nation

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