In this post we have updated the detailed information about the income tax in Pakistan and also shared the taxable income slabs, you can also calculate your income tax by using the income tax calculator and putting your annual salary.
The Federal Board of Revenue (FBR) is the tax-collecting agency in Pakistan responsible for implementing tax laws and collecting federal taxes, including income tax.
In Pakistan, income tax is a tax on an individual's or business's taxable income, which is determined based on the taxpayer's tax bracket, deductions, and exemptions. The FBR enforces tax compliance and pursues tax evaders through audits, investigations, and enforcement actions.
Income tax in Pakistan is calculated based on the taxpayer's taxable income, which is their total income minus any allowable deductions and exemptions.
The tax rate is progressive, meaning that higher earners pay a higher tax rate. The tax year in Pakistan runs from July 1 to June 30, and tax returns must be filed by the end of September each year.
Failing to pay income tax or filing an incorrect tax return can result in penalties and fines. The FBR has the authority to investigate tax evasion and prosecute taxpayers who intentionally avoid paying their tax obligations.
In addition to income tax, the FBR is also responsible for collecting other federal taxes, including sales tax, capital gains tax, and wealth tax.
A survey was carried out to identify the tax gaps, The tax gap report (2022) shows an approx. Rs 28 billion gap in income tax on salaried income and Rs 755 billion on non-salaried income. The FBR's 2022 tax gap analysis report estimated the corporate tax gap to be around Rs 395 billion in 2020-21.
The compliance gap in income tax stands at Rs 730 billion, or 31% of collectable income tax. Based on the Labour Force Survey, the FBR calculated the salaried class tax gap to be Rs 31 billion.
The HIES, with a sample size of 25,676 households and 116,499 individuals, was used to estimate the income gap using the latest survey data on the income and expenditure of individuals.
Check below the updated Income Tax Calculator, by using this Tax Calculator, you can find the income tax you must pay to the FBR.
Annual Salary Calculator
Annual Salary (including bonus):
This income tax calculator is designed as per the new tax slab for years 2023-2024 from the FBR ( Federal Board of Revenue).
Income Tax Calculator
Enter your income:
Tax amount:
Income Tax 2023 Tax Slabs
| axable Income | Rate of Tax |
|---|---|
| Up to Rs600,000 | 0% |
| Rs600,001 –1,200,000 | 2.5% of amount exceeding Rs600,000 |
| Rs1,200,001 –2,400,000 | Rs15,000 + 12.5% of amount exceeding Rs1,200,000 |
| Rs2,400,001 –3,600,000 | Rs165,000 + 20% of amount exceeding Rs2,400,000 |
| Rs3,600,001 –6,000,000 | Rs405,000 + 25% of amount exceeding Rs3,600,000 |
| Rs6,000,001 –12,000,000 | Rs1,005,000 + 32.5% of amount exceeding Rs6,000,000 |
| Amount exceeding Rs12,000,000 | Rs2,955,000 + 35% of amount exceeding Rs12,000,000 |
The economy of Pakistan has been facing challenges in recent years, including a high fiscal deficit, low growth rate, and increasing inflation. The country has also struggled with external imbalances, including a large trade deficit and a shortage of foreign currency reserves.
The government is proposing two new draft ordinances to impose Rs 200 billion in taxes, according to an official. This comes after the government agreed to the IMF's demands to restart a loan program.
The government is also considering ending the power sector subsidy and implementing sales tax on raw materials for the export sector, which could upset the PML-N's core voters in an election year. Additionally, there are plans for further increases in electricity and gas tariffs.
Please share your thoughts and comments in the comment section, on how can we further this FBR income tax calculator.
