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A closer look at Big Tax Rate Difference for Salaried Class in Pakistan vs India

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ISLAMABAD – People in Pakistan are paying record-high taxes, with salaried class bearing the brunt amid back-breaking inflation. Lately, the Pakistan Business Council (PBC) reported that salaried employees in Pakistan pay up to 9.4 times more in taxes than India, despite similar living costs.

It said a high tax burden in the country does not correspond with better value or equity in tax system.

Pakistan vs India Salary Taxes 2024

Monthly Salary (PKR) Annual Salary (PKR) Annual Salary (INR) Tax (PKR) Tax (INR) Difference (PKR)
50,000 600,000 180,180 No Tax No Tax 26,982
100,000 1,200,000 360,360 Rs30,000 60,000 720,721
150,000 1,800,000 540,540 Rs120,000 Rs12,000 1,081,081
200,000 2,400,000 720,720 Rs230,000 Rs22,000 1,441,441
250,000 3,000,000 900,900 Rs380,000 Rs40,000 1,801,802
300,000 3,600,000 1,081,080 Rs550,000 Rs62,000 2,162,162
400,000 4,800,000 1,441,440 Rs945,000 Rs128,000 2,522,523
500,000 6,000,000 1,801,800 Rs1365,000 Rs230,000 3,243,200
600,000 7,200,000 2,162,160 Rs1,785,000 Rs338,000 4,963,646
700,000 8,400,000 2,522,520 Rs2,205,000 Rs446,000 6,681,831
800,000 9,600,000 2,882,880 Rs2,625,000 Rs554,000 8,564,716
900,000 10,800,000 3,243,240 Rs3,349,500 Rs662,900 10,446,473

The recent stat shows that there is no tax for those earning Rs50,000 per month, while for higher salaries, like PKR 900,000 per month, the tax can exceed PKR 3,349,500 annually.

Consequently, the net annual salary decreases as taxes increase. For instance, a monthly salary of PKR 100,000 leaves a net annual salary of PKR 720,721, whereas a monthly salary of PKR 900,000 results in a net annual salary of PKR 10,446,473 after taxes.

For the unversed, India’s economy is much larger and growing faster than Pakistan’s, with a nominal GDP of $3.7 trillion compared to $400 billion. India has a higher per capita income, a diverse economy with major contributions from services, and attracts substantial foreign investment.

In contrast, Pakistan’s economy relies more on agriculture and manufacturing, experiences higher inflation and currency volatility, and faces challenges in infrastructure development and human development indicators.

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