ISLAMABAD – The federal government is planning to pass on relief to inflation-weary people, in taxes in the upcoming Budget 2025-26, with sources claiming special relief for salaried individuals.
The coalition government is considering major tax relief for low to middle-income people. Sources familiar with development told Pakistan Observer that taxable income for salaried employees is likely to be raised from Rs600,000 to Rs800,000 annually. The tax slabs are also expected to be revised, but only for lower-income groups.
Officials from Federal Board of Revenue revealed that three major proposals are under review to benefit salaried class. Among them is a plan to revise the first tax slab to accommodate those earning over Rs50,000 per month.
Officials hinted at relief for individuals earning up to Rs1 lac monthly, with possible adjustments in applicable tax rates.
Taxes in Budget 2025-26
| Annual Pension Income | Tax Rate |
|---|---|
| Up to 800,000 | 5% |
| 800,001 – 1,500,000 | 10% |
| 1,500,001 – 2,000,000 | 12.5% |
| 2,000,001 – 3,000,000 | 15% |
| Above 3 Million | 20% |
These proposals are still under preliminary review and will be finalized after consultation with key stakeholders and international partners.
The budget for FY 2025-26 is expected to be presented in June, and more details will emerge as the government finalizes its fiscal strategy amid economic challenges and global financial commitments.
The proposed relief will first be presented before the International Monetary Fund (IMF), as the country remains under an ongoing economic reform program.
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