ISLAMABAD – The federal government has revised income tax rates for salaried individuals as part of the federal budget for fiscal year 2026-27.
Finance Minister Muhammad Aurangzeb presented the Rs18.77 trillion federal budget in the National Assembly on Friday, outlining changes to income tax slabs aimed at providing relief to lower-income earners while adjusting rates for higher salary brackets.
Under the proposed tax structure, individuals earning up to Rs50,000 per month will continue to enjoy a complete income tax exemption.
The revised monthly income tax slabs are as follows:
Rs50,001 to Rs100,000: 1% tax on taxable income.
Rs100,001 to Rs183,333: Rs500 plus 11% of the amount exceeding Rs100,000.
Rs183,334 to Rs266,667: Rs9,667 plus 20% of the amount exceeding Rs183,333.
Rs266,668 to Rs341,667: Rs26,333 plus 25% of the amount exceeding Rs266,667.
Rs341,668 to Rs446,667: Rs45,083 plus 29% of the amount exceeding Rs341,667.
Rs446,668 to Rs583,333: Rs81,333 plus 32% of the amount exceeding Rs446,667.
Above Rs583,333: Rs118,667 plus 35% of the amount exceeding Rs583,333.
Tax on Rs100,000 Monthly Salary
Under the proposed budget, individuals earning Rs100,000 per month will pay income tax at the rate of 1%, resulting in a monthly tax liability of Rs1,000.
The new tax measures will take effect from July 2026 after parliamentary approval of the federal budget for FY2026-27.
