ISLAMABAD – The federal government has announced introducing new income tax return form in Pakistan from July 2025.
The announcement was made by Federal Finance Minister Muhammad Aurangzeb in his budget speech on Tuesday, the income tax return form has been simplified and made user friendly.
He said the existing 800-Colum return form will be replaced from July 1, 2025, adding that the filers will need to provide basic information about seven key items to file the returns.
He the simplified income tax return forms being introduced for salaried persons and small businessmen. The finance minister said people will no longer need assistance of a lawyer or tax expert to file the return.
Further details of the simplified return form will be updated here as soon as these are unveiled officially.
Income Tax Slabs 2025-26
Meanwhile, the federal government has proposed significant reductions in income tax rates and slabs.
The new measures aim to ease tax burden on middle and lower-income earners, in boost to economic growth and increase in income.
Under the proposed reforms, individuals earning up to 6Lac annually will see their tax rate slashed from 5% to just 1%. Those earning between 600,001 and 1,200,000 will benefit from the same reduction, lowering their tax liabilities.
For taxpayers earning up to 1.2 million, the minimum tax payable is set to decrease from less than 30,000 to approximately 6,000, providing immediate relief.
Higher income brackets also receive favorable adjustments, with the tax rate for earners between 2.2 million and 3.2 million PKR dropping from 25% to 23%. These changes are designed to promote fairness and incentivize compliance among higher earners.
Finance Minister [Name] stated, “Our goal is to make the tax system more equitable and supportive of the hardworking citizens of Pakistan. These reductions will boost consumer spending and stimulate economic activity across sectors.”
