The tax rate on salary in Pakistan is given in the Division I Part I of the First Schedule of the Income Tax Ordinance, 2001:
Salary Income |
Rate |
Where the salary income=<600,000 | 0% |
1,200,000>=Salary income>600,000 | 5% of the amount>600,000 |
2,200,000>=Salary income>1200,000 | 30,000+15% of amount>1,200,000 |
3,200,000>=Salary income>2,200,000 | 180,000+25% of amount>2,200,000 |
4,100,000>=Salary income>3,200,000 | 430,000+30% of amount>3,200,000 |
Salary income>4,100,000 | 700,000+35% of amount>4,100,000 |
A withholding agent applies a tax rate on salary in Pakistan under Section 149 of the Income Tax Ordinance 2001 in accordance with the above-mentioned income tax rates on salary.
Q. How is tax calculated on salary in Pakistan?
Ans. The income tax on salary in Pakistan is calculated at the average rate of tax in accordance with the Division I Part I of the First Schedule of the Income Tax Ordinance, 2001.
Q. What is the Salary tax for 2023 in Pakistan?
Ans. The tax rate on salary in Pakistan exceeding Rs.600,000 ranges from 5% to 35% by the slabs prescribed in Division I Part I of the First Schedule of the Income Tax Ordinance, 2001.
Q. How much salary is exempt from income tax in Pakistan?
Ans. The salary income for a tax year is exempt from tax if it does not exceed Rs.600,000.
Q. How much tax do I pay on the salary income of Rs. 7.5 lakhs?
Ans. The tax on amount exceeding Rs. 600,000 (750,000-600,000=150,000) will be Rs.150,000*5%=Rs. 7,500
Q. How much tax do I pay on 20 lakhs?
Ans. The income tax on salary exceeding Rs.1200,000 (Rs.2000000-1200000=Rs.800,000) will be Rs.30,000+15%*800,000 = Rs.150,000
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