ISLAMABAD (Eshfaq Mughal):- The new coalition government has proposed 32 percent income tax on over one million monthly income in new budget for upcoming fiscal year.

According to the new Finance Bill 2022-23, the government has introduced 7 slabs of income tax on salaried person.

The government has exempted the monthly salary up to Rs50,000 from income tax. The government will deducted lump sum Rs100 Where taxable monthly salary exceeds Rs. Rs50,000 but does not exceed Rs100,000 per month. 

Where the taxable monthly income exceeds 100,000 but does not exceed Rs.200,000 per month, the government will deduct 7% of the amount exceeding monthly income Rs. 100,000. per month   

Where taxable monthly income exceeds Rs200,000 per month, but does not exceed Rs300,000 per month, the government will get income tax Rs.7000 monthly + 12.5 percent of the amount exceeding Rs. 200,000.

Where taxable monthly income exceeds Rs.300,000 but does not exceed Rs.500,000 per month, the income tax will be deducted Rs.19500 per month + 17.5% of the amount exceeding Rs. 300,000. 

The government will deduct Rs.54500 per month + 22.5% of the amount exceeding Rs. 500,000  if taxable monthly income exceeds Rs.500,000 per month) but does not exceed Rs.Rs1,000,000). 

Where taxable monthly income exceeds Rs.Rs1,000,000, the government will deduct annually income tax Rs167000 per month+ 32.5% of the amount exceeding Rs. 12,000,000. Under the current rate, the person would have been paying Rs2,345,000 annually or Rs 195416 per month.

The government has also introduced three slabs for income tax rate on income of companies through finance bill 2023. 

According to the new finance bill, the government proposed income tax rate at 20 percent on income of small companies, 42 percent for banking companies and 29 percent for any other companies. 

While addressing in National Assembly, Finance Minister said that the basic threshold of taxable salary is proposed to be enhanced to Rs.1200 thousands from the current Rs.600 thousands for salaried
individuals.

“This would pass tens of billions of rupees benefit to salaried people and will generate a positive economic cycle whereby this money would get transferred to the businesses as the disposable income of salaried people increases therefore ultimately, the government will benefit through the thriving of the business, the creation of more jobs, and tax revenues in the future”, he further said.

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