As per Lawkidunya, Here are the rules for tax on salary in Pakistan:
Tax Rates
Tax rates for salaried individuals in Pakistan vary based on their income brackets:
1. Up to PKR 600,000: 0%
2. PKR 600,001 – PKR 1,200,000: 5% of the amount exceeding PKR 600,000
3. PKR 1,200,001 – PKR 2,200,000: PKR 30,000 + 15% of the amount exceeding PKR 1,200,000
4. PKR 2,200,001 – PKR 3,200,000: PKR 180,000 + 25% of the amount exceeding PKR 2,200,000
5. PKR 3,200,001 – PKR 4,100,000: PKR 430,000 + 30% of the amount exceeding PKR 3,200,000
6. PKR 4,100,001 and above: PKR 700,000 + 35% of the amount exceeding PKR 4,100,000
Tax Deductions on Salary in Pakistan
The following tax deductions are allowed:
1. Conveyance allowance: Up to PKR 10,000 per month
2. Medical allowance: Up to PKR 10,000 per month
3. Telephone allowance: Up to PKR 5,000 per month
4. Utility bills: Up to PKR 10,000 per month
5. Education expenses: Up to PKR 60,000 per annum for children’s education
6. Charitable donations: Up to 30% of taxable income
Tax Exemptions on Salary in Pakistan
The following tax exemptions are allowed:
1. Basic exemption: The first PKR 600,000 of taxable income is exempt from tax
2. Pension income: Pension income is exempt from tax up to PKR 500,000
3. Gratuity: Gratuity received by an employee on retirement or termination is exempt from tax up to PKR 500,000
4. Leave encashment: Leave encashment received by an employee on retirement or termination is exempt from tax up to PKR 500,000
Filing Requirements
Salaried individuals are required to file their tax returns by:
1. September 30th: For individuals with taxable income up to PKR 1,200,000
2. December 31st: For individuals with taxable income exceeding PKR 1,200,000
Penalties For Non-payment of Tax
Penalties for late filing or non-payment of tax include:
1. Late filing fee: PKR 20,000 to PKR 50,000
2. Additional tax: 1% per month or part of a month on the tax payable
Please note that these rules are subject to change, and individual circumstances may affect the actual tax liability. It’s essential to consult a tax professional or the Federal Board of Revenue (FBR) website for accurate and personalized tax advice.