The President of Pakistan, Dr. Arif Alvi signed the Finance Bill 2019-20 on Monday, July 01, 2019. With the President’s signature, the Finance Bill 2019-20 has come to force and published on the Federal Board of Revenue (fbr)’s website as Finance Act, 2019.
The tax rates for salaried individuals are mentioned in the First Schedule, Part I, Division I of the Income Tax Ordinance, 2001. According to the Finance Act, 2019 (Pages 191-192):
Where the income of an individual chargeable under the head “salary” exceeds seventy-five per cent of his taxable income, the rates of tax to be applied shall be as set out in the following Table
Rates of Tax for Salaried Individuals
Tax Year 2020 (From July 01, 2019 to June 30, 2020)
| S. No | Taxable Income | Rate of Tax |
|---|---|---|
| (1) | (2) | (3) |
| 1. | Where taxable income does not exceed Rs. 600,000 | 0% |
| 2. | Where taxable income exceeds Rs. 600,000 but does not exceed Rs. 1,200,000 | 5% of the amount exceeding Rs. 600,000 |
| 3. | Where taxable income exceeds Rs. 1,200,000 but does not exceed Rs. 1,800,000 | Rs. 30,000 plus 10% of the amount exceeding Rs. 1,200,000 |
| 4. | Where taxable income exceeds Rs. 1,800,000 but does not exceed Rs. 2,500,000 | Rs. 90,000 plus 15% of the amount exceeding Rs. 1,800,000 |
| 5. | Where taxable income exceeds Rs. 2,500,000 but does not exceed Rs. 3,500,000 | Rs. 195,000 plus 17.5% of the amount exceeding Rs. 2,500,000 |
| 6. | Where taxable income exceeds Rs. 3,500,000 but does not exceed Rs. 5,000,000 | Rs. 370,000 plus 20% of the amount exceeding Rs. 3,500,000 |
| 7. | Where taxable income exceeds Rs. 5,000,000 but does not exceed Rs. 8,000,000 | Rs. 670,000 plus 22.5% of the amount exceeding Rs. 5,000,000 |
| 8. | Where taxable income exceeds Rs. 8,000,000 but does not exceed Rs. 12,000,000 | Rs. 1,345,000 plus 25% of the amount exceeding Rs. 8,000,000 |
| 9. | Where taxable income exceeds Rs. 12,000,000 but does not exceed Rs.30,000,000 | Rs. 2,345,000 plus 27.5% of the amount exceeding Rs. 12,000,000 |
| 10. | Where taxable income exceeds Rs. 30,000,000 but does not exceed Rs.50,000,000 | Rs. 7,295,000 plus 30% of the amount exceeding Rs. 30,000,000 |
| 11. | Where taxable income exceeds Rs. 50,000,000 but does not exceed Rs.75,000,000 | Rs. 13,295,000 plus 32.5% of the amount exceeding Rs. 50,000,000 |
| 12. | Where taxable income exceeds Rs.75,000,000 | Rs. 21,420,000 plus 35% of the amount exceeding Rs. 75,000,000 |
The complete finance act is available on fbr’s website at the following link (Pages 191-192):
http://download1.fbr.gov.pk/Docs/201972167269120FinanceAct,2019.pdf
You can also view tax rates in Income Tax Ordinance, 2001 Amended Upto 30.06.2020 at the following link (Pages 410-411):
https://www.fbr.gov.pk/Categ/Income-Tax-Ordinance/326