The federal government has introduced new income tax slabs for the salaried class in the Finance Bill 2025-26, offering relief to low-income earners while increasing the tax burden on high-income professionals and pensioners.
According to the bill approved by the National Assembly on Thursday, individuals earning up to Rs600,000 annually will remain exempt from income tax. However, those earning above this threshold will fall into progressive tax brackets, with rates increasing based on income levels.
Also Read: National Assembly approves budget 2025-26 by majority vote
Revised income tax slabs for salaried individuals
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Income up to Rs600,000/year
➤ 0% income tax (fully exempt) -
Income from Rs600,001 to Rs1,200,000/year
➤ 1% income tax on the amount exceeding Rs600,000 -
Income from Rs1,200,001 to Rs2,200,000/year
➤ Fixed tax: Rs6,000
➤ Plus 11% tax on the amount exceeding Rs1.2 million -
Income from Rs2,200,001 to Rs3,200,000/year
➤ Fixed tax: Rs116,000
➤ Plus 23% tax on the amount exceeding Rs2.2 million -
Income from Rs3,200,001 to Rs4,100,000/year
➤ Fixed tax: Rs346,000
➤ Plus 30% tax on the amount exceeding Rs3.2 million -
Income above Rs4,100,000/year
➤ Fixed tax: Rs616,000
➤ Plus 35% tax on the amount exceeding Rs4.1 million
Tax on high-value pensions
In a significant new measure, the Finance Bill 2025-26 also proposes a 5% income tax on pension receipts exceeding Rs10 million (Rs1 crore) per year.
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Pensioners receiving up to Rs10 million annually will remain exempt from tax. The move aims to bring high-income retirees into the tax net while preserving relief for average pensioners.
The National Assembly has approved the budget for the next financial year 2025-26.
The Finance Bill 2025 has been approved by a majority vote in the ongoing National Assembly session chaired by Speaker Sardar Ayaz Sadiq.
After the approval of the Finance Bill, the National Assembly session was adjourned until 11am tomorrow. During the session, clause-wise approval was given by a majority vote, while all the opposition’s cut motions were rejected.
