Pakistan

Updated FBR Income Tax Rates 2018-19 for Salaried Persons in Pakistan

Written by Abdul Hadi
(Last Updated On: 02/05/2018)

The Federal Government employees along with Defense Employees in the recent Budget 2018-19 have got a lot of benefits in which one of the most prominent was relief in tax on salary.

Government Employees often complain about the taxes on their salaries, but now this problem has been resolved for many government employees getting per month salary Rs. 100,000 or less or aggregate Rs. 1,200,000 per year. Now, these will be exempt from tax. That will also give these employees advantage of getting an additional payment that otherwise was being deducted as income tax from salary.

Here is the fresh Income Tax Rates Chart on Salary as proposed in the Budget 2018-19:

Income Tax Slabs 2018-19 Salaried Persons Finance Bill 2018 

1Up to Rs1,200,0000% tax
2Rs 1,200,000 to Rs2,400,0005% tax
3Rs 2,400,001 to Rs4,800,00010% tax
4Rs 4,800,001 and above15% tax

All of the above tax rates will effective from 1st July 2018, and the employees will get the real benefits in August against their salary of July 2018. This year is going to be best for government employees.

Tax System in Pakistan

Taxes are the main source of revenues for the government of modern ages. The government imposes taxes to collect revenue to run the government, to impose its policies, for fair distribution of wealth, and to administer the government is the best way.

Like other countries of the world, Pakistan has also a proper taxation system that is being regulated in the country according to Income Tax Ordinance, 2001, Sales Tax Act, 1990, Federal Excise Act, 2005, Custom Act, 1969, Capital Value Tax levied through Finance Act, 1989 and few others that are mostly in shape of amendments. Federal Government is the only body which is empowered to levy and collect the tax. After that, the constitution gives the power to the provincial government to legislate on taxes.

According to the Constitution of Pakistan, the Federal Government in Pakistan can impose the following taxes in the country.

  • Duties of customs, including export duties.
  • Duties of excise, including salt, but not including alcoholic liquors, opium or other narcotics;
  • Taxes on income other than agricultural income;
  • Taxes on corporations.
  • Taxes on the sales and purchases of goods imported, exported, produced, manufactured or consumed, except sales tax on services.
  • Taxes on the capital value of the assets, not including taxes on the immovable
  • Taxes on mineral oil, natural gas, and minerals for use in generation of nuclear energy.
  • Taxes and duties on the production capacity of any plant, machinery, undertaking, establishment or installation in lieu of any one or more of them.
  • Terminal taxes on goods or passengers carried by railway, sea or air; taxes on their fares and freights.

In addition to taxes mentioned above that are imposed by the Federation according to the Constitution of Pakistan, the following are the taxes that are levied by the provinces.

  • Agriculture income tax
  • Sales tax on services
  • Taxes on the transfer of immovable property
  • Professional tax
  • Tax on luxury houses
  • Tax on registration of luxury vehicles etc.
  • Property tax

About the author

Abdul Hadi

Author is a C.A and professional blogger who has been writing since ten years. He specializes on various topics including Business, Technology, News, and local reviews. Abdul graduated from Skans School of accountancy in 2014. He like to produce useful guides for local readers. He also writes for different newspapers and blogs. You can reach him on Facebook

70 Comments

  • per month salary 300,000
    per month salary 65,000
    per month salary 40,000
    per month salary 35,000
    per month salary 36,000
    Tax Calculation tell me and issuing 40000 ki 39917 deani hy

  • I want to know tax on commissions. I work in sales and support department for a software house. We are software, branding and website design and development and export it to US, UK, Middle East etc. My commission was PKR 100,000 and they deducted 15% (PKR 15,000) as tax. Is this right on software export sales for an agent how much is that.

  • i want to understand about INDIVIDUAL BUSINESS TAX SLAB

    IF YEARLY INCOME IS 2280000
    WHAT WILL BE THE CHARGEABLE TAX AMOUNT

  • Please let me know:

    1. Here you say that upto Rs. 1,2 million per year income has zero tax. Whereas official slabs are showing:

    Rs. 400,000 to 800,000 has Rs. 1,000 tax.
    Rs. 800,000 to 1,200,000 has 2000 tax
    Rs. 1,200,000 to 2,400,000 has 5% tax on the amount exceeding 1,200,000 and so on

    So please make correction or explain if there is really zero tax for income upto 1,200,000/- ?

    2. For tax purposes a Sole proprietor is considered and taxed as a company or an individual? Everyone is explaining things to Salaried persons, where does an individual sole proprietor stand?

    3. How much tax for an individual IT professional (Self employed – working as a sole proprietor business or individual)?

    4. If he does web development work and bring remittances from abroad either under his name or in his sole proprietor company account? Is he taxable or all his inbound money is tax exempted?

    5. If he owns a 120 sq. yard house in G. Johar (bought from mother for Rs. 11,000/- official value), is it taxable or needs to be declared? I heard upto only more than 250 sq.yard house is required to be declared and is taxable.

    6. Same is with old 1995 model car which is though 1300 cc but too old, does it need to be declared and is taxable?

    7. If an old time forex bank account has 6000+ balance (all foreign remittances), does it need to be declared and is taxable? I believe all remittances are tax exempted so no need to be declared either. Please explain.

    A point by point answer will be extremely appreciated and I will sincerely be grateful.

  • i want to know i am a salaried person and they are deducting tax on banking transactions. Due to this i want to get registered for fbr to avoid unnecessary taxes. But i dnt know how to do that. i already did registration and got password.

  • what will be the tax on rent being paid to us by a company for our house? The total rent paid by the company annually is 6,093,409 Pak Rupees. We are filler and so is the company

  • if salary is 40,000 monthly. he/ she will pay income tax?? if yes how much amount will be paid??
    According to budget of 2018-2019

    • sumaira,
      it is mentioned that from monthly salary Rs. 33,333 to Rs. 66,666 annual Tax liabillity is fixed as Rs. 1000 (per Month it will be Rs. 83)..

    • Monthly income tax will be amount Rs. 83/- only and Annual Income Tax will be amount Rs. 1000/- for the year 2018-2019

  • if salary per month is
    70000
    45000
    35000
    what would be tax rate
    i have found different calculations thats confusing !

    • If per month Salary is Rs. 70000 then Yearly tax would be Rs. 2000
      If per month Salary is Rs. 45000 then Yearly tax would be Rs. 1000
      If per month Salary is Rs. 35000 then Yearly tax would be Rs. 1000

      If you want to calculate on monthly basis then divide it by 12.

      Example:
      2000/12=166.67=167.00 per month
      1000/12=83.33=83.00 per month

  • 185000 x 12 = 2,220,000

    Less Exemption 1,200,000

    Taxable Income 1,020,000 x 5% = 51000 (This is Year’s Tax)

    Per Month Tax = 51000 / 12 = 4,250

    So his actual tax would be 4,250 per month. as per new tax slab

    • Thank you very much for this. Can you please share calculation of formula if monthly salary is Rs. 500,000/-

  • Father gifted his 3.5-Marla residential plot to his daughter. How much Taxes on the transfer of immovable property of 3,5-Marla residential plot is required to be paid?

  • What tax percentage on Services LAst Yeat is 10 Percent for filer, & 8% for Company registered but FY 2018-19 please guide me

      • @rizwan

        How? I think that is wrong!

        185000 x 12 = 2220000

        2220000 x 0.05 = 111000 (This is Year’s Tax)

        Per Month Tax = 111000 / 12 = 9250

        So his actual tax would be 9250 per month.

    • 185000 x 12 = 2,220,000

      Less Exemption 1,200,000

      Taxable Income 1,020,000 x 0.05 = 5100 (This is Year’s Tax)

      Per Month Tax = 5100 / 12 = 425

      So his actual tax would be 425 per month. as per new tax slab

      • 185000 x 12 = 2,220,000

        Less Exemption 1,200,000

        Taxable Income 1,020,000 x 5% = 51,000 (This is Year’s Tax)

        Per Month Tax = 51000 / 12 = 4,250

        So his actual tax would be 4,250 per month. as per new tax slab

      • 185000 x 12 = 2,220,000

        Less Exemption 1,200,000

        Taxable Income 1,020,000 x 5% = 51,000 (This is Year’s Tax)

        Per Month Tax = 51000 / 12 = 4,250

        So his actual tax would be 4,250 per month. as per new tax slab

  • the proposed amnesty is only for Government and defense employees only or for all private institutions too can any one help

    • Voluntary Declaration of Domestic Assets Act, 2018

      Application
      –Every company, association of persons and all citizens of Pakistan excepts holders of public office and their families
      –Undisclosed income and domestic assets held by the persons in Pakistan,
      Excepts where proceedings are pending in any court of law in respect of the
      Undisclosed income or domestic assets

      Period of Applicability
      Shall be made after the tenth day of April 2018 on or before the 30th June 2018 (extended upto 31st July 2018)

      Charge of Tax
      a)Foreign currency held in a foreign currency account in Pakistan2%
      As on 31st March 2018 and encashed in rupees
      b)Investment in Government Securities – Foreign Currencies2%
      c)Other Assets5%

      Other Assets
      oUndisclosed income – as declared
      oOpen plots and land – cost of acquisition or FBR value
      oSuper Structure – Rs. 400 per super feet
      oApartments and flats – cost of acquisition or Provincial
      stamp duty rates, whichever is higher
      oMotor Vehicles – acquired through by any means – Cost
      oSecurities and shares traded / not traded on stock exchange – Cost / Face
      oGovernment securities – Face value
      oGold – Rs. 4,000/- per gram
      oOther precious stones and metals – market rate as on 09.04.18
      oStock-in trade – market rate as on 09.04.18
      oPlant and machinery – actual cost of acquisition
      oAccounts receivable – actual cost of acquisition
      oOther assets – actual cost of acquisition
      oPrize bonds, cash and bank balances – bank accounts as of 09.04.18
      Face value for other assets

      Foreign Assets (Declaration and Repatriation) Act, 2018

      DescriptionRate

      1.Liquid assets not repatriated5%
      2.Immovable assets outside Pakistan3%
      3.Liquid assets repatriated and invested in
      Government securities upto 5 years in
      US dollars denominated bonds with2%
      Six monthly profit payment in equivalent
      Rupees (rate of return 3%) and payable
      On maturity in equivalent Rupees
      4.Liquid assets repatriated2%

  • If I have earned annual Salary 3,000,000 (30 Lac) then advise me weather I will pay income tax on whole 30 Lac amount or exempted Rs 1,200,000 (12 Lac)

  • a person earning 2450000 will have to pay 2400000 * 5% = 120000 and 50000 * 10 % = 5000 in total the tax would be 125000 on the amount of 2450000.

    thanks

    • no.. 2450000 me ist 1200000 pr koi tax nei, next 1200000 pr (1200000*5/100=) Rs.60,000, jab k next 50000 pr (50,000*10/100)= Rs. 5000 ho ga.
      so 2450000 pr total tax Rs. 65,000 liya jaey ga.

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