Changes in the Finance Act 2018’s Income Tax Ordinance have been approved. The amendments were introduced by the federal government. They have been approved by the federal cabinet in a meeting, headed by the Prime Minister (PM)—Imran Khan yesterday.
As per the approved changes in the act, the burden of taxable income has been lessened for the salaried employees. For a yearly salary of 0.4 million rupees, no taxes would be applicable, while for rupees four lac to rupees eight lac annual salary, the tax of rupees thousand would be applied.
According to the new amendment, for the individuals who earn rupees eight lac million to rupees twelve lac million annual income, would have to pay rupees two thousand tax. In the meantime, for the ones who earn from Rs 1.2 million to 2.4 million rupees, for them, five per cent extra tax would be applied.
For the ones who earn Rs 2.4 million to Rs4.8 million rupees, tax applicable on them would be rupees sixty thousand and ten per cent additional tax would be applied. For the ones who earn more than Rs4.8 million annually, a fixed tax amount of rupees three lac is payable in addition to fifteen per cent of the salary amount which is above this defined limit.
The tax rate applied to small firms has also been lessened even furthermore. Beginning from 2018, the tax rate charged would be decreased by one per cent annually, which would make it twenty-five per cent for 2018, down to twenty per cent from 2023 and onwards, according to the Federal Board of Revenue.