The federal government has proposed an exemption from income tax for anyone making up to Rs50,000 per month in the proposed budget for the fiscal year 2023–24. Therefore, people who make money in this range will not be subject to income tax.
The government has updated tax rates for the salaried class depending on income levels. A tax rate of 2.5 percent would apply to anyone earning between Rs50,000 and Rs100,000 per month on any sum over Rs600,000 per year.
The tax rate for persons making between Rs. 100,000 and Rs. 200,000 per month is Rs. 15,000 per year plus 12.5% of the amount exceeding Rs. 1.2 million.
The tax rate for those making between Rs200,000 and Rs300,000 per month is Rs165,000 per year plus 20% of the amount beyond Rs2.4 million.
The tax rate for those making between Rs300,000 and Rs500,000 per month is Rs405,000 annually + 25% of earnings beyond Rs3.6 million.
A tax rate of Rs1.005 million per year, or 32.5 percent, would be applied to anyone who make between Rs500,000 and Rs1 million per month.
The tax rate for those making more than a million rupees per month is Rs2.955 million per year with an additional 35 percent on earnings exceeding Rs12 million.
These tax rate changes are intended to address the financial difficulties encountered by people with high incomes amid the continuing crisis. It is essential to remember that these suggestions are included in the budget and are thus up for approval and execution.