The amended Finance Bill 2023 has introduced new income tax slabs for the salaried class, bringing changes to the tax rates that will come into effect from July 1, 2023. The Federal Board of Revenue (FBR) recently released the revised Finance Bill, outlining the updated tax brackets.
For individuals with an annual taxable income exceeding Rs. 2,400,000 but not exceeding Rs. 3,600,000, the applicable tax rate will be Rs. 165,000 plus 22.5% of the amount exceeding Rs. 2,400,000, according to the amended Finance Bill 2023.
There will be no changes in the income tax rates for salaried individuals with a taxable income exceeding Rs. 1,200,000 but not exceeding Rs. 2,400,000. The tax rate will remain at Rs. 15,000 plus 12.5% of the amount exceeding Rs. 1,200,000.
Under the new tax slab, individuals with a taxable income exceeding Rs. 3,600,000 but not exceeding Rs. 6,000,000 will face a tax rate of Rs. 405,000 plus 27.5% of the amount exceeding Rs. 3,600,000.
Moreover, the revised income tax slabs reveal that for individuals whose taxable income surpasses Rs. 6,000,000, the tax rate will be Rs. 1,095,000 plus 35% of the amount exceeding Rs. 6,000,000.
These new income tax slabs aim to streamline the tax system for the salaried class and ensure fair taxation based on income levels. Individuals falling within these income brackets will need to comply with the updated tax rates as per the amended Finance Bill 2023.
New income tax slabs for the salaried class
| Sr # | Taxable Income | Rate of Tax |
| 1. | Where the taxable income exceeds Rs. 2,400,000 but does not exceed Rs. 3,600,000 | 0% |
| 2. | Where taxable income exceeds Rs. 600,000 but does not exceed Rs. 1,200,000 | 2.5% of the amount exceeding Rs. 600,000 |
| 3. | Where taxable income exceeds Rs. 1,200,000 but does not exceed Rs. 2,400,000 | Rs. 15,000 + 12.5% of the amount exceeding Rs. 1,200,000 |
| 4. | Where the taxable income exceeds Rs. 3,600,000 but does not exceed Rs. 6,000,000 | Rs. 165,000 + 22.5% of the amount exceeding Rs. 2,400,000 |
| 5. | Where the taxable income exceeds Rs. 6,000,000 | Rs. 435,000 + 27.5% of the amount exceeding Rs. 3,600,000 |
| 6. | Where taxable income exceeds Rs. 6,000,000 | Rs. 1,095,000 + 35% of the amount exceeding Rs. 6,000,000 |
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