ISLAMABAD: During the presentation of the Budget 2026-27 in the National Assembly, Finance Minister Muhammad Aurangzeb announced notable tax relief measures aimed at the salaried sector, including a substantial reduction in income tax rates across various income brackets.
The government stated that these adjustments are designed to provide financial relief to taxpayers facing ongoing inflation and increasing living expenses.
Updated Income Tax Rates for Salaried Individuals (Budget 2026-27):
* Annual income between Rs 2.2 million and Rs 3.2 million: tax rate lowered from 23% to 20%
* Annual income between Rs 3.2 million and Rs 4.1 million: tax rate decreased from 30% to 25%
* Annual income between Rs 4.1 million and Rs 5.6 million: tax rate reduced from 35% to 29%
* Annual income between Rs 5.6 million and Rs 7.0 million: tax rate cut from 35% to 32%
Officials explained that these revised slabs are part of a larger fiscal strategy to reduce the tax burden on middle-income earners, who have been significantly impacted by inflation and rising utility costs.
The new tax structure aims to enhance disposable income for the middle class and encourage better tax compliance through a more streamlined and equitable system.
The updates were announced as part of the federal budget presentation in the National Assembly.
