Finance Minister Muhammad Aurangzeb presented the federal budget 2025-26 on Tuesday, outlining new income tax measures for the salaried class.
Addressing the budget session, the finance czar said that Prime Minister Shehbaz had made it a priority to support salaried individuals, who have long shouldered a disproportionate share of taxes.
In line with that, the government has proposed across-the-board cuts in income tax rates for the salaried class.
The biggest relief targets those making between Rs600,000 and Rs1.2 million a year. Their tax rate will drop sharply from 5% to just 1%, meaning someone earning Rs1.2 million would pay only Rs6,000 in tax, down from Rs30,000.
Taxpayers earning up to Rs2.2 million annually will also benefit, with the minimum rate reduced from 15% to 11%. The finance minister said similar cuts are being proposed for higher income brackets as well.
For those earning between Rs2.2 million and Rs3.2 million, the tax rate is expected to fall from 25% to 23%.
