Pakistan’s salaried class gains substantial salaried tax relief Pakistan measures in Budget 2025-26, with higher exemptions and lower rates. These changes provide crucial financial breathing room for employees across income levels. This analysis details all key reforms and their real-world impact on take-home salaries.
1. Major Salaried Tax Relief Pakistan: Key Changes
The government has approved three landmark reforms for salaried tax relief:
- Tax-free threshold doubled to PKR 1.2 million annually
- Across-the-board rate reductions in all tax slabs
- Enhanced deductions for medical and housing expenses
2. New Tax Brackets for Salaried Professionals
Budget 2025-26 delivers relief through revised progressive taxation:
| Annual Income (PKR) | New Tax Rate | Reduction |
|---|---|---|
| 1.2M – 2.4M | 2.5% | 50% cut |
| 2.4M – 4.8M | 10% | 33% cut |
| 4.8M – 12M | 20% | 20% cut |
| Above 12M | 30% | 14% cut |
3. Additional Benefits in Salaried Tax Package
This package includes:
✅ Increased medical expense deductions (PKR 250,000)
✅ Higher house rent allowance exemptions (50%)
✅ Special provisions for IT and export sector employees
4. Implementation of Tax Relief Measures
The tax relief reforms take effect:
- July 2025 for new fiscal year
- August 2025 salary payments
- Tax returns due September 2026
5. Calculating Your Personal Tax Savings
What middle-income professional gain:
- PKR 300,000/month salary saves PKR 180,000 annually
- PKR 500,000/month salary saves PKR 300,000 annually
- PKR 1M+/month salaries save 10-14% in taxes
Final Assessment of Salaried Tax Relief Pakistan
These historic tax relief measures will:
✔ Increase disposable income significantly
✔ Stimulate consumer spending
✔ Provide inflation compensation
✔ Encourage formal employment
For more news and updates, please visit PFM Today.
