Govt revises threshold of taxable income for salaried, non-salaried persons

ISLAMABAD: The government on Tuesday proposed to revise the thresholds of taxable income for salaried and non-salaried persons in the federal budget 2019-20.

Tax rates for both the salaried and non-salaried persons were drastically reduced in the Finance Act, 2018. The threshold of taxable income was increased threefold from Rs 400,000 to  Rs 1,200,000, which resulted in huge shortfall of approximately Rs 80 billion in revenue collection.

The threshold of taxable income is generally a proportion of the per capita income of a country.

The government proposed to fix the threshold of taxable income for the salaried persons at Rs 600,000 and for the non-salaried persons at Rs 400,000.

In the case of salaried individuals deriving income exceeding Rs 600,000, it proposed to introduce 11 taxable slabs with progressive tax rates ranging from 5% to 35%.

For the non-salaried persons deriving income exceeding Rs 400, 000, the government proposed to introduce eight taxable slabs of income with tax rates ranging from 5% to 35%.