Income tax may fall for some salaried segments

Facing limited fiscal space, the Shehbaz Sharif-led coalition government is set to unveil fresh tax measures worth Rs660 billion to Rs700bn in the 2026-27 budget. The fiscal policies align with commitments under an International Monetary Fund programme aimed at achieving an ambitious revenue collection target. In contrast to the broader revenue measures, the budget carries highly targeted good news for mid- and upper-level income earners. Individuals earning between Rs230,000 and Rs300,000 a month are expected to see a steep reduction in their tax burden, official sources involved in budget preparations told Dawn. A significant reduction is also planned for individuals earning between Rs266,000 and Rs341,000 a month, whose current slab carries a liability of Rs28,833 plus 30pc of income above Rs266,000. Additionally, the maximum salary tax rate is under consideration for a cut to around 30pc from the existing 35pc. However, no visible changes are expected for individuals drawing between Rs100,000 and Rs183,000 per month, a bracket where a large segment of the salaried class falls. The applicable tax for this group remains Rs500 plus 11pc of income above Rs100,001. The exemption threshold will remain unchanged at Rs600,000 annually, while those earning up to Rs1 million a year will continue to face a token 1pc tax, a rate described as purely for documentation purposes. The government has pledged to raise an ambitious Rs15.3 trillion i