New tax slabs for salaried persons in Pakistan as FY2026-27 begins

ISLAMABAD – The Finance Act 2026 has come into effect, introducing changes to Pakistan’s tax framework, including revised income tax slabs for salaried class. Under the new structure, individuals with taxable income up to Rs600,000 will continue to pay no income tax. For those earning above Rs600,000, tax rates will apply according to different income brackets. The revised slabs include a 1 percent tax on income exceeding Rs600,000 up to Rs1.2 million. For higher income categories, fixed amounts along with additional tax percentages will apply, with the highest bracket covering taxable income above Rs7 million. S. No. Taxable Income Rate of Tax 1 Where taxable income does not exceed Rs. 600,000 0% 2 Where taxable income exceeds Rs. 600,000 but does not exceed Rs. 1,200,000 1% of the amount exceeding Rs. 600,000 3 Where taxable income exceeds Rs. 1,200,000 but does not exceed Rs. 2,200,000 Rs. 6,000 + 11% of the amount exceeding Rs. 1,200,000 4 Where taxable income exceeds Rs. 2,200,000 but does not exceed Rs. 3,200,000 Rs. 116,000 + 20% of the amount exceeding Rs. 2,200,000 5 Where taxable income exceeds Rs. 3,200,000 but does not exceed Rs. 4,100,000 Rs. 316,000 + 25% of the amount exceeding Rs. 3,200,000 6 Where taxable income exceeds Rs. 4,100,000 but does not exceed Rs. 5,600,000 Rs. 541,000 + 29% of the amount exceeding Rs. 4,100,000 7 Where taxable income exceeds Rs. 5,600,000 but does not exceed Rs. 7,000,000 Rs. 976,000 + 32% of the amount exceeding Rs. 5,600,000 8 Where taxable income exceeds Rs. 7,000,000 Rs. 1,424,000 + 35% of the amount exceeding Rs. 7,000,000 According to the updated tax schedule, individuals falling in the highest income category will pay Rs1.424 million plus 35 percent tax on the amount exceeding Rs7 million. The implementation of the Finance Act 2026 marks the start of the new fiscal tax regime, with the updated rates now applicable under the revised income tax structure.