Tax rates for individuals and AOPs for tax year 2020
Increase in tax rates for individuals and AOPs for tax year 2020 Division I, Part I of the First Schedule
Prior to the Finance Act, 2019, the threshold of taxable income was Rs.400,000 for salaried individuals. However, there was just a nominal fixed tax of Rs.1000 on taxable income exceeding Rs.400,000 up to Rs.800,000 and Rs.2000 fixed tax on taxable income exceeding Rs.800,000 up to Rs.1,200,000.
Except the nominal fixed tax, the threshold of taxable income was Rs.1,200,000 and above this amount there were four progressive tax rates at 5%, 15%, 20% and 25% for four income slabs having income exceeding Rs.1,200,000.
Through the Finance Act, 2019, the threshold of taxable income for salaried individuals has been fixed at Rs.600,000 and above Rs.600,000, there are eleven income slabs with progressive tax rates ranging from 5% to 35% as given hereunder:-
| Sr. # | Taxable Income | Rate of Tax |
| 1 | Where taxable income does not exceed Rs. 600,000 | 0% |
| 2 | Where taxable income exceeds 600,000 but does not exceed Rs. 1200000 | Rs. 5% of the amount exceeding Rs.600,000 |
| 3 | Where taxable income exceeds Rs.1,200,000 but does not exceed Rs.1,800,000 | Rs. 30,000 plus 10% of the amount exceeding Rs.1,200,000 |
| 4 | Where taxable income exceeds Rs. 1,800,000 but does not exceed Rs. 2500000 | Rs. 90,000 plus 15% of the amount exceeding Rs.1,800,000 |
| 5 | Where taxable income exceeds Rs. 2,500,000 but does not exceed Rs. 3,500,000 | Rs. 195,000 plus 17.5% of the amount exceeding Rs.2,500,000 |
| 6 | Where taxable income exceeds Rs. 3,500,000 but does not exceed Rs. 5000000 | Rs. 370,000 plus 20% of the amount exceeding Rs.3,500,000 |
| 7 | Where taxable income exceeds Rs. 5,000,000 but does not exceed Rs. 8,000,000 | Rs. 670,000 plus 22.5% of the amount exceeding Rs.5,000,000 |
| 8 | Where taxable income exceeds Rs. 8,000,000 but does not exceed Rs. 12,000,000 | Rs. 1,345,000 plus 25% of the amount exceeding Rs.8,000,000 |
| 9 | Where taxable income exceeds Rs. 12,000,000 but does not exceed Rs.30,000,000 | Rs. 2,345,000 plus 27.5% of the amount exceeding Rs. 12,000,000 |
| 10 | Where taxable income exceeds Rs. 30,000,000 but does not exceed Rs.50,000,000 | Rs. 7,295,000 plus 30% of the amount exceeding Rs. 30,000,000 |
| 11 | Where taxable income exceeds Rs. 50,000,000 but does not exceed Rs.75,000,000 | Rs. 13,295,000 plus 32.5% of the amount exceeding Rs.50,000,000 |
| 12 | Where taxable income exceeds Rs.75,000,000 | Rs. 21,420,000 plus 35% of the amount exceeding Rs.75,000,000 |
Prior to the Finance Act, 2019, the tax rates for salaried individuals were applicable to individuals having income under the head, “salary” exceeding 50% of his taxable income. Through the Finance Act, 2019, the salaried tax rates would be applicable to those individuals where income under the head “salary” exceeds 75% of the individuals’ taxable income.
For individuals other than salaried individuals, the threshold of taxable income was Rs.400,000 prior to the Finance Act, 2019. However, there was just a nominal fixed tax of Rs.1000 on taxable income exceeding Rs.400,000 up to Rs.800,000 and Rs.2000 fixed tax on taxable income exceeding Rs.800,000 up to Rs.1,200,000.
Except the nominal fixed tax, the threshold of taxable income was Rs.1,200,000 and above this amount there were five progressive tax rates at 5%, 15%, 20%, 25% and 29% for five income slabs having income exceeding Rs.1,200,000.
Further, prior to the Finance Act, 2019, the tax rates for associations of persons were separately provided. The threshold of taxable income for AOPs was Rs.400,000 and there were six income slabs with progressive tax rates ranging from 5% to 30%.
Through the Finance Act, 2019, tax rates for non-salaried individuals and AOPs have been unified with threshold of taxable income at Rs.400,000 and thereafter seven income slabs have been provided with progressive tax rates ranging from 5% to 35% as given hereunder:-
| Sr. # | Taxable Income | Rate of tax |
| 1 | Where taxable income does not exceed Rs. 400,000 | 0% |
| 2 | Where taxable income exceeds Rs. 400,000 but does not exceed Rs. 600,000 | 5% of the amount exceeding Rs. 400,000 |
| 3 | Where taxable income exceeds Rs. 600,000 but does not exceed Rs. 1,200,000 | Rs. 10,000 plus 10% of the amount exceeding Rs.600,000 |
| 4 | Where taxable income exceeds Rs. 1,200,000 but does not exceed Rs. Rs.2,400,000 | Rs. 70,000 plus 15% of the amount exceeding 1,200,000 |
| 5 | Where taxable income exceeds Rs. 2,400,000 but does not exceed Rs. 3,000,000 | Rs. 250,000 plus 20% of the amount exceeding Rs.2,400,000 |
| 6 | Where taxable income exceeds Rs. 3,000,000 but does not exceed Rs. 4,000,000 | Rs. 370,000 plus 25% of the amount exceeding Rs.3,000,000 |
| 7 | Where taxable income exceeds Rs. 4,000,000 but does not exceed Rs. 6,000,000 | Rs. 620,000 plus 30% of the amount exceeding Rs.4,000,000 |
| 8 | Where taxable income exceeds Rs. 6,000,000 | Rs. 1,220,000 plus 35% of the amount exceeding Rs.6,000,000 |
These explanations have been issued by FBR after the Finance Act 2019 approved / passed from the parliament of Pakistan.
