Pakistan Income Tax Calculator for Salaried and Business Individuals 2024-25 (Tax Year 2023)

Introduction

Income tax is the major source of revenue for the government and one of the most significant duties for salaried as well as business individuals everywhere. The tax slabs are revised annually by the Federal Board of Revenue (FBR), so it is important for every tax filer to know how their earnings will be taxed in the present regime. This will guide you through the income tax slabs for fiscal year 2024-25 and some of the ways to make it easier to calculate you’re third. As either an employee on salary or a business owner, understanding your tax responsibilities can prevent you from incurring penalties and keep you out of legal hot water.

Salaried Individuals Income Tax Slabs (2024-2025)

Tax Brackets and Rates

Salaried class pays a progressive tax on monthly income. So, the more you make, the greater the percentage of your income that will be taxed. Following are the income tax slabs for AY 2024-25:

Income Tax Slabs Rate of Income Tax PKR 600,000-ExemptAbove PKR 600,000 but not exceeding PKR 1,200,000 5% of the amount exceeding PKR 600,000 above PKR 1,200,000 but not exceeding PKR2, 400 0% of the amount exceeding pkr. I hope system (Good or bad) will be same for all who’ll hold top position for Pakistan if they succeed in elections.

Taxable Income

Taxable income comprises all sources of income, including:

Wages (basic wages, bonuses, commissions, etc.)

Rental income

Investment income (interest, dividends, etc.)

Tax Deductions

As an employee, some tax deductions can help you to reduce your taxable income:

Zakat contributions

Charitable donations

Retirement fund contributions

Insurance premiums

These deductions reduce the amount of income that is taxed.

Example of Tax Calculation for Salaried Persons

Assume you have an annual income of PKR 1,500,000. Taxable income: 1,500,000

Tax slab: 10% (for income between 1200,001 to 2,400,000)

California state tax = 1,500,000 x 10% = PKR 150,000

Businessmen Income Tax Slabs (2024-2025)

Tax Categories for Businessmen

The tax system is slightly different for businessmen, depending on your business structure. Here’s a breakdown:

Single proprietors: Get taxed on their business income as personal individual income.

Association of Persons (AOPs): Partnership on which the partners are taxed separately.

Companies: You mention companies; companies pay corporate tax.

Tax Rates for Businessmen

Income Slab (PKR) Sole Proprietor Tax Rate up to 600,000 nil

600,001 – 1,200,000 5%
1,200,001 – 2.4000 10%
2.400.001-4.8000 15%
4.800001-8.000 20%
Above 8m 25%

Allowable Business Expenses
Business People can write off expenses that are directly related to their businesses, including:
Rent for business premises
Remuneration of employees in the form of salaries and wages
Utilities and other operational costs
Investing in equipment and machinery
These costs result in a less taxable income and hence lower taxes.
Tax Calculation Example for Businessmen

Imagine that your annual business earnings are 3, 000,000 PKR.

Taxable income: 3,000,000

Tax slab: 15% (for income between 2400,001 and 4,800,000)

Income tax = 3,000,000 x 15% PKR = PKR 450,000

How to Use an Income Tax Calculator

Online Tools for Tax Calculation

For this purpose, the FBR and other reliable online sources also have income tax calculators where you can put your income amount to get direct calculation of what are payable taxes.

Input Requirements
To do it with the online calculator you need to provide the following:

Gross annual income (such as salary, business income, etc.) 3-4.
Deductibles (Zakat, sadaqa, retirement fund contributions)
Applicable tax slab (based on your income)
How to Use the Tax Calculator Step-by-Step
Go to the FBR Tax Calculator page or other reliable sites.
In the space provided, enter all of your income.
Include any deductions you want to take (if applicable).

If you don’t enter any information, only standard tax estimates will be shown. Click Calculate after you have made those entries, to see your estimated total tax.
The simplest and most accurate way to calculate your tax due is online.

NTN (National Tax Number) Verification

For taxation purpose and to remain in FBR’s good books, one has to have a NTN. If you have not yet registered on NTN, do so now.

Importance of NTN
Required for tax filing.
Necessary for business registration.
Avoids tax-related legal problems.
Verification Process
This simple guide will assist you to check your NTN before filing in the annual income tax returns.
Go to the FBR website.
Fill your NTN number in the box given below.
Click verify to see if your NTN is active and valid.
In case of any complaint, you can approach FBR or your nearest tax office.

Conclusion

If you’re earning in Pakistan, it’s crucial to know your income tax. When you are aware of the proper tax slabs and have an income tax calculator handy, you can file your taxes on time and with ease. Furthermore, by NTN verification for keeping all legal requirements and for the proven way of running a business. We hope this guide has given you everything you need to estimate your 2024-25 tax bill.

If you want help in any of this, look up a tax expert or go online to keep current with tax laws as they evolve.