Last Updated on: 20th July 2023, 09:13 pm
In Budget 2022-23, New Income Tax Slabs For The Employee Category Were Introduced
The new coalition government has introduced seven income tax brackets for the country’s working class for the next fiscal year.
Under the Finance Law 2022-23, the government exempted monthly salaries up to Rs 50,000 (Rs 600,000 per year) from income tax. The government deducts a lump sum of Rs. 100 if annual taxable income exceeds Rs. 600,000 (Rs. 50,000 per month) but does not exceed Rs. 1.2 million per year (Rs. 100,000 per month).
If the annual taxable income exceeds Rs. 1.2 million (Rs. 100,000 per month) but the annual income does not exceed Rs. 2.4 million or Rs. Exceeds 2 million rupees. If the annual taxable income exceeds Rs. 2.4 million or Rs. 200,000 per month but does not exceed Rs. 3.6 million per year or Rs. 300,000 per month, the tax rate is 12.5% of the amount in excess of Rs. 2.4 million, as well as a fixed amount of Rs 84,000 per year.
If the annual taxable income exceeds Rs. 3.6 million or Rs. 300,000 per month but does not exceed Rs. 6 million per year / Rs. 500,000 per month, the tax rate is 17.5% on the amount in excess of the Rs. 3.6 million, with an additional flat rate of Rs. 234,000 per year (Rs. 19,500 per month).
The government deducts Rs. 654,000 per year (Rs. 54,500 per month) + 22.5% of the amount exceeding Rs than Rs. 6 crore is Rs. 12 crore (Rs. 1 crore).
Also Read: Federal Budget 2022-23: Cabinet Accepted A 15-Piece Increase In Govt Employees’ Salaries
If the annual taxable income exceeds Rs. 12 million (Rs. 1 million per month), the government will deduct an annual income tax of Rs. 2,004,000 (Rs. 1,67,000 per month) + 32.5% of the amount exceeding Rs. 12 million.
The government also introduced three blocks for the corporate tax rate with the Finance Bill 2023. Under the new finance law, the government has proposed an income tax rate of 20% for small businesses, 42% for banking companies, and 29% for all other businesses.
Also Read: Federal Govt Employees Salaries Will Increase in Budget 2022-23