1. What is Income Tax?

Income tax is a direct tax imposed on individuals or entities that varies with respective income or profits. In Pakistan, the Federal Board of Revenue (FBR) administers income tax under the Income Tax Ordinance, 2001.

2. How Does the Calculator Work?

The calculator uses the progressive tax slabs for FY 2024-25:

Tax Slabs for FY 2024-25:

• Up to PKR 600,000: 0%
• PKR 600,001 - 1,200,000: 2.5% of amount exceeding PKR 600,000
• PKR 1,200,001 - 2,400,000: PKR 15,000 + 12.5% of amount exceeding PKR 1,200,000
• PKR 2,400,001 - 3,600,000: PKR 165,000 + 20% of amount exceeding PKR 2,400,000
• PKR 3,600,001 - 6,000,000: PKR 405,000 + 25% of amount exceeding PKR 3,600,000
• PKR 6,000,001 - 12,000,000: PKR 1,005,000 + 32.5% of amount exceeding PKR 6,000,000
• Above PKR 12,000,000: PKR 2,955,000 + 35% of amount exceeding PKR 12,000,000

3. Importance of Tax Calculation

Details: Accurate tax calculation helps in financial planning, ensures compliance with tax laws, and avoids penalties for underpayment.

4. Using the Calculator

Tips: Enter your annual income in PKR. The calculator will automatically apply the relevant tax slab rates for FY 2024-25.

5. Frequently Asked Questions (FAQ)

Q1: What is the tax-free threshold for FY 2024-25?
A: The first PKR 600,000 of annual income is tax-free for all individuals.

Q2: Are there any tax credits available?
A: Yes, various tax credits may be available depending on your circumstances (e.g., investment in shares, insurance premiums).

Q3: When is the tax return due in Pakistan?
A: For individuals, the deadline is typically December 31st of the tax year.

Q4: What if I have multiple income sources?
A: You should combine all income sources when calculating your total taxable income.

Q5: Are these rates for salaried or non-salaried individuals?
A: These rates apply to both salaried and non-salaried individuals, though some deductions may differ.