Federal Board Of Revenue (FBR) Increase Withhold Tax Rate

Web Desk — Federal Board of Revenue (FBR) has increased the withholding tax rate for anyone making more than Rs.600,000 to Rs.1,200,000. The tax rate is 2.5 percent for amounts exceeding Rs.600,000.

For those whose gross salary exceeds Rs.1,200,000 but not more than Rs.2,400,000, the withholding tax rate is Rs.15,000 + 12.50 percent of the amount in excess of Rs.12,000,000.

An FBR notification states that Rs.165,000 + 22.5 percent of the amount exceeding of Rs.2,400,000 will be deducted if taxable income (gross pay) exceeds Rs.2,400,000 and not exceeds Rs.3,600,000.

27.50 percent of the amount beyond Rs.3.6 million and Rs.435,000 will be deducted where taxable income gross salary exceeds Rs.3,600,000 to Rs.6,000,000.

The top slab people earning more than Rs.6 million, will pay Rs.1,095,000 plus 35% of the amount exceeding Rs.6,000,000.

The federal government defined increased tax rates on cash withdrawals for transparency. For non-filers, cash withdrawals over Rs.50,000 are subject to larger tax deductions. On the other hand, filers are no longer subject to tax deductions for cash withdrawals under Rs50,000 per day.

The government hopes that this step will encourage non-filers to start paying taxes and boost the nation’s revenue.