Govt Hikes Salaries Reveals New Tax Slabs for 2025–26
Government Approves Salary Increase and New Tax Rules for 2025–26
In the new budget for 2025–26, the federal government has announced a salary increase for government workers and a 10% raise in pensions.
The Ministry of Finance has officially said this increase also applies to people working on contract jobs.
Additionally, the government will now provide a 30% disparity allowance to employees who were previously excluded. This extra allowance is to help reduce unfair differences in pay.
Both the salary increase and the new allowance will start from July 1, 2025.
New Income Tax Rules for Salaried People
The government has also shared new income tax rules:
No tax for people earning up to Rs600,000 a year.
People earning between Rs600,001 and Rs1.2 million a year will pay 1% tax on the amount above Rs600,000.
If someone earns between Rs1.2 million and Rs2.2 million, they will pay Rs6,000 plus 11% tax on the amount above Rs1.2 million.
For income between Rs2.2 million and Rs3.2 million, the tax is Rs116,000 plus 23% on anything over Rs2.2 million.
Those earning between Rs3.2 million and Rs4.1 million will pay Rs346,000 plus 30% tax on the extra amount above Rs3.2 million.
Anyone earning more than Rs 4.1 million per year will have to pay Rs 616,000 plus 35% tax on the amount exceeding Rs 4.1 million.
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