Budget 2012-13 brought good news for salaried taxpayers

On June 5, 2012, in Tax News, by Aamir Ilyas

Government employees start talking about possible raise in their salaries before budget session and it has become accepted norm that political governments try to give good news to its employees by announcing ad hoc allowances. However, people working in private organizations generally think that budget brings nothing else for them but inflation.

Contrary to previous budgets, this year government took exemplary step to facilitate salaried class by reducing their tax burden. Now, people will pay less to the government on account of Income tax than previous year and they will be better able to address their other needs. The government of Pakistan has decided to reduce tax on salary from 8% to 100%. The following chart clearly explain this positive aspect of budget 2012-13

Salary per month	Salary per annum / taxable income	Tax Incidence		Increase / (decrease) in tax incidence
Salary per month	Salary per annum / taxable income	Before amendment	After amendment	Rupees	%age
30,000	360,000	2,000	-	(2,000)	(100.00)
40,000	480,000	16,800	4,000	(12,800)	(76.19)
50,000	600,000	27,000	10,000	(17,000)	(62.96)
60,000	720,000	43,200	16,000	(27,200)	(62.96)
70,000	840,000	63,000	26,500	(36,500)	(57.94)
80,000	960,000	85,500	38,500	(47,000)	(54.97)
90,000	1,080,000	106,500	50,500	(56,000)	(52.58)
100,000	1,200,000	120,000	62,500	(57,500)	(47.92)
125,000	1,500,000	179,500	92,500	(87,000)	(48.47)
150,000	1,800,000	252,000	137,500	(114,500)	(45.44)
175,000	2,100,000	315,000	182,500	(132,500)	(42.06)
200,000	2,400,000	384,000	227,500	(156,500)	(40.76)
225,000	2,700,000	432,000	282,500	(149,500)	(34.61)
250,000	3,000,000	525,000	342,500	(182,500)	(34.76)
275,000	3,300,000	577,500	402,500	(175,000)	(30.30)
300,000	3,600,000	646,250	462,500	(183,750)	(28.43)
400,000	4,800,000	960,000	702,500	(257,500)	(26.82)
500,000	6,000,000	1,200,000	942,500	(257,500)	(21.46)
750,000	9,000,000	1,800,000	1,542,500	(257,500)	(14.31)
1,000,000	12,000,000	2,400,000	2,142,500	(257,500)	(10.73)
1,200,000	14,400,000	2,880,000	2,622,500	(257,500)	(8.94)

Gul Zameer says:

October 25, 2012 at 9:13 pm

Sir, ap k is jumle ka matlab samaj nahi arha. Shayad ap criticise kar rahe ho. Am I right sir? Please reply me at gulzameerkhan@gmail.com:
“The government of Pakistan has decided to reduce tax on salary from 8% to 100%”.

Gul Zameer says:

October 25, 2012 at 9:13 pm

Sir, ap k is jumle ka matlab samaj nahi arha. Shayad ap criticise kar rahe ho. Am I right sir? Please reply me:
“The government of Pakistan has decided to reduce tax on salary from 8% to 100%”.

Anonymous says:

October 3, 2012 at 3:28 am

Dear Amir Sb., Is not there discrepancy between this table and your tax calculator. You tax calculator shows a liability of more than 4.2 lacs for salary exceeding 25 lacs. But here, you show even a person making 27 lac to have a liability of 2.8 lacs only.