ISLAMABAD — The government has introduced income tax relief measures for the fiscal year 2026-27. These initiatives aim to support salaried individuals and boost economic growth.
Income Tax Relief for Salaried Taxpayers
Salaried taxpayers can anticipate reduced income tax rates with significant adjustments:
- Restructuring of tax slabs
- Increasing the 35% tax rate threshold from Rs. 4.1 million to Rs. 7 million
These changes aim to provide substantial relief to taxpayers.
Incentives for the Real Estate Sector
The government has rolled out several incentives to invigorate the real estate sector. Key measures include:
- Flat advance tax rates on the sale and purchase of immovable property at 2.75% and 1.5% respectively
- Removing taxation on deemed income from immovable property, thereby abolishing Section 7E on capital asset taxation
Super Tax Reductions and Benefits for Export Sector
Adjustments to Super Tax
For those earning over Rs. 500 million, the super tax rate drops from 10% to 8%. However, this change does not impact the banking, energy, and fertilizer sectors.
Benefits for Export Sector
Exporters will benefit from:
- A tax rate reduction from 2% to 1.25%
- An extension of the 0.25% concessionary tax rate for IT and IT-enabled services until 2029
Encouraging Digital Transactions
To foster digital transactions, the advance tax on foreign payments via cards reduces from 5% to 0.5%. Furthermore, businesses that invest in electronic resources compatible with the Federal Board of Revenue’s computerized systems can secure up to a 10% tax credit. The advance tax on foreign television plays and advertisements has also been abolished.
