ISLAMABAD — The government has proposed income tax relief measures for the fiscal year 2026-27, primarily targeting salaried individuals and boosting economic activities.
Tax Reduction for Salaried Taxpayers
A key highlight is the reduction in income tax rates for salaried taxpayers. The restructuring of tax slabs and the increase in the threshold for the highest tax rate of 35% from Rs. 4.1 million to Rs. 7 million marks significant relief.
Real Estate Sector Incentives
To bolster the real estate sector, the government has reduced advance tax rates on immovable property sales and purchases to flat rates of 2.75% and 1.5%, respectively. Additionally, the tax on deemed income from immovable property has been abolished, eliminating Section 7E related to capital asset taxation.
Super Tax Adjustments
The government has cut super tax rates for persons earning over Rs. 500 million from 10% to 8%, though this does not affect the banking, energy, and fertilizer sectors.
Export Sector Benefits
Exporters benefit from reduced tax collection rates from 2% to 1.25% and the extension of the 0.25% concessionary tax rate for IT and IT-enabled services until 2029.
Promoting Digital Transactions
An advance tax on foreign payments via cards is reduced from 5% to 0.5% to encourage digital transactions. The government also offers up to a 10% tax credit for investments in electronic resources integrating with the Federal Board of Revenue’s computerized systems. Additionally, the advance tax on payments for foreign television plays and advertisements is withdrawn.
