ISLAMABAD, June 10: The budget for 2007-08 does not provide any relief to salaried class taxpayers because the government neither raised the exemption threshold for income tax nor made any changes in the rates of the levy.
The government had introduced flat rates for taxing gross income of salaried and non-salaried taxpayers in the 2006-07 budget. It had raised the tax exemption threshold and offered special concessions to women taxpayers.
Central Board of Revenue spokesman Habib Fakhruddin told Dawn that from July 1, 2006, salary drawn was subject to the simplified tax regime — flat rates for taxing gross income — introduced through Finance Act 2006 and the same would continue to apply for salary drawn on or after July 1, 2007, without any change. Salient features of this simplified scheme were that allowances and perquisites were taxable at flat rates of tax slabs, he added.
In the budget, he said, employers had been empowered to allow any admissible tax credit for the purpose of calculation of tax to be deducted by the employer from the employee.
In addition, the CBR spokesman said, the employer had been authorised to take into account taxes, if any, already paid by the employee, by way of deducting flash collection at source.
He said the employer had also been authorised to adjust tax refunds due for any prior years to the employee against the current year tax liability for the purpose of deduction of tax at source.
Last year, the exemption limit for salaried taxpayers had been raised from Rs100,000 to Rs150,000 with income tax rates ranging from 0.25 per cent to 20 per cent of gross salary. This remains unchanged in the budget for 2007-08.
