ISLAMABAD, June 5: The government has proposed flat rates for taxing gross income of salaried and non-salaried taxpayers in the budget 2006-07 besides special tax concessions for women taxpayers.
Through the Finance Bill 2006 issued here on Monday the exemption limit for salaried taxpayers has 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 from the current 3.5 per cent to 30 per cent.
However, the exemption threshold for non-salaried taxpayers will remain at Rs100,000 with the new income tax rates ranging from 0.5 per cent to 25 per cent as compared to the current rates of 7.5 per cent to 35 per cent.
It can be inferred from the new rates that the new system aims at facilitating taxpayers and would not increase tax liability of any taxpayer.
For women exemption limit has been increased to Rs200,000 for salaried and to Rs125,000/- for non-salaried taxpayers.
According to the new rates for the salaried class, where taxable income does not exceed Rs150,000 the income tax rate will be zero per cent.
On taxable income beyond Rs150,000 but does not exceed Rs200,000, the rate will be 0.25 per cent. Where taxable income more than Rs200,000 but does not exceed Rs250,000 the rate will be 0.50 per cent. Where the taxable income is more than Rs250,000 but does not exceed Rs300,000 the rate will be 0.75 per cent.
Where taxable income exceeds Rs300,000 but does not exceed Rs350,000 the rate will be 1.50 per cent; where it exceeds Rs350,000 but does not go beyond Rs400,000 the rate will be 2.50 per cent; where it exceeds Rs400,000 but does not exceed Rs500,000 the rate will be 3.50 per cent and where it exceeds Rs500,000 but does not exceed Rs600,000 the rate will be 4.50 per cent.
Likewise, where taxable income exceeds Rs600,000 but does not go beyond Rs700,000 the tax rate will be 6 per cent; where the it exceeds Rs700,000 but does not exceed Rs850,000 the rate will be 7.50 per cent; where it exceeds Rs850,000 but does not go beyond Rs950,000 the rate will be 9 per cent; where it exceeds Rs950,000 but does not exceed Rs1,050,000 the rate will be 10 per cent; where it exceeds Rs1,050,000 but does not exceed Rs1,200,000 the rate will be 11 per cent; where it exceeds Rs1,200,000 but does not exceed Rs1,500,000 the rate will be 12.50 per cent; where it exceeds Rs1,500,000 but does not exceed Rs1,700,000 the rate will be 14 per cent and where taxable income exceeds Rs1,700,000 but does not exceed Rs2,000,000 the income tax rate will be 15 per cent.
Where taxable income exceeds Rs2,000,000 but does not go beyond Rs3,150,000 the proposed tax rate will be 16 per cent; where it exceeds Rs3,150,000 but remains below Rs3,700,001 the rate will be 17.50 per cent; where it exceeds Rs3,700,000 but does not exceed Rs4,450,000 the rate will be 18.50 per cent; where it exceeds Rs4,450,000 but does not exceed Rs8,400,000 the rate will be 19 per cent and where it exceeds Rs8,400,000 the rate will be 20 per cent, provided that where income of a woman taxpayer is covered by this clause, no tax shall be charged if the taxable income does not exceed Rs200,000.
The proposed income tax rate for non-salaried taxpayers will be zero per cent where taxable income does not exceed Rs100,000. But where taxable income exceeds Rs100,000 but does not exceed Rs110,000 the rate will be 0.50 per cent; where it exceeds Rs110,000 but does not exceed Rs125,000 the rate will be one per cent; where it exceeds Rs125,000 but does not exceed Rs150,000 the rate will be two per cent; where it exceeds Rs150,000 but does not exceed Rs175,000 the rate will be three per cent; where it exceeds Rs175,000 but does not exceed Rs200,000 the rate will be four per cent; where it exceeds Rs200,000 but does not exceed Rs300,000 the rate will be five per cent; where it exceeds Rs300,000 but does not exceed Rs400,000 the rate will be 7.50 per cent; where it exceeds Rs400,000 but does not exceed Rs500,000 the rate will be 10 per cent; it exceeds Rs500,000 but does not exceed Rs600,000 the rate will be 12.50 per cent and where taxable income exceeds Rs600,000 but does not exceed Rs800,000 the income tax rate will be 15 per cent.
Likewise where taxable income exceeds Rs800,000 but does not exceed Rs10,00,000 the rate will be 17.50 per cent; where it exceeds Rs10,00,000 but does not exceed Rs13,00,000 the rate will be 21 per cent and where it exceeds Rs13,00,000 the rate will be 25 per cent, provided that where income of a woman taxpayer is covered by this clause, no tax shall be charged if the taxable income does not exceed Rs125,000.