Income Tax Calculator (FBR)

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In Pakistan, the income tax is calculated based on a progressive tax rate system. The tax rates may change, so it’s essential to check the latest rates and rules on the FBR website or consult a tax professional.the tax rates for individuals were as follows:

1. Tax Slabs for Individuals (Tax Year 2021-2022):

• Up to PKR 600,000: 0% (No tax)
• From PKR 600,001 to PKR 1,200,000: 5%
• From PKR 1,200,001 to PKR 1,800,000: 10%
• From PKR 1,800,001 to PKR 2,500,000: 15%
• From PKR 2,500,001 to PKR 3,500,000: 20%
• Over PKR 3,500,000: 25%

1. Income Tax Calculation Example:

• If your taxable income is PKR 1,500,000, the tax calculation would be as follows:
  • 5% on the first PKR 600,000 (0% on the remaining amount)
  • 10% on the next PKR 600,000 (totaling PKR 1,200,000)
  • The remaining PKR 300,000 is not taxed.
  So, the total income tax would be [(5% of PKR 600,000) + (10% of PKR 600,000)] = PKR 60,000.

It’s important to note that there may be deductions and exemptions available, and the tax laws can change. Always refer to the latest tax regulations or consult with a tax professional for accurate and up-to-date information.

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The Federal Board of Revenue (FBR) is the revenue collection agency of the Government of Pakistan. It is responsible for collecting taxes in the country, including income tax. The income tax system in Pakistan is designed to generate revenue for the government by taxing the income of individuals, businesses, and other entities.

Here are some key points about FBR income tax in Pakistan:

1. Tax Types:

• Individual Income Tax: Individuals are taxed on their income, which includes salaries, business profits, capital gains, and other sources.
• Corporate Income Tax: Businesses, including companies and other corporate entities, are subject to corporate income tax on their profits.

1. Tax Rates:

• The income tax rates for individuals and businesses can vary based on the income levels and the type of entity.
• There may be different tax rates for different sources of income, such as salary income, business income, and capital gains.

1. Tax Returns:

• Individuals and businesses are required to file annual tax returns with the FBR.
• The tax return provides details about the taxpayer’s income, deductions, and tax liability.

1. Withholding Tax:

• The FBR also collects taxes through a system of withholding tax. Employers, financial institutions, and other entities deduct taxes at the source before making payments to individuals or businesses.

1. Tax Exemptions and Deductions:

• The tax code may provide certain exemptions and deductions to individuals and businesses to encourage specific economic activities or to provide relief in certain circumstances.

1. Tax Compliance and Enforcement:

• The FBR is responsible for ensuring tax compliance and has the authority to audit taxpayers to verify the accuracy of their financial statements and tax returns.

1. Taxpayer Services:

• The FBR provides various services to facilitate taxpayers, including online systems for tax filing, payment, and access to information.

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