The Federal Board of Revenue (FBR) has announced the new salary tax slabs for the tax year 2024, effective from July 1, 2021, to June 30, 2022. This article provides a detailed explanation of these tax slabs and how they impact your taxable income.
Salary Tax Slabs for Tax Year 2022
Here’s a breakdown of the salary tax slabs for the tax year 2022:
| Annual Salary (Rupees) | Tax Rate (2022) |
|---|---|
| Upto 600,000 | 0% |
| 600,000 – 1,200,000 | 5% of income exceeding Rs. 600,000 |
| 1,200,000 – 1,800,000 | Rs. 30,000 + 10% of income exceeding Rs. 1,200,000 |
| 1,800,000 – 2,500,000 | Rs. 90,000 + 15% of income exceeding Rs. 1,800,000 |
| 2,500,000 – 3,500,000 | Rs. 195,000 + 17.5% of income exceeding Rs. 2,500,000 |
| 3,500,000 – 5,000,000 | Rs. 370,000 + 20% of income exceeding Rs. 3,500,000 |
| 5,000,000 – 8,000,000 | Rs. 670,000 + 22.5% of income exceeding Rs. 5,000,000 |
| 8,000,000 – 12,000,000 | Rs. 1,345,000 + 25% of income exceeding Rs. 8,000,000 |
| 12,000,000 – 30,000,000 | Rs. 2,345,000 + 27.5% of income exceeding Rs. 12,000,000 |
How to Calculate Your Tax Liability?
To calculate your tax liability, you can use the following steps:
- Determine Your Gross Annual Salary: This includes your basic salary, allowances, bonuses, and other income.
- Identify the Applicable Tax Slab: Based on your gross annual salary, determine the relevant tax slab from the table above.
- Calculate Taxable Income: Subtract any tax exemptions and deductions from your gross annual salary.
- Apply the Tax Rate: Apply the corresponding tax rate to your taxable income.
- Calculate Tax Liability: Multiply the taxable income by the tax rate to determine your total tax liability.
Example:
If your annual salary is Rs. 1,500,000, you fall into the second tax slab. Your tax liability would be:
- Rs. 30,000 + 10% of (Rs. 1,500,000 – Rs. 1,200,000) = Rs. 60,000
Free Salary Tax Calculator:
To simplify the tax calculation process, we’ve created a free salary tax calculator. Simply input your annual gross salary, and the calculator will automatically determine your tax liability.
Tax Deduction at Source (TDS):
Your employer is responsible for deducting tax from your salary and remitting it to the FBR. This is known as Tax Deduction at Source (TDS).
Key Considerations:
- Tax Exemptions and Deductions: Be aware of the various tax exemptions and deductions available to reduce your taxable income. These may include deductions for health insurance premiums, education expenses, and charitable donations.
- Tax Withholding: Your employer is responsible for withholding taxes from your salary and remitting them to the FBR.
- Tax Filing: You must file an annual income tax return to declare your income and pay any outstanding taxes.
- Consult a Tax Professional: If you have complex financial situations or need personalized advice, it’s advisable to consult a tax professional.
By understanding these tax slabs and their implications, you can effectively manage your tax liabilities and make informed financial decisions.
