Key Highlights from Federal Budget 2024-2025
The Pakistani government unveiled the much-anticipated annual federal budget for fiscal year 2024-2025 on June 12, 2024. Significant increases across various income and sales tax categories dominate this year’s budget, with harsher penalties for non-filers and late filers.
This article dives into the budget’s key aspects, focusing primarily on income and sales tax changes – critical factors impacting the financial landscape.
Income Tax Changes
Personal Income Tax: Non-salaried individuals and AOPs now face revised tax rates, jumping from 35% to 45%.
Salaried Individuals: The tax rate remains at 35%, but incremental rates across income slabs have increased.
Advance Tax on Property Purchases: Rates have been adjusted as follows:
Up to Rs. 50 million: 3% for filers, 12% for non-filers, and 6% for late filers.
Between Rs. 50-100 million: 3.5% for filers, 16% for non-filers, and 7% for late filers.
Over Rs. 100 million: 4% for filers, 20% for non-filers, and 8% for late filers.
Advance Tax on Property Sales: Similar adjustments have been made:
Up to Rs. 50 million: 3% for filers, 10% for non-filers, and 6% for late filers.
Between Rs. 50-100 million: 3.5% for filers, 10% for non-filers, and 7% for late filers.
Over Rs. 100 million: 4% for filers, 10% for non-filers, and 8% for late filers.
Capital Gains on Properties: Rates for properties acquired on or after July 1, 2024, are 15% for filers and 15-45% for non-filers.
Capital Gains on Securities: For securities acquired on or after July 1, 2024, the tax rate is a flat 15% for filers. Non-filers will be taxed at normal rates, with a minimum of 15% and a maximum of 45%.
Sales Tax Changes
The new budget introduces several changes to sales tax, including:
Withdrawal of Exemptions: Several previously exempt items are now subject to sales tax, including vegetables & fruits from Afghanistan, medical & diagnostics kits/equipment, and supplies to charitable hospitals.
Introduction of New Exemptions: Exemptions were introduced for imports of goods in natural disasters, unbranded milk, and iron & steel scrap.
Changes in Sales Tax Rates: Tax rates have increased for various items, including LPG (from 10% to 18%), hybrid electric vehicles (locally manufactured) (to 18%), petroleum products (now subject to exemption), and mobile phones (standard rate of 18%, with phones over $500 taxed at 25%).
Importance of Tax Filing
The new budget emphasizes the importance of filing taxes. The term “late filers” serves as a reminder to individuals to fulfill their tax obligations on time.
ebfiler: Your Tax Filing Solution
To make tax filing easier for “non-filers and late filers,” ebfiler has developed a user-friendly online platform – The ebfiler App and Web Portal. This platform empowers individuals to become filers and submit their taxes conveniently.