Govt approves reduced property tax rates, new income tax slabs for salaried class

ISLAMABAD: The government has approved a reduction in advance tax rates on property buyers and sellers, with the revised rates set to take effect from July 1 under the Finance Bill for the upcoming fiscal year.

According to details, the advance tax on the sale of immovable property has been reduced. Under the new regime, property sellers will be required to pay a tax equivalent to 2.75 per cent of the total transaction value from July 1.

Property buyers will also be subject to a reduced advance tax, with a rate of 1.25 per cent to be charged on the fair market value of the property.

The Finance Bill also introduces new taxation measures for corporate entities. Banking companies and firms operating in the fertilizer sector with annual income exceeding Rs150 million will be required to pay a 10 per cent tax.

Similarly, all other corporate companies earning more than Rs500 million annually will be subject to an 8 per cent tax rate.

Meanwhile, the government has also proposed revised income tax slabs for salaried individuals and government employees, which are expected to come into force from July 1, 2026, following formal approval of the Finance Bill.

Under the new structure, individuals earning up to Rs600,000 annually will remain exempt from income tax. Salaried persons earning between Rs600,001 and Rs1.2 million per year will pay income tax at a reduced rate of 1 per cent.

Those with annual incomes ranging from Rs1.2 million to Rs2.2 million will pay a fixed tax of Rs6,000 in addition to 11 per cent tax on income exceeding Rs1.2 million.

For individuals earning between Rs2.2 million and Rs3.2 million annually, the tax rate on additional income has been reduced from 23 per cent to 20 per cent. They will pay a fixed tax of Rs116,000 plus 20 per cent on income above Rs2.2 million.

The proposed measures are aimed at providing relief to taxpayers while streamlining the taxation system and broadening the revenue base.