How much tax will be deducted from salary from July 1? New slabs introduced

ISLAMABAD: The federal government has introduced new income tax slabs for government employees and salaried class from July 1, 2026.

According to the report, the National Assembly has approved the Finance Bill 2026, under which new tax rates have been fixed for people with different incomes.

According to the Finance Bill, people with an annual income of up to Rs 6 lakh have been completely exempted from income tax, while people with an annual income of Rs 6 lakh to Rs 1.2 lakh will be subject to one percent income tax.

Under the new tax system, people with an annual income of Rs 1.2 lakh to Rs 2.2 lakh will have to pay a fixed tax of Rs 6,000, while 11 percent tax will be due on the excess amount.

Similarly, a fixed tax of Rs 116,000 has been imposed on people with an annual income of Rs 2.2 million to Rs 3.2 million, while 20 percent tax will have to be paid on the excess amount, while earlier this rate was 23 percent.

The Finance Bill states that a fixed tax of Rs 3.46 million will be payable on people with an annual income of Rs 3.2 million to Rs 4.1 million and a tax of 25 percent on the excess amount.

Similarly, a fixed tax of Rs 5.41 million has been imposed on people with an annual income of Rs 4.1 million to Rs 5.6 million, while 29 percent tax will have to be paid on the excess amount.

Also read: Big drop in gold prices in global and domestic bullion markets

Under the new slab, those with an annual income of Rs 5.6 million to Rs 7 million will have to pay a fixed tax of Rs 9.76 million and a tax of 32 percent on the excess amount.

Similarly, a fixed tax of Rs. 1.424 million will be imposed on individuals with an annual income of more than Rs. 7 million and an income tax of 35 percent on additional income.

All new tax rates under the Finance Bill 2026 will be applicable from July 1, 2026 and will be applied equally to the salaried class and government employees.