The government has provided a relief of up to 60% in tax liability for salaried class earning income in low bracket groups. A salaried person deriving income on account of salary upto Rs 41667/- in a month shall pay 60% less income tax with effect from July 01, 2015 as per Finance Bill 2015. According to a tax expert, besides salaried taxpayers earning taxable income from Rs 400,000 to Rs 500,000; other salaried earners have also been given tax relief under the Finance Bill 2015. When contacted, a senior tax official who requested anonymity confirmed that almost all salaried slabs have been given benefit in tax.
On average basis, the tax benefit comes to around Rs 3,000 per month. Salaried taxpayers earning taxable income from Rs 400,000 to Rs 500,000 are chargeable to tax at a rate of 5%. To provide relief to this class the rate of tax is proposed to be reduced to 2%. Non-Salaried individual taxpayers and Association of Persons earning taxable income from Rs 400,000 to Rs 500,000 are chargeable to tax at a rate of 10 %. To provide relief to these taxpayers the rate of tax is proposed to be reduced to 7 percent, official added.
A comparison of new slabs for salaried class with the old slabs revealed that the net relief of income tax to the extent of Rs 3,000 has been proposed on the salaried persons falling under all slabs as per Finance Bill-2015. Relief in tax can be compared with the help of the following table:
When contacted a tax lawyer told Business Recorder here on Saturday that as a result of new salary slabs, a reasonable chunk of salary portion has automatically been added to the take-home salaries of lower bracket salaried persons. This means there is ultimate increase in the monthly pay of salaried persons belonging to lower-income categories of salaried individuals in their take-home salary in August 2015 pertaining to the period of July 2015.
This tax lawyer elaborated that a salaried taxpayer means a person whose salary constitutes more than 50 percent of the total income. All perquisites, allowances or benefits subject to exclusion under Part-I of the Second Schedule to the Income Tax Ordinance 2001, are to be included in the taxable salary. Presently, introduced salary slabs shall be applicable for tax year 2016. For withholding purposes, these shall apply to salary paid on or after 1st day of July 2015.