The new fiscal year has brought significant changes in taxation for salaried individuals, effective from July 1 under the Finance Bill 2024.
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These changes aim to increase revenue through varied tax rates and fixed taxes based on income brackets:
- Individuals earning up to Rs50,000 per month or Rs600,000 annually are exempt from income tax.
- Monthly incomes up to Rs100,000 face a 5% income tax rate, applicable to annual incomes from Rs600,000 to Rs1.2 million, resulting in a monthly tax increase from Rs1,250 to Rs2,500.
- Those earning between Rs1.2 million and Rs2.2 million annually will be subject to a 15% income tax rate and a fixed tax of Rs30,000 annually.
- Individuals earning Rs183,344 per month will now pay 15% tax, equivalent to a monthly tax of Rs15,000, up from Rs11,667.
- Annual incomes from Rs2.2 million to Rs3.2 million will face a 25% income tax rate, plus a fixed tax of Rs180,000 annually.
- Individuals earning Rs267,667 per month will pay 25% tax, translating to a monthly tax of Rs36,083, up from Rs28,770.
- Incomes ranging from Rs3.2 million to Rs4.1 million annually will be taxed at 30%, along with a fixed tax of Rs430,000 annually.
- Individuals earning Rs341,667 per month will now pay a monthly 30% tax of Rs58,333, up from Rs47,408.
- Salaries above Rs4.1 million per annum will face a maximum tax rate of 35% and a fixed tax of Rs700,000 annually.
- Individuals and Associations of Persons (AOPs) earning over Rs10 million are subject to a 10% surcharge.
These new tax measures are expected to impact disposable incomes, especially for higher earners, aiming to boost government revenue collection as part of broader fiscal policies outlined in the Finance Bill 2024.
