India vs Pakistan Income Tax: India and Pakistan got freedom at the same time but the development trajectory of the two countries has been totally different. While India is the fourth-largest economy in the world, Pakistan is at the 26th place, still struggling to manage its day-to-day affairs on its own. It relies on loans and bailouts to survive. Yesterday, the Government of Pakistan presented its budget where it proposes sweeping changes in tax rates.
The Pakistani government has introduced significant adjustments to its tax policy for salaried individuals, providing substantial tax reductions of up to 80% for those in lower income brackets. In contrast, higher-income earners will see their tax relief capped at 3%.
Additionally, a new 5% tax is proposed for substantial annual pensions exceeding Rs 10 million. The government anticipates that initiatives such as the digital taxation framework, carbon levies, and strengthened tax enforcement on e-commerce and digital transactions will enable Pakistan to align with international financial regulatory standards.
Notably, when the Government of India presented its budget in February this year, it also announced tax relief for citizens. Those earning Rs 12 lakh or Rs 1.2 million annually are exempted from tax. The move brought a huge relief to Indian taxpayers. Now, if you wonder what are the tax rates in Pakistan compared to India, below are two tables showing the tax slabs in both countries:
Income Tax Rates In Pakistan
|
Monthly Income |
Annual Income |
Monthly Income Tax |
|
Rs 50,000 or less |
Rs 6,00,000 |
No tax |
|
Rs 50,001 to Rs 100,000 |
Rs 6,00,000 – Rs 12,00,000 |
1% of amount above Rs50,000 |
|
Rs 100,001 to Rs 183,333 |
Rs 12,00,000-Rs 21,99,990 |
Rs500 + 11pc of amount above Rs100,000 |
|
Rs 183,334 to Rs 266,667 |
Rs 22,00,000-Rs 32,00,000 |
Rs9,677 + 23pc of amount above Rs183,333 |
|
Rs 266,668 to Rs 341,667 |
Rs 32,00,000-Rs Rs 41,00,000 |
Rs28,833 + 30pc of amount exceeding Rs266,667 |
|
Rs 341,668 or more |
Rs 41,00,000 and more |
Rs51,333 + 35pc of amount exceeding Rs341,667 |
Income Tax Rates In India
|
Income Tax Slabs |
Income Tax Rates | |
|
Up to Rs. 4 lakh |
NIL | |
|
Rs. 4 lakh – Rs. 8 lakh |
5% |
No tax due to Rs 60,000 rebate |
|
Rs. 8 lakh – Rs. 12 lakh |
10% | |
|
Rs. 12 lakh – Rs. 16 lakh |
15% | |
|
Rs. 16 lakh – Rs. 20 lakh |
20% | |
|
Rs. 20 lakh – Rs. 24 lakh |
25% | |
|
Above Rs. 24 lakh |
30% |
So, here you can see that while those earning Rs 12 lakh pay no tax in India due to Rs 60,000 rebate, those earning Rs 6 lakh or more have to pay taxes in Pakistan.
