Sources say that the federal government is seriously considering increasing the annual income tax exemption limit from Rs600,000 to Rs1,000,000. If approved, this change will take effect from July 1, 2025, meaning anyone earning up to Rs1,000,000 per year would pay zero income tax.

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This move is expected to benefit millions of salary-based workers and low-income families who are already struggling with rising inflation and financial pressure. Currently, people earning between Rs600,000 and Rs1,000,000 per year have to pay income tax, often facing monthly deductions that affect their daily lives.

International financial institutions like the IMF and World Bank have also acknowledged in recent reports that Pakistan’s salaried class is under unfair tax pressure compared to other segments. Experts believe this step could not only bring financial ease to the people but also boost trust in the government and give a positive push to the economy.

The final decision on this tax reform is expected to be announced officially in the next few weeks as part of the federal budget.