KARACHI: Federal Board of Revenue (FBR) has issued withholding tax rates for salary income, which would be deducted by employers at the time of paying salary to the employees and will be applicable for tax year 2018/2019.
According to Withholding Tax Card – 2018, the FBR said that under Section 149 of Income Tax Ordinance, 2001, every person responsible for paying salary to an employee shall deduct tax from the amount paid.
Following are the rates of withholding tax:
1. Zero percent to be applicable where the taxable income does not exceed Rs400,000.
2. Rs1,000 [edit fixed tax on annual income] where the taxable income exceeds Rs400,000 but does not exceeds Rs800,000.
3. Rs2,000 [edit fixed tax on annual income] where the taxable income exceeds Rs800,000 but does not exceed Rs1,200,000.
4. 5 percent of the amount exceeding Rs1,200,000 where the taxable income exceeds Rs1,200,000 but does not exceed Rs2,400,000.
5. Rs60.000 + 10 percent of the amount exceeding Rs2,400,000 where the taxable income exceeds Rs2,400,000 but does not exceed Rs4,800,000.
6. Rs300,000 + 15 percent of the amount exceeding Rs4,800,000 where the taxable income exceeds Rs4,800,000.