Here’re Six New Tax Slabs Proposed for Salaried Individuals in Budget 2025–26

Government Proposes New Income Tax System for Salaried People in FY 2025–26

The federal government has suggested a new income tax system for salaried individuals in the draft Finance Bill for the year 2025–26. This new plan has six tax brackets and is designed to make the tax fairer for people with different income levels.

Here’s how the proposed tax works:

• If you earn up to Rs. 600,000 a year, you don’t have to pay any income tax. You are completely tax-free.
• If you earn between Rs. 600,001 and Rs. 1.2 million a year, you will pay only 1% tax, but only on the amount above Rs. 600,000. The rest stays tax-free.
• If your income is between Rs. 1.2 million and Rs. 2.2 million, you will pay a fixed tax of Rs. 6,000, plus 11% on the amount above Rs. 1.2 million.
• If you earn between Rs. 2.2 million and Rs. 3.2 million, you’ll pay Rs. 116,000 as fixed tax, and then 23% on whatever you earn above Rs. 2.2 million.
• If your salary is between Rs. 3.2 million and Rs. 4.1 million, you’ll pay Rs. 346,000 as fixed tax, plus 30% on the income above Rs. 3.2 million.
• If you earn more than Rs. 4.1 million a year, you fall in the highest tax bracket. You’ll pay a fixed tax of Rs. 616,000, and 35% on any income above Rs. 4.1 million.

This new tax plan is meant to give relief to low-income earners while collecting more tax from people who earn more. It aims to make the tax system fairer and more balanced.