Govt Announces Tax Relief for Four Salaried Class Slabs in FY2026-27 Budget

The federal government has announced tax relief for four salaried class income slabs in the FY2026-27 budget, proposing reduced income tax rates for individuals earning between Rs2.2 million and Rs7 million annually.

Finance Minister Muhammad Aurangzeb presented the budget proposals in the National Assembly, saying the government had moved to ease the burden on salaried taxpayers. The proposed changes are part of the Finance Bill 2026 and will take effect after parliamentary approval.

Under the proposal, tax rates have been reduced for four higher salary slabs, while lower income slabs remain unchanged.

 

 

The government has also proposed abolishing the surcharge on the salaried class. The surcharge had previously been reduced from 10% to 9%, and the new budget proposal seeks to remove it completely.

According to the proposed structure, salaried individuals earning up to around Rs183,000 per month will not see a change in tax slab rates, as the lower slabs remain unchanged. The annual tax-free threshold of Rs600,000 has also been retained.

Officials have presented the move as part of broader relief measures for salaried workers, who have repeatedly raised concerns over rising tax pressure, inflation, and limited disposable income.

The revised rates will apply only after the Finance Bill is passed by the National Assembly and signed into law. If approved, the new tax structure will come into effect from July 1, 2026, with the start of the new fiscal year.

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