Finance Minister Muhammad Aurangzeb on Friday unveiled tax relief measures for four income slabs of salaried employees and announced the removal of the surcharge, following directives from Prime Minister Shehbaz Sharif, while presenting the 2026–27 Federal Budget in the National Assembly.
Speaking in the National Assembly, Aurangzeb said, “I am pleased to announce that under the prime minister’s guidance, our government will reduce tax rates for different income groups to ease the burden on employees.”
Tax Rate Reductions
According to the proposal, salaried individuals earning Rs2.2-3.2 million annually will see their tax rate reduced from 23% to 20%. Those with an income between Rs3.2-4.1m will have their tax rate cut from 30% to 25%.
Employees earning Rs4.1-5.6m annually will face a reduced tax rate of 29%, down from 35%. Meanwhile, salaried individuals with incomes between Rs5.6-7m will see their tax rate lowered from 35% to 32%.
Additional Measures
The finance minister also announced the removal of the surcharge on income tax, providing further relief to taxpayers. These measures are part of the government's efforts to stimulate economic growth and reduce the financial burden on the middle class.
