Budget insights 2024-25: personal taxes

WEB DESK: The federal government announced the annual budget for fiscal year 2024-25 on Wednesday. Here is everything you need to know about taxes on your personal income and expenditures:

PERSONAL INCOME TAX

For the upcoming fiscal year, the government has made several changes to the personal income tax structure:

Federal Budget FY 2024-25: Let’s Talk Taxes! (Corporate Edition)

Non-Salaried Individuals: (annual income)

– Income up to Rs 600,000: No tax
– Income between Rs 600,000-1,200,000: 15% on the amount exceeding Rs600,000
– Income between Rs 1,200,000-1,600,000: Rs90,000 plus 20% on the amount exceeding Rs1,200,000
– Income between Rs 1,600,000-3,200,000: Rs170,000 plus 30% on the amount exceeding Rs1,600,000
– Income between Rs 3,200,000-5,600,000: Rs650,000 plus 40% on the amount exceeding Rs3,200,000
– Income above Rs 5,600,000: Rs 1,610,000 plus 45% on the amount exceeding Rs5,600,000

Salaried Individuals: (annual income)

– Income up to Rs 600,000: No tax
– Income between Rs 600,000-1,200,000: 5% on the amount exceeding Rs600,000
– Income between Rs 1,200,000-2,200,000: Rs 30,000 plus 15% on the amount exceeding Rs1,200,000
– Income between Rs 2,200,000-3,200,000: Rs 180,000 plus 25% on the amount exceeding Rs2,200,000
– Income between Rs 3,200,000-4,100,000: Rs 430,000 plus 30% on the amount exceeding Rs3,200,000
– Income above Rs 4,100,000: Rs 700,000 plus 35% on the amount exceeding Rs4,100,000

A new category of late-filers has been introduced to encourage timely filing of tax returns. The punitive measures for late-filers are less stringent than those for non-filers. Late-filers, who are defined as those filing returns late to avoid non-filer rates, will face higher tax rates than filers but lower than non-filers.

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TAX ON IMMOVABLE PROPERTY

The budget sets different tax rates for purchasing and selling immovable properties for filers, late-filers, and non-filers:

Purchase of Property:

– Filers: 3% for property up to Rs50 million, 3.5% for Rs 50-100 million, 4% for above Rs 100 million
– Late-filers: 6% for property up to Rs 50 million, 7% for Rs 50-100 million, 8% for above Rs 100 million
– Non-filers: 12% for property up to Rs 50 million, 16% for Rs 50-100 million, 20% for above Rs 100 million

Sale of Property:

– Filers: 3% for property up to Rs 50 million, 4% for Rs 50-100 million, 5% for above Rs 100 million
– Late-filers: 6% for property up to Rs 50 million, 7% for Rs 50-100 million, 8% for above Rs 100 million
– Non-filers: 10% for any property value

Additionally, there will be a flat 15% tax on gains from the disposal of immovable property acquired on or after July 1, 2024, by filers. Non-filers will face progressive rates with a minimum of 15%.

TAX ON SALE OF SHARES

For the sale of shares, non-filers will face a tax rate of up to 35%, while filers will be taxed at a lower rate of 15%.

TAX ON VEHICLES

The government has adjusted the tax rates on vehicles, moving away from engine capacity to the vehicle’s value:

Up to 850cc: 0.5% of the value
851cc to 1000cc: 1% of the value
1001cc to 1300cc: 1.5% of the value
1301cc to 1600cc: 2% of the value
1601cc to 1800cc: 3% of the value
1801cc to 2000cc: 5% of the value
2001cc to 2500cc: 7% of the value
2501cc to 3000cc: 9% of the value
Above 3000cc: 12% of the value

The previous tax concessions on hybrid vehicles to support local manufacturing have also been removed in this budget.

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TAX ON MOBILE PHONES

A flat 18% sales tax will apply to mobile phones valued up to $500, with higher rates for phones above this value:

– Imported completely built units above $500: 25%
– Imported semi-built and locally manufactured units above $500: 18%

OTHER TAXES ON PERSONAL EXPENDITURES

Sales Tax:

– 10% on imported personal computers, laptops, and notebooks
– 10% on many stationery items
– 10% on newsprint and books
– 10% on local supply of vermicelli, sheermal, bun, and rusk, excluding those sold in Tier-1 retailer bakeries and sweet shops
– 10% on local supply of poultry and cattle feed