Explanatory Cirlcular on 'SUPPLEMENTARY FINANCE ACT, 2018'

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GOVERNMENT O'F PAKISTAN REVENUE DIVISION FEDERAL BOARD OF REVENUE ***** 
C.No.4(69)1T-Budget/2018-(PT-I) Islamabad, the 24th October, 2018. 
Circular No. 06 of 2018 Income Tax 

SUBJECT:- FINANCE SUPPLEMENTARY (AMENDMENT} ACT, 2018 EXPLANATION OF IMPORT ANT AMENDMENTS MADE IN THE INCOME TAX ORDINANCE, 2001. 

The Finance Supplementary (Amendment) Act, 2018 has brought about certain amendments in the Income Tax Ordinance, 2001. Some significant amendments are explained hereunder:- 

1. Amendment in tax rates for individuals (a) Salaried Individuals Through the Finance Act, 2018 rates for both salaried and non-salaried individuals were unified and threshold of taxable income was increased from Rs.400,000/- to Rs.1,200,000/-. However, a nominal tax rate of Rs.1000/- was imposed on income(s) between Rs.400,000/- to Rs.800,000/- whereas a nominal tax rate of Rs.2000/- was imposed on income(s) between Rs.800,000/- to Rs.1,200,000/-.Moreover, a tax rate of 5% was introduced for income(s) between Rs.1,200,000/- to Rs. 2,400,000/-, 10% for income(s) between Rs. 2,400,000/- to Rs.4,800,000/- and 15% for income(s) exceeding Rs.4,800,000/-. Through the Finance Supplementary (Amendment) Act, 2018 separate tax rates have once again been introduced for salaried and non-salaried individuals respectively which shall be effective from 1st July, 2018 onwards. The tax rates applicable to salaried individuals (i.e individuals whose income chargeable under the head saiary exceeds 50% of taxable income) w.e.f.1 st July, 2018 shall be as follows:-













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