Changes made in Income Tax in Federal Budget 2024-25

Income Tax Changes:

1. Personal Income Tax: The tax rates for non-salaried individuals and AOPs have been revised upwards from 35% to 45%.

2. Income Tax for Salaried Individuals: The tax rate remains at 35%. However, the incremental rates have been increased across different income slabs.

3. Advance Tax on Immovable Property Purchases: The rates have been adjusted as follows:

• Up to Rs. 50 million: 3% for filers, 12% for non-filers, and 6% for late filers.

• Between Rs. 50-100 million: 3.5% for filers, 16% for non-filers, and 7% for late filers.

• Over Rs. 100 million: 4% for filers, 20% for non-filers, and 8% for late filers.

4. Advance Tax on Immovable Property Sales: The rates have been adjusted as follows:

• Up to Rs. 50 million: 3% for filers, 10% for non-filers, and 6% for late filers.

• Between Rs. 50-100 million: 3.5% for filers, 10% for non-filers, and 7% for late filers.

• Over Rs. 100 million: 4% for filers, 10% for non-filers, and 8% for late filers.

5. Capital Gains on Properties: For properties acquired on or after July 1, 2024, the rates are 15% for filers and 15-45% for non-filers.

6. Capital Gains on Securities: For securities acquired on or after July 1, 2024, the tax

rate will be flat 15% for filers, and non-filers will be taxed at normal rates with a minimum of 15% and maximum of 45%.

7. Tax Rates on Dividend Income: For mutual funds earning 50% or more income from profit on debt, the tax rate on dividend has been increased from 15% to 25%.

8. Tax Rates on Capital Gains from Mutual Funds and REITs: The tax rate has been increased from 10% to 15%.

9. Profit on Debt: Non-Filers will now be paying tax at 35% on the interest income instead of 30%.

10. Super Tax: Super tax has been retained. However, high-income non-salaried individuals and AOPs face an effective rate of up to 55%.

11. Exporters: Exporters will be brought under the normal tax regime. However, 1% tax on export proceeds will be treated as a minimum tax (does not apply to IT exports).

12. Exemption Certificates: For withholding tax exemption certificates have been withdrawn, only reduced rate certificates will be issued in certain cases.

13. Penalties for Non-filers and Late Filers: Enhanced penalties have been introduced, including restrictions on foreign travel (except NICOP Holders, Minor & Students) and higher advance tax rates. Additional measures include blocking of mobile sim connections and discontinuation of utility connections.

14. Advance Tax on High-Value Assets: Increased rates for advance tax have been introduced on motor vehicles, property transactions, and other high-value assets.