Highlights from Budget 2024-25

Budget 2024-25

Finance Minister Muhammad Aurangzeb unveiled the federal budget for 2024-25 on Wednesday, with a total outlay of Rs. 18.9 trillion. Here are some of the key tax proposals introduced by the federal government:

Income Tax

Salaried Taxpayers

  • The income tax exemption threshold remains at Rs. 600,000 per annum.
  • Tax slabs are being revised.

Exporters

  • Exporters will now be taxed under normal tax at a rate of 29%, instead of the previous fixed tax rate of 1%.

Capital Gains

  • Capital gains on real estate and securities will be taxed at 15% for filers and 45% for non-filers.

Withholding Income Tax

  • There will be different tax rates for the transfer of immovable property depending on whether the filer submits their return on time, is delayed, or is a non-filer.

Advance Income Tax

  • The rate for non-filer distributors, wholesalers, dealers, and retailers will be increased from 1% to 2.25%.

Motor Vehicle Registration

  • Income tax on the registration of motor vehicles will shift from being based on engine capacity to vehicle value.

Sales Tax

  • Sales tax on textiles and leather will increase from a reduced rate of 15% to a standard rate of 18%.
  • A standard 18% sales tax rate will be applied to mobile phones.
  • A sales tax withholding regime will be introduced for bronze, coal, and plastic scrap.
  • Sales tax exemption on iron and steel scrap will continue.
  • The exemption for newly merged FATA/PATA districts will end.
  • The default surcharge rate will change from 12% to KIBOR + 3%.
  • Sales tax will be charged at the time of supply or when any payment is received by the supplier, whichever is earlier.
  • The concept of Best Judgment Assessment will be introduced in sales tax.
  • Electronic sales invoicing will become mandatory for all businesses.
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