Summary
- Sources said tax concessions are being considered for individuals earning more than Rs183,000 per month.
- Under one proposal, the tax rate for those earning up to Rs267,000 per month could be reduced by five percentage points, bringing the rate down from 25 percent to 20 percent.
- A tax rate of 29 percent has been proposed for monthly incomes of up to Rs467,000, while individuals earning up to Rs583,000 per month may face a tax rate of 32 percent.
The federal government is considering a significant tax relief package for salaried individuals in the upcoming Budget 2026-27, with proposals aimed at reducing the tax burden on middle- and upper-income earners. According to informed sources, the relief measures could provide benefits worth nearly Rs50 billion and are expected to impact hundreds of thousands of employees across the country.
As part of the proposed reforms, the government is reviewing changes to the existing income tax structure, including increasing the number of tax slabs from six to eight. The move is intended to create a more balanced taxation system and offer greater relief to salaried taxpayers.
Sources said tax concessions are being considered for individuals earning more than Rs183,000 per month. Under one proposal, the tax rate for those earning up to Rs267,000 per month could be reduced by five percentage points, bringing the rate down from 25 percent to 20 percent. Around 400,000 salaried employees are expected to benefit from this adjustment.
The government is also examining revised tax rates for higher income brackets. A tax rate of 29 percent has been proposed for monthly incomes of up to Rs467,000, while individuals earning up to Rs583,000 per month may face a tax rate of 32 percent.
For top earners, the maximum income tax rate of 35 percent is likely to remain unchanged. This rate would continue to apply to individuals with annual incomes exceeding Rs7 million.
In another possible relief measure, the government is considering abolishing the surcharge currently imposed on taxpayers earning more than Rs10 million annually. The proposal is aimed at simplifying the tax regime and addressing concerns raised by high-income taxpayers and business groups.
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