Budget FY27 eases tax burden on salaried individuals

June 12, 2026 (MLN): The federal budget for FY2026-27 has proposed revised income tax slabs for salaried individuals, offering relief across several income brackets through reduced rates compared to the outgoing fiscal year.

In a major move to reduce the tax burden, the government has also completely abolished the income tax surcharge on the salaried class, which has been dropped to zero.

Under the proposed structure, the first slab annual income up to Rs600,000 remains exempt from tax.

For those earning between Rs600,000 and Rs1,200,000 annually, a tax of 1% of the amount exceeding Rs600,000 will apply.

Salaried individuals earning between Rs1,200,000 and Rs2,200,000 will be liable to pay Rs6,000 plus 11% of the amount exceeding Rs1,200,000.

The budget proposes meaningful rate reductions across middle and upper-middle income brackets, as follows:

Individuals earning above Rs7,000,000 will pay Rs1,424,000 plus 35% of the amount exceeding Rs7,000,000, unchanged from the previous year.

Additionally, for the workforce, the budget proposes a 7% salary increase for government employees and a 10% increase in the minimum wage

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