Revised salaried tax rates shake middle-income brackets

By MG News | June 12, 2024 at 08:35 PM GMT+05:00

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June 12, 2023 (MLN): Almost all income tax slabs for salaried individuals have been revised, resulting in significantly higher taxation across all income levels, as per the amended Finance Bill 2024.

	New		Previous
	Taxable Income	Tax %	Taxable Income	Tax %
1	≤600,000	0	≤600,000	0
2	600,001-1,200,000	5% of amount exceeding Rs600,000	600,001-1,200,000	2.5% of amount exceeding Rs600,000
3	1,200,001-2,200,000	Rs30,000 + 15% of amount exceeding Rs1,200,000	1,200,001-2,400,000	Rs15,000 + 12.5% of amount exceeding Rs1,200,000
4	2,200,001-3,200,000	Rs180,000 + 25% of amount exceeding Rs2,200,000	2,400,001-3,600,000	Rs165,000 + 22.5% of amount exceeding Rs2,400,000
5	3,200,001-4,100,000	Rs430,000 + 30% of amount exceeding Rs3,200,000	3,600,001-6,000,000	Rs435,000 + 27.5% of amount exceeding Rs3,600,000
6	>4,100,000	Rs700,000 + 35% of amount exceeding Rs4,100,000	>6,000,000	Rs1,095,000 + 35% of amount exceeding Rs6,000,000

The income tax exemption for the first slab, which includes annual salaries of up to Rs600,000, will remain unchanged.

However, other income slabs have been changed, with the maximum income tax slab category reduced significantly from Rs6 million to Rs4.1 million.

No tax for income below Rs600,000 per year (Rs50,000 per month).
Tax for income between Rs600,001 to Rs1,200,000 per year (Rs50,000 to Rs100,000 per month) will be 5% (prev. 2.5%) of the amount exceeding Rs600,000.
Tax for those earning between Rs1,200,001 to Rs2,200,000 (Rs100,000 to Rs183,333 per month) will be Rs30,000 plus 15% of the amount exceeding Rs1.2m.
People earning Rs2,200,001 to Rs3,200,000 a year (Rs183,333 to Rs266,667 per month) will pay Rs180,000 plus 25% of the amount exceeding Rs2.2m.
Those earning Rs3,200,001 to Rs4,100,000 a year (Rs266,667 to Rs341,667 per month) will pay Rs430,000 plus 30% of the amount exceeding Rs3.2m.
For individuals earning more than Rs4,100,000 a year (more than Rs341,667 per month) will pay Rs700,000 plus 35% of the amount exceeding Rs4.1m.

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