PTI govt proposes 10% increase in pensions

Slashes salaries of ministers by 10%; people earning Rs50,000 per month will have to pay tax

Irshad Ansari June 12, 2019

ISLAMABAD: The Centre has proposed an increase of 10 per cent in the pensions of retired government employees and in salaries of serving employees from Grade one to Grade 16 in the new budget.

During the budget speech in the National Assembly, Federal Minister for Revenue Hammad Azhar said, “The salaries of government employees from Grade 16-20 will be increased by 5%; however, there will be no increase in the salaries of government employees of grades 21 and 22.”

The minister said, “The minimum salary of a labourer has also been increased to Rs17,500, while salaries of ministers have been reduced by 10%.”

Azhar said, “The special conveyance allowance of the differently-abled persons has been revised upward from Rs1,000 to Rs2,000.”

The salaries of special private secretaries, private secretaries and assistant private secretaries working with ministers, ministers of state, parliamentary secretaries, additional secretary, and the joint secretary have been increased by 25%.

However, income tax exemption for the privileged people, including the army chief, president of Pakistan, prime minister and chief justice of Pakistan, will continue.

FBR Chairman Shabbar Zaidi confirmed that no change had been made in the second schedule for the privileged class.

On the other hand, the federal government has introduced a new tax slab for the salaried class under which the person receiving the highest salary will have to pay 35% income tax.

The salaried class earning up to Rs1.2 million per annum and were exempted from income tax will now have to pay it as the federal government has reduced the exemption limit to Rs600,000. “Now, the salaried persons earning more than Rs50,000 per month will have to pay tax,” Azhar added.

No income tax will be imposed on people receiving up to Rs600,000. From Rs600,000 to Rs1.2 million, 5% is the income tax, on the income of Rs1.8 million Rs30,000, has been fixed and on more than that 10%.

A fixed tax of Rs90,000 will be on income from Rs1.8 million to Rs2.5 million and on more than that, 15%.

For income from Rs2.5 million to Rs3.5 million, tax is fixed at Rs195,000 and for income. For income above Rs3.5 million, the tax will be 20%.

According to the budget document, in income between Rs5 million to Rs8 million, the tax is fixed at Rs670,000. From Rs8 million to Rs10 million, the tax is fixed at Rs1.245 million.

The document stated that on income from Rs10.20 million up to Rs30 million, the tax would be Rs2.345 million. A fixed tax of Rs7.295 million will be paid on income from Rs30 million to Rs50 million. On income from Rs50 million to Rs70.50 million, Rs3.2 million tax would be paid and on income above Rs70.50 million, Rs20.14 million.


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