The Finance Bill for the next fiscal year includes new income tax rates for salaried workers that will go into effect on July 1, 2026.
According to sources, the final draft of the Finance Bill for the upcoming fiscal year will be presented in the National Assembly today for approval. A number of adjustments to tax rates and income tax brackets for salaried workers are proposed in the bill.
People who make up to Rs. 600,000 a year would remain free from income tax under the Finance Bill.
A 1% income tax will be imposed on people who make between Rs. 600,000 and Rs. 1.2 million annually under the new tax structure. A fixed tax of Rs. 6,000 and an 11% tax on income higher than Rs. 1.2 million would be paid by those making between Rs. 1.2 million and Rs. 2.2 million yearly.
Similarly, people who make between Rs. 2.2 million and Rs. 3.2 million a year would have to pay a fixed tax of Rs. 116,000 plus 20% tax on the amount exceeding Rs. 2.2 million, which is less than the previous rate of 23%.
According to the Finance Bill, people who earn between Rs. 3.2 million and Rs. 4.1 million annually will pay a fixed tax of Rs. 346,000 in addition to a 25% tax on income over Rs. 3.2 million. People who make between Rs. 4.1 million and Rs. 5.6 million a year would have to pay a set tax of Rs. 541,000 plus an additional 29% tax.
In addition, people who make between Rs. 5.6 million and Rs. 7 million a year will pay a set tax of Rs. 976,000 in addition to a 32% tax on income over Rs. 5.6 million. In addition to a fixed tax of Rs. 1.424 million, individuals who earn more than Rs. 7 million annually will also be subject to 35% income tax.
According to the government, the new tax slabs are intended to improve the efficiency of the tax system and provide salaried individuals with a more equitable tax structure.
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