Islamabad: Finance Minister Muhammad Aurangzeb has presented the federal budget for 2024-25, featuring a total outlay of Rs. 18.9 trillion.

This comprehensive budget introduces several critical tax changes impacting various sectors and taxpayers. Here’s an in-depth look at the significant highlights and implications of Budget 2024-25.

Income Tax Revisions

Salaried Taxpayers:

– The income tax exemption limit remains at Rs. 600,000 per annum.

– Revised tax slabs are set to impact salaried individuals, with specific details yet to be outlined. However, there is a significant impact of taxes on salaried class. The taxes on salary class is double the tax for the previous year.

Exporters Tax:

– Exporters will now be taxed at a normal rate of 29%, a substantial increase from the previous fixed tax rate of 1%.

Capital Gains Tax:

– The capital gains tax on real estate and securities is set at 15% for filers and a hefty 45% for non-filers.

Withholding Income Tax:

– Separate tax rates will apply based on the timely filing of returns for the transfer of immovable property.

– Advance income tax for non-filer distributors, wholesalers, dealers, and retailers will rise from 1% to 2.25%.

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Motor Vehicle Registration:

– Income tax on motor vehicle registration will now be based on the vehicle’s value instead of engine capacity.

Sales Tax Adjustments

Textiles and Leather:

– The sales tax rate on textiles and leather will increase from 15% to the standard 18%.

Mobile Phones Tax:

– A standard 18% sales tax will now apply to mobile phones.

New Withholding Regimes:

– Sales tax withholding will be introduced for bronze, coal, and plastic scrap.

Exemptions and Changes in Budget 2024-25:

– Iron and steel scrap will continue to be exempt from sales tax.

– The newly merged districts of FATA/PATA will no longer enjoy sales tax exemptions.

Other Key Changes in Budget 2024-25:

Default Surcharge:

– The default surcharge rate will change from 12% to KIBOR+3%.

Timing of Sales Tax:

– Sales tax will be charged at the time of supply or upon receipt of payment, whichever occurs first.

Best Judgment Assessment:

– A new concept of Best Judgment Assessment has been introduced in sales tax regulations.

Electronic Sales Invoicing:

– Mandatory electronic sales invoicing will be required for all suppliers.

Good News of Budget 2024-25:

– Salary of govt employees has been proposed to be raised by 25% and pension of retired employees to raised by 15%

– Minimum wage has been proposed to be raised to Rs 37,000

– No additional tax on solar panels, net metering has been proposed.

– Commercial manufacturing of solar panels has been proposed to be incentivized.

The 2024-25 budget brings about significant changes in tax structures, impacting salaried individuals, exporters, and various industries. The revised income tax slabs, increased sales tax rates, and new compliance requirements are set to affect the economic landscape.