Finance Minister Muhammad Aurangzeb on Friday announced significant tax relief for salaried individuals while presenting the Federal Budget 2026-27 in the National Assembly. The measures, introduced on the directives of Prime Minister Shehbaz Sharif, aim to reduce the tax burden on employees and provide financial relief to the middle-income segment.
Addressing lawmakers, Aurangzeb said the government had decided to lower income tax rates for several salaried income brackets. Individuals earning between Rs2.2 million and Rs3.2 million annually will now pay a tax rate of 20%, down from the previous 23%.
Similarly, taxpayers earning between Rs3.2 million and Rs4.1 million per year will see their tax rate reduced from 30% to 25%. For those earning between Rs4.1 million and Rs5.6 million annually, the tax rate has been lowered from 35% to 29%.
Employees with annual incomes ranging from Rs5.6 million to Rs7 million will also benefit from a reduction in tax rates, which have been cut from 35% to 32%.
The finance minister also announced the complete abolition of the surcharge on salaried individuals, describing it as a major relief measure. He noted that the surcharge had already been reduced from 10% to 9% last year and that the government has now proposed removing it entirely.
While presenting the budget, Aurangzeb said Pakistan had reached a point where its voice was being heard globally and its friendship was valued internationally. He highlighted recent developments in foreign policy and national security, stating that Pakistan had responded strongly to Indian aggression and that Operation Bunyanum Marsoos had been a significant success.
The minister further claimed that Pakistan had achieved important diplomatic gains in recent months and played a role in encouraging dialogue between the United States and Iran aimed at reducing regional tensions.
