The tax rates for non-salaried individuals and associations of persons and salaried individuals have changed. There is no income if annual income is up to Rs.600,000. Beyond this threshold, tax rates for non-salaried individuals have five taxable slabs with progressive tax rates ranging from 15% to 45%. For salaried individuals, beyond the threshold of Rs.600,000 per annum, there are five taxable slabs ranging from 5% to 35%.
At present, non-filers are subjected to higher tax rates to make their cost of doing business higher as well as to compel them to file their returns. Now a new tax rate for a new category of persons who are late filers i.e. they become filers after the due date of filing of return only for the sake of a specific transaction to avoid higher rates for non-filers. For such late filers a new tax rate is being introduced which is higher rate as compared to filers but lower than the non-filers.
Capital Gains on Sale of Securities:
At present, capital gains on sale of securities is taxed on the basis of holding period with maximum rate at 15% and no tax if the holding period exceeds 06 years. Now, for the securities acquired on or after 01 July, 2024, the capital gain on sale of such securities will be taxed at flat rate of 15% for filers, and for non-filers, the gain will be taxed at normal rates with minimum rate of 15% and maximum rate of 45%. Further capital gains income from mutual funds and collective investment schemes is also enhanced from 10% to 15%.
Dividend Income from Mutual Funds:
Dividend income from mutual funds is taxed @ 15% at present. However, in order to reduce the arbitrage between individual persons deriving income from profit on debt and persons earning dividend income from mutual funds deriving income from profit on debt, it is proposed that rate of dividend derived from a mutual fund which earns 50% or more of its income from profit on debt be enhanced from 15% to 25%.
Higher Tax Rates for Non-Filers Earning Income from Profit on Debt:
Advance tax rate on profit on debt for non-filers is being enhanced from 30% to 35% to increase cost of non-compliance.
Income Tax on Immovable Properties:
Progressive tax rates on purchases and sales of properties, categorized into three categories, namely, one, filers, two, late-filers, and three, non-filers.
On purchase of property by filers, the rates of tax would be 3% for values of properties up to 50 million, 3.5% for values of properties between 50 million and 100 million, and 4% for value of properties above 100 million. Late-filers would face slightly higher rates: 6%, 7%, and 8% respectively for the same property value brackets. Non-filers would experience significantly higher rates, set at 12% for properties up to 50 million, 16% for 50-100 million, and 20% for properties exceeding 100 million.
The proposed progressive advance tax rates at source for filers on sale of immovable property are 3% for properties valued up to 50 million. For properties valued between 50 million and 100 million, the withholding tax rate is 4%, and for properties valued above 100 million, the rate is 5%. For non-filers, the rate is 10% for properties of any value. Further, for late filers, the rate of tax will be 6%,7% and 8% respectively depending on the value of property.
A flat 15% rate of tax on gains from the disposal of immovable property acquired on or after 01st July, 2024 by filers regardless of the holding period is proposed, and for non- filers, progressive tax rates based on the prescribed slab rates in Division I of Part I of the First Schedule, with a minimum tax rate of 15% is proposed.
