Salaried taxpayers may receive partial relief as the federal government reviews several options, with one of them being paying Rs. 200 billion from its own pocket to make it possible in the upcoming FY27 budget
According to budget-related discussions, policymakers are considering options such as raising the tax exemption threshold, widening income brackets, or adjusting tax rates for salaried individuals.
The proposals remain under review and are not yet final, but are being assessed in light of rising cost-of-living pressures over the past two years.
Any reduction in the tax burden could come at a fiscal cost. Preliminary estimates shared by Topline Securities suggest that potential relief for salaried individuals, alongside possible corporate tax adjustments, could increase the government’s revenue gap by over Rs. 200 billion.
Alongside income tax reforms, officials are also considering selective welfare measures, including possible inflation-linked adjustments to cash transfer programs and a likely revision in the minimum wage.
However, some measures are considered unlikely to proceed, while taxes on property transactions are expected to remain unchanged.
