Following are the relief measures that have been announced by Federal Board Of Revenue(FBR) in the budget 2018-19:


Increase in threshold of taxable income:

In accomplishment of the government’s strategy of giving help to the basic man and reducing the hardship of people having low earnings ,the Honorable Prime Minister in his press conference held  on 5 April,2018 reported that limit of TAX wage would be improved from Rs.400,000/ – to Rs.1,200,000/ – .

Therefore, the Income Tax (Amendment) Ordinance, 2018 [Ordinance No.V of 2018] was proclaimed on April 08, 2018.As for every this Ordinance the upgraded limit of taxable salary might apply with impact from first July, 2018.


Reduction in tax rates for individuals:
 
Individuals Non-Salaried Salaried
Taxable Slabs 7 11
Tax Rate Of Highest Slab 35 30

In accomplishment of the policy announced by the Prime Minister the Income Tax (Amendment) Ordinance, 2018 [Ordinance No. V of 2018] was promulgated on April 08, 2018.In order to provide relief to individuals, the maximum tax rate for all individuals has been slashed to 15% and 5 taxable slabs for all individuals have been initiated including a nominal tax slab of Rs.1000/- for persons earning income exceeding Rs.400,000/- upto Rs.800,000/- and another nominal income tax slab of Rs.2000/- for persons earning income exceeding Rs.800,000/- upto Rs. 1,200,000/-.


Reduction in corporate tax rates:

In order to uphold and incentivize companies and augment the competitiveness , the corporate tax rates shall be reduced from 30 percent in Tax Year 2018 to 25 percent in Tax Year 2023.The corporate tax rate will be 29 percent in Tax Year 2019 and will be reduced by 1 percent each year upto Tax Year 2023. i.e the corporate tax rate shall be 29 percent for Tax Year 2019, 28 percent for Tax Year 2020, 27 percent for Tax Year 2021, 26 percent for Tax Year 2022 and 25 percent for Tax Year 2023.


Reduction in Tax Rates for Association of Persons:

Ensuing to lessening of tax rates for people through the Income Tax (Amendment) Ordinance, 2008, the tax rates for Association of Persons have turned out to be extensively higher contrasted with those for people which places the AoPs in a disadvantageous position. The current edge of taxable wage for AoPs is Rs.400,000 and there are seven dynamic tax sections with the most astounding piece having an expense rate 35 percent. So as to guarantee reasonable and fair treatment and to support organizations framed as AoPs the most elevated tax rate for AOP’s has been diminished to 30 percent and the current seven chunks have been decreased to six sections as under:-


Taxable Income Exceeds(Rs.) Doesnot Exceed(Rs) Tax Rate
1.   400,000 0%
2. 400,000 1,200,000 5% on exceeding amount
3. 1,200,000 2,400,000 Rs.40,000 +10% on exceeding amount
4. 2,400,000 3,600,000 Rs.160,000+15% on exceeding amount
5. 3,600,000 4,800,000 Rs.340,000+20% on exceeding amount
6. 4,800,000 6,000,000 Rs.580,000+25% on exceeding amount
7. 6,000,000   Rs.880,000+30% on exceeding amount

Institution of tax reforms in the real estate sector:

Far reaching tax changes have been imagined for streamlining the issues identified with the real estate segment. The remarkable highlights of such tax changes are as under:-

 
  1. Property exchanges might be recorded at the esteem announced by the purchaser and the dealer.
  2. Property rates advised by FBR (with the end goal of gathering of tax at a bargain buy of property) and DC rates are to be canceled.
  3. At the Federal level , a one percent flexible propel tax from the buyer on the pronounced esteem should be gathered and this expense might supplant the current withholding charge on dealers and buyers of property.
  4. Non-filers should not be allowed to buy property having proclaimed esteem surpassing four million rupees.
  5. Provinces should be asked for to annul the commonplace rates for the gathering of stamp obligation (generally known as DC rates) and to gather an aggregate of one percent charge under stamp obligation and capital esteem tax on the esteem pronounced by the purchaser and the vender of property.
  6. Keeping in mind the end goal to hinder under-revelation and resulting loss of income, FBR might have the privilege to buy any property inside a half year of enrollment by paying a specific sum far beyond the pronounced esteem which might be 100 percent in the monetary year 2018-19, 75 percent in the financial year 2019-20 and 50 percent in the financial year 2020-21 and from that point.

With a specific end goal to actualize the above measures, empowering arrangements might be joined in the Income Tax Ordinance, 2001. Point by point procedure(s) and the date of coming into power of the above measures might be advised later.


Reduction in tax rate on undistributed profit:

By and by under segment 5A of the Income Tax Ordinance, 2001 public organizations are obliged to distribute no less than 40 percent of their after tax benefits through money or issuance of extra offers within a half year of the finish of the budgetary year, falling flat which such organizations are subjected to charge @ 7.5 percent of their bookkeeping benefit (before impose). With a specific end goal to make a harmony between protecting the enthusiasm of investors and in addition encouraging capital development through maintenance of corporate benefit income for future speculations, the state of distributing 40 percent of after tax benefits is being decreased to 20 percent and the pertinent tax rate on accounting benefit if there should arise an occurrence of inability to convey such profit is being lessened from 7.5 percent to 5 percent.


Extension of tax credits upto 30th June, 2021:

Tax credit under segment 65B is accessible to organizations with the end goal of augmentation, development, adjusting, modernization and substitution of plant and machinery at the rate of 10 percent of the sum contributed. Further, tax credit under segment 65D is accessible to organizations setting up another mechanical endeavor for a time of five years. Tax credit under segment 65E is accessible to organizations for the buy and establishment of plant and machinery through no less than 70 percent new value. The above tax credits can be profited by organizations making speculations upto 30.6.2019. Keeping in mind the end goal to boost speculation and setting up of mechanical endeavors/fabricating concerns such expense credits are being stretched out for two more years upto 30th June, 2021.


Revamping the mechanism of Alternative Dispute Resolution:

The idea of alternative dispute resolution was acquainted with give a road to the quick settlement of debate amongst FBR and taxpayers and to decrease the high pendency of cases at different re-appraising gatherings. By and by, the proposal of the Alternative Dispute resolution board of trustees isn’t official upon the citizen or FBR, hence it has not been viable in alleviating the hardship of citizens who are still constrained to experience an extended suit process. In an offer to make the system of ADRC viable, the choice of the ADRC board of trustees has been made authoritative upon both the citizen and additionally the office according to withdrawal of advances by the citizen and also the office. The piece of the individuals from ADRC might likewise be changed to empower resigned High Court Justices and tax experts to be incorporated into the Committee notwithstanding agents of FBR. Compensation for the individuals from the ADRC might be as recommended under the Income Tax Rules ,2002.