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Individual - Significant developments
Last reviewed - 24 August 2026Major developments in the tax laws through Finance Act, 2026 relating to individuals are summarised as follows:
- The income tax slab rates for salaried individuals have been revised, reducing the tax burden for salaried taxpayers, while retaining the maximum tax rate of 35% (please see the Taxes on personal income section for details).
- The surcharge on salary income exceeding PKR 10 million has been abolished; however, it continues to apply to non-salaried individuals and AOPs (please see the Taxes on personal income section for details).
- Section 7E, relating to tax on deemed income from immovable property, has been abolished following the decision of the Federal Constitutional Court declaring the provision ultra vires (please see the Other taxes section for details).
- The Capital Value Tax (CVT) on foreign assets of resident individuals has been abolished.
- A new 5% withholding tax has been introduced on income earned by digital content creators and social media influencers through banking channels or payment intermediaries (please see the Income determination section for details).
- Advance tax on foreign remittances made through debit, credit and prepaid cards has been reduced from 5% to 0.5%.
- A new tax has been introduced on life insurance and family takaful policy proceeds to the extent they exceed the aggregate premiums paid. Proceeds received after four years, or on death or disability of the insured, remain exempt from this tax (please see the Income determination section for details).
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Advance tax on the purchase and sale of immovable property has been rationalised through the replacement of slab-based tax rates with uniform rates of 1.25% for buyers and 2.75% for sellers (please see the Income determination section for details).
- Algorithmic settlement, faceless tax administration, an Independent Case Scrutiny Committee, and enhanced financial-data reporting through banking channels have been introduced to strengthen data-driven tax administration (please see the Tax administration section for details).
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