The Senate Panel proposes tax exemption for annual income up to RS1.2 million.

Senate Standing Committee for Funding has recommended to exempt income tax for individuals earning up to RS1.2 million a year. In addition, it approved a proposal to increase the limit of property purchases from non-file from 130 percent to 500 percent of their declared assets.

The committee met under the presidency of Senator Saleem Mandviwala on Wednesday and conducted a sectional review of Finance Bill 2025.

During the meeting, FBR officials stated the committee that a new section has been introduced in the financial proposal to bring e-commerce companies and recreational clubs into the tax network.

FBR officials stated that a tax under the new budget is charged a tax on income from online academies and teachers, some of which earn up to the RS30 million annually.

FBR chairman Rashid Langrial informed the committee that individuals with an annual income of RS1.2 million would be responsible for paying RS12,500 in annual taxes. He also said that the supplement on income over RS10 million has been reduced from 10 to 9 percent.

Langrial further stated that recreational clubs, including the Islamabad club, would be taxed under the proposed bill. This proposal was the opposite of committee chairman Mandviwala, who argued against tax clubs.

However, the FBR chairman claimed that these clubs are exclusive to a privileged few and do not earn the public.

FBR officials also suggested restrictions on non-file, including limits on the purchase of property and vehicles. Originally, a limit of 130 percent was proposed for the purchase of property, but Senator Mohsin Aziz suggested to increase it and claimed that a non-FILER with RS10 million in declared assets should be allowed to buy property worth RS50 million.

After considering, the committee approved the committee to raise the property purchase limit for non-file from 130 percent to 500 percent.

Senator Shibli Faraz maintained that no tax should be imposed on wages up to RS1.2 million and claimed that an RS100,000 monthly income is equivalent to only RS42,000 under today’s financial conditions.

The committee rejected the imposition of taxes on individuals earning up to RS1.2 million annually and at small online companies.

Prime Minister for Financing Bilal Azhar Kiyani said taxes would apply when income exceeds the expenses and emphasized that this measure is targeted at the privileged class.

Finance Minister Muhammad Aurangzeb added that sanctions for non-file were increased last year and that efforts are underway to bring non-file into the taxi.

A new section, 17C, has been added to Finance Bill 2025, during which online marketplaces dealing with e-commerce will be taxed. Individuals who provide services through the Internet and electronic networks such as music, audio and video streaming platforms, cloud services, online software, telemedicine and e-learning-will also be subject to taxation.

In addition, online banking, architectural design, research and consulting, digital accounting and other digital services are taxed. However, the committee rejected a proposal to tax small online companies.