Tax term

Tax slab

An income band with a threshold, rate, and sometimes a fixed tax amount.

Both halves of a slab are routinely misread: the band carries a rate, and in Pakistan’s salaried tables it also carries a fixed amount representing the tax already computed on everything below that band. The fixed amount is not an extra charge stacked on other figures, and the rate applies only above the band’s lower limit. The 2026-27 schedule carries eight bands, from nothing up to Rs 600,000, through Rs 6,000 plus 11% of the excess above Rs 1,200,000, up to Rs 1,424,000 plus 35% above Rs 7,000,000. Continuity is the test that a table was copied correctly: at Rs 4,100,000 the band below gives Rs 316,000 plus 25% of Rs 900,000, exactly the Rs 541,000 the next band declares. Mistakes are applying one rate to all income and borrowing the salaried bands for a business or AOP return. Verify against the enacted First Schedule for the year with FBR.

Check the legal meaning in context and against the relevant tax year.