India vs. Pakistan: Who Pays More Income Tax?

Poojitha Raam Vinay | Last updated: 21 June 2025

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While both India and Pakistan gained independence around the same time, their economic paths and tax systems have diverged significantly. As of 2024-25, India boasts a much larger economy and higher GDP per capita, with a faster growth rate. India's income tax system, particularly the new regime, offers a more favourable structure with a higher tax-free threshold and a standard deduction, making it more beneficial for low and middle-income earners. Pakistan, facing fiscal pressures, has implemented steeper tax hikes, resulting in a higher top marginal tax rate and less relief for its citizens.

India and Pakistan gained independence around the same time, yet their development paths have diverged significantly. As of 2024-25, India is the 5th largest economy in the world by nominal GDP, valued at approximately $4 trillion, and ranks 3rd globally by purchasing power parity (PPP) with a PPP GDP of over $14 trillion. In contrast, Pakistan ranks around 43rd-44th in the world by nominal GDP at approximately $340 billion, and about 24th by PPP, with a GDP of roughly $1.58 trillion. India's G

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About the Author

Poojitha Raam Vinay

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I simplify complex income tax, TDS, banking, and investment updates into practical insights for taxpayers, salaried professionals, pensioners, and senior citizens. I regularly write on ITR filing, tax compliance, savings schemes, and the latest financial rule changes in India.

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