Salaries up to 40 million tomans have been exempted from tax

According to the 1405 (2026-2027) budget bill, employees whose annual salary is less than 480,000 new rials (equivalent to 480 million Iranian tomans) are exempt from income tax. This corresponds to a monthly amount of 40,000 new rials or 40 million tomans.

As reported by ISNA, in the 1405 proposed budget submitted by the government to the Parliament, the annual income tax exemption limit under Article 84 of the Direct Tax Act has been increased from 288,000 new rials (288 million tomans) in 1404 to 480,000 new rials (480 million tomans) in 1405, which is equivalent to 40 million tomans per month.

The income tax rate on all types of salaries and benefits for government and non-government employees—including wages, salaries, allowances, job-related benefits, consulting fees, attendance fees, bonuses, performance incentives, overtime, welfare and motivational payments, teaching and research bonuses, and on-call fees—is set at zero.

For income exceeding 480,000 rials up to 960,000 rials, a 10% tax applies.
For income exceeding 960,000 rials up to 1,200,000 rials, a 15% tax applies.
For income exceeding 1,200,000 rials up to 14,400,000 rials, a 20% tax applies.
For income exceeding 14,400,000 rials up to 16,800,000 rials, a 25% tax applies.
For income exceeding 16,800,000 rials, a 30% tax applies.

All exemptions, zero tax rates, reduced tax rates, and other tax incentives for individuals and legal entities for fiscal year 1405 are set to zero, except for temporary exemptions specified under Article 81 of the Direct Tax Act and other relevant provisions, including the New Financial Instruments and Institutions Development Act and the Knowledge-Based Production Leap Act (approved 1402/02/01).

The taxable income threshold for individuals and legal entities has been reduced from 70 million rials in 1404 to 60 million rials in 1405.
The tax exemption and credit ceiling for legal entities under the Production and Infrastructure Finance Act (approved 1403/02/22) for fiscal year 1404 was set at 200 million rials./Isna