Pakistan, June 3 -- ISLAMABAD - In a significant breakthrough, the International Monetary Fund (IMF) has agreed to two key demands from Pakistan: increasing the defence budget and providing tax relief to the salaried class, according to official sources.

The government successfully convinced the IMF that rising national security needs could not be delayed. As a result, the IMF accepted Pakistan's defence priorities and approved an increase in the upcoming fiscal year's defence budget.

At the same time, salaried individuals are set to benefit from lower tax rates across all income slabs. The IMF has agreed to raise the annual tax-free income threshold from Rs600,000 to nearly Rs1 million, increasing monthly tax-free income from Rs50,000 ...