Tax free income ceiling remains at Tk3.5 lakh
Govt maintains existing surcharge structure for wealthy individuals
The government has retained the tax-free income limit at Tk3.5 lakh for individual taxpayers for the fiscal year (FY25).
"I propose to keep the tax-free income thresholds of natural individual taxpayers and firms unchanged for the financial year (FY) 2024-25," said Finance Minister AH Mahmood Ali while placing the budget for the next fiscal
year (FY25) at Jatiya Sangsad (JS) Bhaban today.
At the same time, it is proposed to increase the existing maximum tax rate from 25% to 30% for natural individual taxpayers and firms with tax slab adjustments.
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According to today's budget proposal, for women and senior citizens aged 65 years or above, the limit is Tk4 lakh, physically challenged persons and members of the third gender Tk4.75 lakh and the freedom fighters Tk5 lakh.
However, the threshold would be increased for parents or legal guardians of physically challenged/adopted child by Tk50,000 for each child.
Mahmood Ali said the maximum tax free income threshold for individual taxpayers was Tk1.65 lakh in FY 2009-10, which has been increased to Tk3.50 lakh in FY2023-24 in a phased manner.
He said the tax-free income threshold is higher for women, senior citizens, physically challenged persons, members of the third gender and war wounded freedom fighters. "This has brought back some comfort in the life of ordinary taxpayers due to reduction in tax burden and encouraged tax payers to pay taxes regularly," he added.
Ali also proposed to retain the proposed tax rate for 2024-25 for the assessment year 2025-26 to facilitate the expansion of trade, improve investor confidence in the country's tax system and encourage local and foreign investment, thereby introducing a prospective tax system in Bangladesh. "I believe that through a prospective tax system, taxpayers can do proper tax planning and help increase tax compliance," the finance minister said.
He also proposed to keep the existing structure of minimum tax unchanged.
At present, the minimum tax applicable to taxpayers other than company taxpayers in Dhaka North, Dhaka South and Chattogram City Corporation is Tk5,000. For other City Corporations, it is Tk4,000. For other areas outside the City Corporation, minimum tax is Tk3,000.
Govt maintains existing surcharge structure for wealthy individuals
The government has decided to maintain the current surcharge structure for wealthy individual taxpayers, ensuring continuity in income distribution and economic development.
Currently, no surcharge is payable for net asset valued up to Tk4 crore. For assets exceeding Tk4 crore, a 10% surcharge is applied, and for those exceeding Tk50 crore, the surcharge rises to 35%.
The surcharge, collected as a percentage of the income tax based on net wealth, has been in place for many years.
