CPD proposes raising tax-free income limit to Tk 400,000

The Centre for Policy Dialogue (CPD) has proposed increasing the annual tax-free income limit for individual taxpayers by Tk 50,000 to Tk 400,000 in the upcoming 2025-26 fiscal year. Currently, the tax-free income ceiling is Tk 350,000.

The research firm presented its proposals on the upcoming budget at a press briefing at its office in the capital’s Dhanmondi area on Sunday.

CPD executive director Fahmida Khatun, research director Khondaker Golam Moazzem, and distinguished fellow Mustafizur Rahman, among others, spoke on the occasion.

Currently, individual taxpayers are subject to progressive tax rates of 5, 10, 15, 20, and 25 per cent. There is no tax for a Tk 350,000 income, while the next Tk 100,000 is taxed at 5 per cent, the following Tk 400,000 at 10 per cent, the next Tk 500,000 at 15 per cent, the subsequent Tk 500,000 at 20 per cent, and the above is at 25 per cent.

However, the tax-free income limit is Tk 400,000 for female taxpayers and individuals over 65 years, while third-gender taxpayers and individuals with disabilities have an exemption up to Tk 550,000. For gazetted freedom fighters, the exemption limit is Tk 500,000.

Also, the minimum tax limit varies by location. For residents under the Dhaka and Chattogram city corporations, the minimum tax is Tk 5000, while Tk 4,000 for those in other city corporations; and Tk 3,000 for taxpayers outside city corporation areas.