The government has proposed no increase in the annual tax-free income limit for individual taxpayers in the national budget for the 2025–26 fiscal year, despite ongoing high inflation.
In the budget, finance adviser Salehuddin Ahmed announced that the tax-free income threshold for individual taxpayers would remain unchanged at Tk 350,000. However, a new tax slab has been proposed at the upper end of the income scale, that will be subjected to a 30 per cent tax.
Under the revised structure, the first Tk 350,000 of income will remain tax-free. The next Tk 100,000 will be taxed at 5 per cent, followed by 10 per cent on the subsequent Tk 400,000, 15 per cent on the next Tk 500,000, 20 per cent on next Tk 500,000, and 25 per cent on next Tk 2 million. As per the newly proposed income slab, any income above Tk 3.85 million will be taxed at the rate of 30 per cent.
The budget also proposed an increase in the tax-free income threshold for the 2026–27 and 2027–28 fiscal years. In both of those years, the limit will be raised by Tk 25,000, bringing the tax-free ceiling to Tk 375,000.
For women and senior citizens aged 65 or above, the tax-free income threshold is Tk 400,000. For third-gender individuals and persons with disabilities, the limit is Tk 475,000. Gazetted freedom fighters are allowed a higher threshold of Tk 500,000.
Additionally, parents or legal guardians of persons with disabilities will receive an extra Tk 50,000 tax-free allowance per dependent.
The government also proposed that from the 2026–27 fiscal year, individuals injured during the July uprising who are officially recognised will be entitled to a tax-free income threshold of Tk 525,000.
Tk 1,000 minimum tax for new taxpayers
For new taxpayers, the finance adviser proposed a minimum tax of Tk 1,000 once their income exceeds the tax-free limit. Currently, minimum tax rates vary based on the taxpayer’s location. Those residing in Dhaka North, Dhaka South, and Chattogram City Corporation areas must pay Tk 5,000. In other city corporations, the minimum tax is Tk 4,000, while taxpayers outside city corporation areas pay Tk 3,000.
According to data from the National Board of Revenue (NBR), Bangladesh currently has around 11.1 million registered taxpayers with Taxpayer Identification Numbers (TINs). Of them, approximately 4 million individuals submitted tax returns during the current fiscal year.