The government has retained the tax-free income limit at Taka 3.5 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 percent to 30 percent for natural individual taxpayers and firms with tax slab adjustments.

According to today's budget proposal, for women and senior citizens aged 65 years or above, the limit is Taka four lakh, physically challenged persons and members of the third gender Taka 4.75 lakh and the freedom fighters Taka five lakh.

However, the threshold would be increased for parents or legal guardians of physically challenged/adopted child by Taka 50,000 for each child.

Mahmood Ali said the maximum tax free income threshold for individual taxpayers was Taka 1.65 lakh in FY 2009-10, which has been increased to Taka 3.50 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 Taka 5,000. For other City Corporations, it is Taka 4,000. For other areas outside the City Corporation, minimum tax is Taka 3,000.

Ali also proposed to keep the existing structure of surcharge unchanged.

Surcharge is collected from wealthy individual taxpayers at certain percentage of the income tax based on their net wealth.

Currently, the rate of surcharge payable up to the net asset value of Taka four crore is nil. If the net asset value exceeds Taka four crore, the surcharge is 10 percent and if the net asset value exceeds the maximum limit of Taka 50 crore, the surcharge amount is 35 percent.

BDST: 2024 HRS, JUNE 6, 2024
MSK