The proposed national budget for fiscal year 2025–26 keeps the annual tax-free income threshold for individual taxpayers unchanged at Tk 3.5 lakh, despite continued pressure from high inflation.
Financial Adviser Salehuddin Ahmed announced that the exemption limit will remain the same for general taxpayers.
Although the threshold is unchanged for now, a gradual increase has been planned. Starting from FY 2026–27, the tax-free ceiling will rise by Tk 25,000 to Tk 3.75 lakh and remain at that level for the following fiscal year.
The budget also proposes a restructured tax slab, introducing a new top rate of 30 percent for individuals earning over Tk 38.5 lakh annually. The revised tax rates are as follows:
- First Tk 3.5 lakh: Tax-free
- Next Tk 1 lakh: 5%
- Next Tk 4 lakh: 10%
- Next Tk 5 lakh: 15%
- Next Tk 5 lakh: 20%
- Next Tk 20 lakh: 25%
- Income exceeding Tk 38.5 lakh: 30%
Special tax-free income thresholds have been set for specific groups:
- Women and senior citizens (aged over 65): Tk 4 lakh
- Third-gender individuals and persons with disabilities: Tk 4.75 lakh
- Freedom fighters (gazetted): Tk 5 lakh
- Parents or legal guardians of disabled dependents: Additional Tk 50,000 per dependent
In addition, starting from FY 2026–27, wounded participants of the July 2024 mass uprising (officially recognized as “July Warriors”) will be entitled to a tax-free income ceiling of Tk 5.25 lakh.
Minimum Tax for New Taxpayers Set at Tk 1,000
The budget introduces a minimum tax of Tk 1,000 for new taxpayers who surpass the tax-free threshold. Currently, the minimum tax is:
- Tk 5,000 in Dhaka North, Dhaka South, and Chattogram City Corporations
- Tk 4,000 in other city corporations
- Tk 3,000 in non-city corporation areas
According to the National Board of Revenue (NBR), there are approximately 11.1 million registered Taxpayer Identification Number (TIN) holders, but only 4 million submitted tax returns in the current fiscal year.
With inflation averaging over 10 percent over the past year, and wage growth lagging at 8 to 9 percent, many taxpayers have seen a decline in real purchasing power—making the unchanged tax-free ceiling a matter of concern for middle- and lower-income earners.