Tax-free income limit likely to be Tk3.5 lakh

The government is likely to raise the tax-free income ceiling for individual taxpayers by Tk 50,000 to Tk 3.50 lakh in the up-coming national budget for the fiscal year 2024 to reduce inflationary pressure amid the soaring cost of living.

The National Board of Revenue (NBR) officials said that the board may raise the tax-free income threshold for individual taxpayers to Tk 3.5 lakh from existing Tk 3 lakh.

Besides, the tax-free income limit for all types of taxpayers--women, senior citizens, physically challenged people, the third gender, and war-wounded freedom fighters--might be increased, the officials concerned said.

The existing tax-free income ceiling has remained unchanged for the three consecutive fiscal years although the country’s citizens are under financial strains due to soaring inflation and local currency depreciation triggered by the global and local headwinds.

The government increased the tax-free income limit to Tk 3 lakh from Tk 2.5 lakh in FY21 after five years.

According to a study conducted by Centre for Policy Dialogue (CPD), household expenditure of a four-member family in Dhaka city had increased by 25 per cent in one year due to a hike in commodity prices.

Earlier, CPD had proposed raising the tax-free income ceiling for individual taxpayers by Tk 50,000 to Tk 3.50 lakh to offset the shocks of inflationary pressure on the common people.

CPD’s Executive Director Fahmida Khatun said that due to an increase in the prices of essential commodities, especially food items, the purchasing power of the common people has declined for which the think-tank has proposed raising the tax-free income ceiling to Tk 3.50 lakh for individual taxpayers.

Besides, the Federation of Bangladesh Chambers of Commerce and Industry (FBCCI), the apex trade body, has proposed revising upward the tax-free income ceiling to Tk 4 lakh while Dhaka Chamber of Commerce and Industry (DCCI) has pro-posed fixing the limit at Tk 5 lakh for FY24.