Tax exemptions for government employees have been increased.
In a notification on Tuesday, the National Board of Revenue (NBR) said that government employees will no longer have to pay income tax on what they get except basic salary and bonus.
Government employees used to receive tax exemptions in various instances in the past. However, this year's notification has expanded the scope of these exemptions.
Previously, government employees were entitled to tax exemption in certain sectors. For instance, if the house rent constituted 50 per cent of the basic salary or amounted to Taka 3,00,000 or less, it was not subject to taxation.
Similarly, a medical allowance of 10 per cent of the basic salary or up to Taka 1,20,000 was also exempted from taxation.
These exemptions on house rent and medical allowance are applicable to all working taxpayers.
Apart from this, the list of tax-free allowances of government officials includes Boishakhi allowance, education assistant allowance, responsibility allowance, tiffin allowance, entertainment allowance and travel allowance and dearness allowance.
According to the new law, government employees can avail of tax exemption on one-third of the house rent or whichever is lower, up to Taka 4,50,000, as allowance.
On Wednesday, the Finance Division issued a notification, granting special benefits at the rate of 5% to government employees, pensioners, and MPO-affiliated teachers and employees.
As per the notification, government employees and pensioners will receive a minimum of Taka 1,000, while pensioners will get a minimum of Taka 500.
