Proposal has been made to increase the tax-free income limit for individual taxpayers and also to reduce the tax rate in the proposed budget for the fiscal year 2020-21.
As a result, the tax-free income limit will be increasing after five years. This will benefit the lower-middle income people.
In the new proposed budget, the tax-free income limit for individuals has been increased by Tk 50,000 to Tk 3 lakh. The tax-free income limit for women, disabled and gazetted freedom fighters is increasing proportionately.
Currently, the tax-free income limit for individuals is Tk 2.5 lakh. If the annual income is more than this, there is a provision to pay a minimum income tax of 3 to 5 thousand taka depending on the area they reside at.
Also, Women and those above 65 years of age are exempt from income tax up to Tk 3 lakh, disabled taxpayers up to Tk 4 lakh and gazetted war-wounded freedom fighters up to Tk 4 lakh 25 thousand.
Besides, it has been proposed to reduce the maximum tax rate from 30 percent to 25 percent.
Additionally, it has been proposed to reduce the minimum tax rate from 10 percent to 5 percent. At present, if the income is more than Tk 47 lakh, there is a provision to pay income tax at the maximum rate of 30 percent.
Moreover, the surcharge (wealth tax) for the rich will remain unchanged.
