Finance minister proposes raising tax-free income exemption limit

The tax-free income limit for individuals has been proposed raised to Tk 250,000 a year in 2015-16 fiscal.

Finance Minister AMA Muhith proposed the change for income tax while presenting the national budget in Parliament on Thursday.

The income tax exemption limit is currently at Tk 220,000 a year.

The budget has proposed increasing minimum tax of those who have Tax Identification Number (TIN) to Tk 4,000.

Muhith said, “Taxpayers other than companies from City Corporation, Pourashava located at district headquarters and other areas are to pay Tk 3,000, 2,000, and 1,000, respectively as minimum tax as per the existing law.

“Direct tax is universal in nature and as such uniform rate should be applicable regardless of geographical locations in Bangladesh.”

“Hence, I propose uniform amount of minimum Tax at Tk 4,000 instead of diverse rates based on locations,” said the minister.

The demand to increase the tax-free income limit was raised last year, but Muhith had kept it at Tk 220,000.

Proposing the jump for the next fiscal, he said, “Considering prevailing inflation, increased cost of living and to reduce tax burden for marginal taxpayers, I propose to raise tax-exemption threshold for individual taxpayers from Tk 220,000 to Tk 250,000.”

He proposed to lift the tax-free slab for women taxpayers and senior citizens, aged over 65 years, from Tk 275,000 to Tk 300,000.

Muhith also offered to raise the ceiling for people with disability to Tk 375,000 from 350,000 and for freedom fighters, to Tk 425,000 from 400,000.