Bangladesh raises tax-free income threshold to Tk 400,000 for next tax year

The revised threshold is approved through a budget amendment in parliament

The government has raised the tax-free income threshold by Tk 25,000 to Tk 400,000 for the next tax year, departing from its original budget proposal to keep the exemption limit unchanged.

As a result, individuals earning up to Tk 400,000 between July 2025 and June 2026 will not have to pay income tax.

The change came after Prime Minister Tarique Rahman proposed an amendment during discussions on the national budget in parliament on Monday.

The BNP government had initially proposed retaining the tax-free income threshold set by the interim government for the ongoing fiscal year.

Under the revised structure, income exceeding Tk 400,000 will be taxed at 10 percent on the next Tk 300,000.

Previously, the first slab above the tax-free threshold was taxed at 5 percent.

The revised rate means lower-income taxpayers will face a higher tax burden despite the increase in the exemption limit amid continued inflationary pressure.

The amendment was placed before Finance Minister Amir Khosru Mahmud Chowdhury during the budget session.

The parliamentary sitting began in the morning under the chairmanship of Speaker Hafiz Uddin Ahmad.

Leader of the Opposition Shafiqur Rahman opened the budget discussion, followed by Leader of the House Tarique.

The amendment to the Finance Bill was later approved by voice vote.