Tax-free income ceiling remains Tk 3.5 lakh in budget 2025-26
The proposed national budget for fiscal year 2025–26 keeps the annual tax-free income ceiling for individual taxpayers unchanged at Tk 3.5 lakh, despite the continued pressure of high inflation.
Financial Adviser Salehuddin Ahmed announced that the threshold will remain the same for general taxpayers.
Although the exemption limit remains unchanged for now, a gradual increase has been planned. From 2026–27, the tax-free ceiling will rise by Tk 25,000 to Tk 3.75 lakh and will remain at that level for the following fiscal year.
The budget also proposes a restructured tax slab, introducing a new top rate of 30 percent for individuals earning over Tk 38.5 lakh annually. The revised tax rates are as follows:
- First Tk 3.5 lakh: Tax-free
- Next Tk 1 lakh: 5%
- Next Tk 4 lakh: 10%
- Next Tk 5 lakh: 15%
- Next Tk 5 lakh: 20%
- Next Tk 20 lakh: 25%
- Any income beyond Tk 38.5 lakh: 30%
Special tax-free income thresholds have been set for different groups:
- Women and senior citizens (above 65): Tk 4 lakh
- Third-gender individuals and persons with disabilities: Tk 4.75 lakh
- Freedom fighters (gazetted): Tk 5 lakh
- Parents or legal guardians of disabled dependents: An extra Tk 50,000 per dependent
Additionally, starting from 2026–27, wounded participants of the July 2024 mass uprising (officially recognized as “July warriors”) will receive a tax-free income ceiling of Tk 5.25 lakh.
Minimum Tax for New Taxpayers Set at Tk 1,000
The budget proposes a minimum tax of Tk 1,000 for new taxpayers who cross the tax-free threshold. Currently, the minimum tax is Tk 5,000 for taxpayers in Dhaka North, Dhaka South, and Chattogram City Corporations; Tk 4,000 in other city corporations; and Tk 3,000 in non-city corporation areas.
According to the National Board of Revenue (NBR), there are around 11.1 million registered TIN (Taxpayer Identification Number) holders, but only 4 million submitted tax returns in the current fiscal year.
With inflation averaging over 10 percent for the past year and wage growth lagging behind at 8 to 9 percent, many taxpayers have seen a decline in real purchasing power—making the unchanged tax-free ceiling a point of concern for middle- and lower-income earners.
