No individual tax for income below Tk 3 lakh

The tax-free income limit for individual taxpayer has been increased in the proposed budget for FY 2020-21.

In the new budget, the tax-free income limit has been fixed at Tk 300,000. Those earning Tk 300,000 annually will not have to pay any tax. The limit is Tk 250,000 in the current fiscal.

"I propose to increase the tax-free income threshold of male taxpayers from Tk 2 lakh 50 thousand to Tk 3 lakh and the tax-free income threshold of female taxpayers and taxpayers above 65 years of age from Tk 3 lakh to Tk 3 lakh and 50 thousand respectively," the minister said in his budget speech.

"At the same time, I propose to reduce the minimum tax rate for individuals from 10 percent to 5 percent, and the maximum tax rate for individuals from 30 percent to 25 percent," he said..

The proposed tax-free income threshold, tax rates and tax slabs for all categories of individual taxpayers except companies and local authorities are: no tax on first Tk 3,00,000; five percent tax on next Tk 100,000; 10 percent tax on next Tk 300,000;  15 percent on next Tk 400,000; 20 percent on next Tk 5,00,000; and 25 percent income tax on the balance of total income.