Duty-free threshold for bank deposits may rise to Tk 3 lakh

In order to provide relief to small savers, the government is likely to increase the excise duty exemption threshold for bank deposits in the upcoming budget for fiscal year 2025-26.

Under the proposed measure, individuals with bank deposits of up to Tk 3 lakh will be exempt from paying excise duty starting from the new fiscal year.

At present, the duty-free bank deposit limit is Tk 1 lakh, with an excise duty of Tk 150 being levied on deposits above Tk 1 lakh and up to Tk 5 lakh.

Finance Adviser Salehuddin Ahmed is expected to announce the revised provision on June 2 while presenting the national budget for FY26 in a televised address at 4 pm.

"The limits for the next slabs will remain unchanged," a senior finance ministry official familiar with the matter said yesterday.

For accounts with deposits exceeding Tk 5 lakh but not more than Tk 10 lakh, an excise duty of Tk 500 is charged annually.

If it ranges from Tk 10 lakh to Tk 50 lakh, the duty increases to Tk 3,000. For deposits from Tk 50 lakh to Tk 1 crore, the duty is Tk 5,000.

For deposits over Tk 1 crore but below Tk 2 crore, the excise duty stands at Tk 10,000. This rises to Tk 20,000 for accounts holding between Tk 2 crore and Tk 5 crore.

For deposits exceeding Tk 5 crore, the highest slab applies, with an annual excise duty of Tk 50,000.

Surcharge provisions for assets may be revised

Additionally, the government plans to revise the existing surcharge provisions for assets by linking them to actual tax liabilities rather than inflated or advance-assessed amounts to ensure tax justice and transparency.

Currently, any taxpayer with assets exceeding Tk 4 crore is required to pay a surcharge ranging from 10 percent to 35 percent, which is levied on top of basic income tax.

However, the present structure has drawn criticism for penalising individuals based on artificially inflated tax bases—particularly due to the advance income tax (AIT) mechanism at the import stage.

At present, importers are subject to AIT during the clearance of goods. If the deducted AIT ultimately exceeds the taxpayer's actual liability calculated at the year's end, the surcharge is imposed on the higher, pre-adjusted figure.

The proposed amendment primarily targets high-income taxpayers.

"The objective of this move is to encourage taxpayers to disclose their actual wealth more transparently in their tax returns," said another finance ministry official, preferring anonymity.

The government intends to halve the advance income tax on internet services from 10 percent to 5 percent.

Another proposal under consideration is raising the tax-free prerequisite limit, which covers benefits such as house rent, medical allowance, transport allowance, dearness allowance, and housing facilities.

"We are planning to increase the tax-free income threshold for individual taxpayers from Tk 450,000 to Tk 500,000," finance ministry officials also said.