Tax-free income limit raised to Tk 3.75 lakh in proposed budget

Against the backdrop of rising inflation and cost of living, the government has proposed raising the tax-free income limit for individual taxpayers by Tk 25,000 to Tk 3.75 lakh in the 2026-27 fiscal year budget. The current limit is Tk 3.50 lakh.

Finance Minister Amir Khasru Mahmud Chowdhury presented the proposed budget for the 2026-27 fiscal year in the National Parliament on Thursday, June 11. In his budget speech, he said considering the reality of rising inflation and living costs, the tax-free income limit for individual taxpayers has been proposed for the next five years.

He proposed raising the tax-free income limit to Tk 4 lakh for the 2028-29 and 2029-30 tax years, and to Tk 4.50 lakh for the 2030-31 tax year.

The finance minister said the proposal to set income tax rates and tax-free limits for individual taxpayers for the next five years aims to give taxpayers a medium-term understanding of their future tax liabilities.

Alongside ordinary taxpayers, the tax-free limit has also been proposed to be raised for special categories. For female taxpayers and senior citizens aged 65 and above, the proposed tax-free limit is Tk 4.25 lakh for the 2026-27 and 2027-28 tax years. The limit will be Tk 4.50 lakh for 2028-29 and 2029-30, and Tk 5 lakh for 2030-31.

For third-gender persons and disabled taxpayers, the proposed tax-free limit is Tk 5 lakh for 2026-27 and 2027-28, Tk 5.25 lakh for 2028-29 and 2029-30, and Tk 5.75 lakh for 2030-31.

For gazetted wounded freedom fighters and gazetted 'July fighters', the proposed tax-free limit is Tk 5.25 lakh for 2026-27 and 2027-28, Tk 5.50 lakh for 2028-29 and 2029-30, and Tk 6 lakh for 2030-31. Parents or legal guardians of disabled persons will receive an additional Tk 50,000 tax-free income benefit for each disabled child or dependent.

Alongside the increase in the tax-free income limit, the finance minister also announced income tax rates for individual taxpayers for the next five years, saying this will make the tax system more predictable and progressive.