Tax-free income limit may rise to Tk 4 lakh

The government is likely to raise the tax-free income threshold to Tk 4 lakh over the next two fiscal years, FY2026-27 and FY2027-28, to ease the tax burden on lower-income earners.

The threshold could then increase to Tk 4.5 lakh in FY2028-29 and FY2029-30 before reaching Tk 5 lakh in FY2030-31, according to sources familiar with the matter.

The changes are expected to be incorporated into the Finance Bill 2026 before it is passed by parliament, a senior finance ministry official said.

Finance Minister Amir Khosru Mahmud Chowdhury placed the bill in parliament on June 11 while presenting his first national budget for FY2026-27.

The proposed budget set the tax-free income threshold at Tk 3.75 lakh for FY2026-27 and FY2027-28. At present, individuals can earn up to Tk 3.5 lakh a year without paying income tax.

The official also said the government is likely to drop the proposed requirement for a Taxpayer Identification Number (TIN) to open a bank account.

The budget proposed making TIN mandatory for opening bank accounts, but the measure drew opposition from various stakeholders, who argued that it could discourage financial inclusion.

The advance income tax (AIT) on business-to-business (B2B) transactions, which was proposed to be at 0.2 percent in the budget, is likely to remain unchanged, the official said.

The government is also planning to cut the capital gains tax on gold to 5 percent from the current 15 percent.

In the proposed Finance Bill, profits from the sale or transfer of gold, silver, jewellery, precious stones, diamonds, coins, digital currencies, artworks, antiques and club memberships declared in a taxpayer return would be treated as capital gains and taxed at 15 percent.

Capital gains from securities would also be taxed at 15 percent, including treasury bills, bonds, savings instruments, debentures, sukuk and other shariah-based securities, as well as shares and stocks issued by companies and other entities.

The proposal to tax gains from gold and jewellery comes at a time when gold prices have risen sharply in recent years.

In another planned change, the corporate tax rate for private universities is likely to be cut to 5 percent from 10 percent.

The 10 percent rate currently applies to private universities, medical colleges, dental colleges, engineering colleges and institutions dedicated solely to ICT education.

No changes are being considered for real estate developers, the official added.