Bangladesh Income Tax Law Amendment

Effective from 1 July 2023, the government of Bangladesh has announced amendments to Income Tax law as per below:

Amendment of Tax-exempted amounts

Taxpayer Category	Annual Tax-exempted Income 2022-2023	Annual Tax-exempted Income 2023-2024
General taxpayer	Tk. 300,000	Tk. 350,000
Women and Senior citizen above 65 years age	Tk. 350,000	Tk. 400,000
Physically Challenged persons	Tk. 400,000	Tk. 475,000
War-wounded gazette freedom fighter	Tk. 475,000	Tk. 500,000
Third gender taxpayers	Tk. 350,000	Tk. 475,000
The income tax-free threshold is increased for parents or legal guardians of physically challenged children/dependents by Tk. 50,000 for each child/dependent.

Amendment of Tax brackets

Annual Tax Brackets 2022-2023	Annual Tax Brackets 2023-2024	Tax Rates (remain unchanged)
First Tk. 300,000	First Tk. 350,000	0%
Next Tk. 100,000	Next Tk. 100,000	5%
Next Tk. 300,000	Next Tk. 300,000	10%
Next Tk. 400,000	Next Tk. 400,000	15%
Next Tk. 500,000	Next Tk. 500,000	20%
On the balance	On the balance	25%

Amendment of previously tax-free earnings

The below earnings are now subject to Personal Income Tax:

• Valuation of Perquisite Allowance
• House Rent Allowance (received in cash)
• Rent Free Accommodation
• Conveyance Allowance (received in cash)
• Conveyance received for private use
• Free of Concessional passage (commonly known as LFA or LTA)
• Entertainment Allowance
• Medical Allowance

Introduction of Personal exemption

A new exemption has been introduced where the lower of Tk. 450,000 or 1/3 of total taxable income is exempt from Income Tax.

Non-cash benefits amendments

Notional Income (non-cash benefits) provided for accommodation and transport facility have been revised as follows:

• Acccommodation: Actual rental amount is now fully taxable
• Provided Vehicle: For vehicles with engines up to 2,500CC, Tk. 10,000 per month is now included in taxable income.

For vehicles with engines exceeding 2,500CC, Tk. 25,000 per month is now included in taxable income.

Please contact your Mercans’ services delivery team for any additional information regarding the implications of the above change.

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Bangladesh – Income Tax Law Amendment

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