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| Individual Income Tax Rate (AY-2025-2026-2027-2028) |
Individual income tax is a tax imposed by governments on the income earned by individuals, including wages, salaries, bonuses, rental income, investment gains, and other forms of income. It is one of the primary sources of revenue for governments to fund public services and programs. The tax rates, regulations, and structures can vary widely from one country to another.
Key points about individual income tax include:
1.Progressive Taxation:
Many countries employ a progressive tax system, where higher income earners pay a higher percentage of their income in taxes. This is often justified by the principle of ability-to-pay, where those with greater means contribute a larger share of their income to support government services.
2.Tax Brackets:
Income tax rates are typically organized into different tax brackets, each with its own tax rate. As your income increases and moves into a higher bracket, the additional income is taxed at a higher rate.
3.Deductions and Credits:
Most tax systems allow for various deductions, exemptions, and tax credits, which can reduce the taxable income and consequently the amount of tax owed. These deductions and credits can vary widely depending on the country's tax laws.
4.Filing Deadlines:
Taxpayers are required to file income tax returns within specific deadlines set by the tax authorities. Failure to file on time may result in penalties and interest charges.
5.Withholding:
In many countries, employers are required to withhold a portion of an employee's wages to cover income taxes. This withholding is submitted to the government on the employee's behalf.
6.Self-Employment Taxes:
Self-employed individuals typically need to pay both the employee and employer portions of certain taxes, such as social security or Medicare taxes in the United States. This is because they don't have an employer withholding these taxes on their behalf.
7.International Considerations:
Individuals who earn income across international borders may have to deal with additional complexities, such as double taxation treaties and reporting requirements.
8.Tax Filing Process:
Taxpayers are usually required to file annual or periodic tax returns detailing their income, deductions, and credits. The tax authorities then calculate the amount of tax owed or the refund due.
It's important to note that individual income tax is just one component of a country's overall tax system, which may include other taxes like corporate taxes, sales taxes, property taxes, and more. The specific rules, rates, and regulations can vary greatly, and it's always advisable to consult official tax resources or seek guidance from tax professionals when dealing with individual income tax matters.
New Updated Individual Income Tax Rate-In Bangladesh(AY-2025-2026)
AYS (2026-2027 & 2027-2028)
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AY-2025-2026 |
AYs-2026-2027 & 2027-2028 |
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|
Income Slab |
Rate of Tax |
Income Slab |
Rate of Tax |
|
Up to BDT.3,50,000 |
Nil |
Up to BDT.3,75,000 |
Nil |
|
On Next BDT.1,00,000 |
5% |
On Next BDT.3,00,000 |
10% |
|
On Next BDT.4,00,000 |
10% |
On Next BDT.4,00,000 |
15% |
|
On Next BDT.5,00,000 |
15% |
On Next BDT.5,00,000 |
20% |
|
On Next BDT.5,00,000 |
20% |
On Next BDT.20,00,000 |
25% |
|
On Next BDT.20,00,000 |
25% |
On Remaining Balance |
30% |
|
On Remaining Balance |
30% |
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Note:
Tax rate for non-resident individual remain unchanged:
**30% (Except nonresident Bangladeshi)
|
Tax free income Level |
AY2025-2026(BDT) |
AYs 2026-2027 & 2027-2028(BDT) |
|
General Individual Tax payers |
3.50.000 |
3,75,000 |
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Women and senior citizen above 65 years of age |
4.00.000 |
4,25,000 |
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Third gender tax payers and physical challenges persons |
4,75,000 |
5,00,000 |
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Gazetted war –wounded freedom fighters |
5,00,000 |
5,25,000 |
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Gazetted July –warriors (injured by July mass uprising-2024) |
N/A |
5,25,000 |
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The tax free level of income for parents or legal guardians of physically challenged child or dependent will be increases by BDT.50.000 for each child/depended. |
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Minimum Tax payable by Individual Tax payers |
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Areas of residence |
AY 2025-2026(BDT) |
AYs 2026-2027& 2027-2028 |
|
Dhaka North, Dhaka south and chattogram city corporation, |
5000 |
If the total income exceeds the tax free limit, then a minimum flat tax of BDT5,000 will be applicable regardless of location. However, the minimum tax for the new tax payers would be BDT.1,000. |
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Any other city corporation |
4000 |
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Other area |
3000 |
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