In the proposed budget for the upcoming 2026–27 fiscal year, a proposal was initially made to increase the tax-free income threshold by 25,000 BDT, setting it at 375,000 BDT.

While this limit was initially proposed for the next two fiscal years, it is highly likely to be raised by another 25,000 BDT in the final budget, bringing the final tax-free income threshold to 400,000 BDT (4 Lakh Taka).

This means the tax-free income limit is set to experience a significant jump of 50,000 BDT in one go.

Simultaneously, the government is temporarily backing away from its plan to impose a single, flat VAT rate at the retail merchant level. In addition, sources from the Ministry of Finance indicated that several other modifications are being introduced to the budget.

These changes will be formalized through the passage of the Finance Bill, which is scheduled to be enacted today, Monday.

Officials from the National Board of Revenue (NBR) stated that the government is moving toward this decision to provide financial relief to low-income taxpayers and in response to widespread demands from various sections of society to raise the tax-exempt income ceiling.

Meanwhile, under the initially proposed budget framework, the tax-free income limit was projected to reach 400,000 BDT only in the 2028–29 fiscal year.

The plan was to maintain that rate the following year before eventually raising it to 450,000 BDT in the 2030–31 fiscal year.