The tax credit for middle-income individuals is shrinking.

 

In the coming fiscal year, tax relocation due to investment is expected to decrease for the middle-income group of people of Bangladesh.

Currently, only a maximum of 25% can be invested.

For the coming fiscal year, the Finance Bill-2022 proposes a reduction in the amount of investment that is eligible for a tax credit to 20%. It also increased the income tax rate as well as the ranges of qualified investments.

Currently, an individual taxpayer with a yearly income of up to Tk 1.5 million is eligible for a 15% tax credit on a qualifying investment amount of up to 25% of total income.

For anyone with an income of up to Tk 1.5 million, the tax credit ratio would remain constant, whereas those higher earnings will advantage from the policy.

In the upcoming financial year, the tax refund rate for individuals with annual incomes over Tk 1.5 million would be increased from 10% to 15%.