Tax-Free Income Limit Likely to Rise to Tk 525,000 for July Warriors

Tax-Free Income Limit Likely to Rise to Tk 525,000 for July Warriors

The government is preparing to introduce a new category under personal income tax called “July Warriors,” offering targeted tax relief beginning in the 2026–27 fiscal year. Under the proposed measures, individuals in this category will be eligible for a tax exemption on annual incomes up to Tk 525,000 for a two-year period.

A similar adjustment is expected for war-wounded freedom fighters, with the tax-free income threshold set to rise from the current Tk 500,000 to Tk 525,000 starting from FY27. These changes are part of a broader tax reform initiative to be presented in the upcoming national budget.

Finance Adviser Salehuddin Ahmed is scheduled to announce the national budget on June 2, covering the fiscal period from 2025 to 2027. The budget is expected to outline new fiscal measures aimed at easing the tax burden for specific groups while maintaining the current thresholds for the broader population in the short term.

The newly introduced benefits will apply specifically to gazetted July Warriors—individuals officially recognized for their participation in the July–August 2024 student-led uprising that led to the fall of the Sheikh Hasina-led Awami League government. In February this year, the interim administration officially listed 1,401 individuals under this designation.

Despite the new relief measures, the government is expected to keep the general tax-free income limit for individuals unchanged at Tk 350,000 for the upcoming fiscal year. However, proposals have been submitted to raise this threshold starting from FY27 and to maintain it for two subsequent years under the new tax regime set to roll out from July.

Additionally, the upcoming fiscal reforms are expected to include revisions in the tax-exempt thresholds for women and other special taxpayer categories, effective from FY27 onward. These adjustments are part of the government’s broader plan to implement a more inclusive and responsive personal income tax framework in the coming years.

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