Payroll Compliance Updates- Bangladesh
A. Update

In the Budget session, the Bangladesh government has announced changes in the Income-Tax Act through the Finance Bill for 2020-2021. Following is the overview for the same.

i. Tax-free Income Ceiling for Resident Individuals rises to TK 3 lakh:
Category Tax Free Ceiling (TK)
Current Proposed
General 2,50,000 3,00,000
Women & elderly aged above 65 years 3,00,000 3,50,000
Physically disabled people 4,00,000 4,50,000
Gazetted Freedom Fighters/ Injured Veterans 4,25,000 4,75,000
Parents or Guardians of specially-abled children - by 50,000 Taka
Income Slabs and Tax Rates
Total Income Tax Rate
On the first TK 3,00,000 Nil
On next TK 1,00,000 5%
On next TK 3,00,000 10%
On next TK 4,00,000 15%
On next TK 5,00,000 20%
On the balance of total income 25%
ii. Surcharge on Net Wealth - Individual Tax Payer:
Surcharge on Net Wealth -  Individual Tax Payer
Wealth Rate of Surcharge * on income tax Minimum Surcharge/Tk.
<BDT. 10 crore->=BDT. 15 crore 20% 5000
<BDT. 15 crore->=BDT. 20 crore 25% 5000
<BDT. 20 crore 30% 5000
<=BDT. 50 crore 0.1% of Net Wealth or 30% of Income Tax, whichever is higher 0
Up to BDT. 3 crore 0 0
<BDT. 3 crore->= BDT. 5 crore or Owns 1 + Car or Investment in land greater than 8000 sq. ft. in any City Corporation area 10% 3000
<BDT. 5 crore->=BDT. 10 crore 15% 3000
iii. Advance Tax for the owners of Private Motor Car
Advanced Tax for a Car or a Jeep
Not exceeding 1500 CC
25,000 Taka
Exceeding 1500 CC but not exceeding 2000 CC
50,000 Taka
Exceeding 2000 CC but not exceeding 2500 CC
75,000 Taka
A Micro Bus
30,000 Taka
Exceeding 2500 CC but not exceeding 3000 CC
1,25,000 Taka
Exceeding 3000 CC but not exceeding 3500 CC
1,50,000 Taka
Exceeding 3500 CC
2,00,000 Taka
 
iv. Minimum Tax- Individual tax payer
Resident of Dhaka North City Corporation
Resident of Dhaka South City Corporation
Resident of Chittagong City Corporation
5,000 Taka
Resident of Other City Corporation Area 4,000 Taka
Resident of Non-City Corporation Area 3,000 Taka
v. Tax rate – Others

Income of Non-residents (Except NRB) - 30%

The Finance Bill has been passed by the Bangladesh Parliament and shall be effective from 1st July 2020 and the retrospective effect of Tax rates shall be taken care by the employee at the time of filing their individual returns

B. Statutory Compliance Release Date: June 11, 2020
C. Effective Date: July 01, 2020
 

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