The ceiling for tax-free income will not be raised in the budget for 2006-07, but the high-income group is likely to get tax rebate if their income increases from that of the current fiscal year, finance ministry sources told New Age.

The Federation of Bangladesh Chambers of Commerce and Industry and other major trade organisations have demanded that the ceiling should be raised to Tk 150,000 from Tk 120,000, given the inflation and the wage hike both in the public and private sectors.
 
The average inflation from March 2005 to March 2006 was 7.20 per cent, according to the Bangladesh Bureau of Statistics.
  
The budget for fiscal year 2006-2007 will introduce the rebate for only those who pay tax at the rate of 25 per cent or earn more than Tk 10.20 lakh per year, the sources said.
  
A person who has earned over Tk 10.20 lakh in the current fiscal year and paid about Tk three lakh in income tax at the rate of 25 per cent will be entitled to a rebate if his or her income increases in the next fiscal year. For example, if one earns Tk one lakh more then the previous fiscal year he or she will pay 15 per cent tax, instead of 25 per cent, on the additional amount, sources said.
  
The total income of the government accrued from individual taxpayers was Tk 230 crore in 2004-05, about 60 per cent of which was generated from individuals earning more than Tk 10.20 lakh per annum.
  
According to sources, the existing four-tier tax slabs and tax rates for individual taxpayers will remain unchanged in the next budget.