The Finance Act 2026 raised the tax-free threshold, removed the 5% slab and changed the investment rebate. Here is what it means for your return.
Every budget brings changes that affect how much tax individuals pay. The Finance Act 2026 introduced some of the most significant changes to personal income tax in recent years. If you earn a salary, run a business or have rental or investment income, these changes will directly affect your return for Assessment Year 2026-27.
1. Higher tax-free income threshold
The general tax-free threshold has been increased to ৳ 4,00,000. Women and senior citizens aged 65 or above, persons with disabilities, third-gender taxpayers and war-wounded freedom fighters enjoy higher thresholds, and parents or guardians of a person with disability receive an additional ৳ 50,000.
2. The 5% slab has been removed
Previously, the first ৳ 1,00,000 above the threshold was taxed at just 5%. Under the new structure, income above the threshold starts at 10% on the next ৳ 3,00,000, followed by 15%, 20%, 25% and a top rate of 30%.
3. Investment rebate is now less generous
The investment tax rebate is now the lowest of 3% of taxable income, 10% of eligible investment, or ৳ 7,50,000. Many taxpayers will need to invest more to receive the same rebate as before, so planning early in the year matters more than ever.
4. Minimum tax
If your income is above the tax-free threshold, you must pay at least the minimum tax of ৳ 5,000, even if your calculated tax is lower. First-time taxpayers benefit from a reduced minimum.
What should you do now?
- Collect your salary certificate, bank statements and investment proofs early.
- Review whether your investments still give you the maximum rebate.
- Check that all tax deducted at source has been correctly credited.
- File before 30 November to avoid penalties and interest.
Tax rules can be complex, and small mistakes can be costly. Our income tax team can review your situation, calculate your liability accurately and file your return on your behalf.
