Tax exemption on house rent allowance

SINCE the budget of 2013-14, house rent allowance of a non-government employee of over Tk 220,000 per year has been considered as taxable. Over last five years, house rent in Bangladesh has increased at least by 50 per cent and during the same period, inflation has caused severe impacts on fixed income non-government employees. While the government has doubled the pay packages of government employees, increase in salaries of non- government employees are still insignificant. In view of the fact that house rent in cities increased considerably, the government increased house rent allowance of government employees from July 1, 2016. Employees of government, autonomous, semi-autonomous bodies are exempted from income tax on house rent allowance that they receive. A government employee at grade one gets Tk 39,000 per month. Annually, this sums upto Tk 468,000 per annum tax free. So the tax free limit on house rent allowance for non-government employees can be re-fixed at Tk 468,000 per year in the proposed budget for 2018-19. If this is done, it will be a matter of great relief for non-government service holders of the country.

Md. Ashraf Hossain

120, Central Bashabo, Dhaka-1214

[email protected]