Higher Bank Tax-Free Limit

The Government has announced a significant adjustment to the threshold for excise duty on bank deposits in the proposed 2026–27 national budget, offering relief to small savers across the country. Under the new proposal, individuals maintaining up to BDT 400,000 in their bank accounts will no longer be subject to excise duty, marking an increase from the existing limit of BDT 300,000.

The proposal was presented in Parliament on Thursday (11 June) by Finance Minister Amir Khasru Mahmud Chowdhury as part of a broader set of fiscal measures aimed at easing pressure on low and middle-income depositors. According to the government, the revision is intended to strengthen financial inclusion while reducing the tax burden on smaller account holders.

At present, excise duty is levied once a year on bank accounts whose balances exceed BDT 300,000. Under the revised structure, only accounts crossing the BDT 400,000 threshold will attract this charge. The duty will continue to be applied annually, rather than on a transactional basis, maintaining the existing administrative framework while adjusting the eligibility limit.

In addition, the budget proposes a simplification of taxation rules related to loan accounts. Previously, multiple accounts or dealings under a single loan arrangement could result in repeated deductions of excise duty. The new proposal stipulates that such accounts will now be subject to a single charge only, reducing duplication and administrative complexity within the banking system.

The Finance Minister emphasised that these measures are designed to provide tangible relief to small depositors and improve fairness in the financial sector. He noted that the reforms are also intended to modernise tax collection procedures and reduce unnecessary burden on banking customers who maintain multiple linked accounts.

Key Changes in Excise Duty Structure

The overall budget framework for the 2026–27 fiscal year has been set at BDT 9.38 trillion. The National Board of Revenue’s revenue target stands at BDT 6.95 trillion, while the projected fiscal deficit is estimated at BDT 2.43 trillion.

To bridge this gap, the government plans to rely on both domestic borrowing and external financing sources. Officials indicate that a balanced mix of internal and foreign funding will be used to maintain macroeconomic stability while supporting development expenditure.

Economists suggest that the revised excise duty threshold may encourage greater savings mobilisation among lower-income groups, although its immediate fiscal impact on revenue collection is expected to be moderate.