Finance Minister AHM Mustafa Kamal has proposed the ceiling for tax-free dividend income up to Tk 50,000 in a bid to attract more investors to the market, which is going through a liquidity crisis.
At present, the ceiling for tax-free dividend income for individual investors is Tk 25,000.
The finance minister also proposed in his budget speech that the double taxation on dividend from listed companies will also be removed.
A provision was made in the income tax ordinance last year to avoid the multilayer taxation on dividend income, said Mr. Kamal.
“Special incentives will continue for encouraging investment in the capital market,” said Mr Kamal, in his budget speech for fiscal year (FY) 2019-20.
However, this exemption will only be applicable for the individual taxpayers.
Earlier, the Dhaka Stock Exchange (DSE) and the Chittagong Stock Exchange (CSE) urged the government to increase the tax-free dividend income up to Tk 100,000, considering the market situation.