According to the Finance Act 2013 (budget 2013-14) if the house rent allowance to an employee in cash exceeds Tk 220,000 per year, the excess amount of house rent shall be included in his/her income for calculation of income tax. The provision is still in force and there is no proposal to change it either. During the past three years, house rent in Bangladesh has increased significantly but the tax rule has not been amended accordingly. Realizing the impact of increased house rent, the government has increased house rent allowance of government employees from 1 July 2016.
The government should review the issue and increase the tax-free limit of house rent allowance to Tk 360,000 per annum. Tax may be imposed on the house rent allowance amount over Tk 360,000. It would give much relief to the service-holders in the country.
Mohd. Ashraf Hossain
8/A, Ramna, Dhaka-1000