7 Heads of Income under Income Tax Act 2023 & Guidelines
Legal analysis of all income heads, statutory exemption ceilings, and deductible expenses under Section 30 of the Income Tax Act 2023.
1. Income from Employment
Legal Reference: Sections 32–34 & Schedule 6 Clauses 14, 27, 36Statutory rules for determining taxable income for private corporate employees and government officials.
Private Sector Employees Tax Assessment
One-third (1/3) of total gross remuneration or ৳5,00,000—whichever is lower—is exempt from income tax (Schedule 6 Part 1, Clause 27).
The remaining balance is assessed as taxable employment income under standard individual tax slabs.
Gross salary includes basic pay, festival bonuses, medical allowance, house rent allowance, dearness allowance, leave encashment, and overtime.
If employer provides full-time motor car, standard perquisite is added (Up to 1500cc: ৳15,000/mo; 1501–2000cc: ৳20,000/mo; 2001–2500cc: ৳30,000/mo; 2501cc+: ৳50,000/mo).
If employer provides rent-free accommodation, its fair annual value is added to taxable salary.
Government Officials Tax Assessment (SRO 225)
Under SRO 225-Law/IncomeTax-07/2023, for government servants only 'Basic Pay' and 'Festival Allowances' are taxable.
House rent allowance, medical allowance, conveyance allowance, boishakhi allowance, and travel allowance are 100% tax-free.
Lump-grant and gratuity received upon retirement are completely exempt from tax.
Government officials do not receive the private employee 1/3 deduction because their allowances are already fully tax-free by order.