Govt orders mandatory income tax deduction from employees’ salaries

The Office of the Controller General of Accounts (CGA) has issued a directive making it mandatory to deduct income tax at source from the monthly salaries of government officers and employees whose basic pay exceeds the specified threshold. The circular was released on Monday.

According to the letter from the CGA’s Additional Accounts and Procedures Division, under the Income Tax Act, 2023, male government officials and employees with a monthly basic salary of Tk26,785 or more, and female officials and employees earning Tk30,357 or more, have crossed the tax-free income limit. As a result, income tax must be deducted at source when preparing their salary bills.

The circular also stated that, under Treasury Rules S R 125, the responsibility for deducting income tax and other applicable charges from salary bills rests with the respective drawing and disbursing officers (DDOs).

All Chief Accounts and Finance Officers, Divisional and District Accounts Controllers, Upazila Accounts Officers, and other relevant offices nationwide have been instructed to take the necessary steps to implement this directive.

The instruction was sent to the Finance Division through the secretary, with specific attention to the joint secretary (budget-1).

The directive refers to a semi-official letter issued by the Internal Resources Division and the National Board of Revenue (NBR) on October 7, which provided clear guidelines on deducting income tax at source from government salaries.