Tax Guide BD
Bangladesh Income Tax Update 2025-2026: Rates, Slabs & Filing
This is your complete guide to the key changes in the Bangladesh Income Tax Act 2023. We provide an easy-to-understand overview of the new tax rates, individual tax slabs, and corporate tax rules to help you with your tax filings.
A Modernized Tax Framework for Bangladesh
The Income Tax Act 2023 marks a significant overhaul, replacing the nearly 40-year-old Income Tax Ordinance of 1984. The old law had grown complex with numerous amendments. The new act introduces a simplified, transparent, and taxpayer-friendly system designed for Bangladesh's evolving economy. The primary goal is to enhance clarity, reduce ambiguity, and encourage voluntary tax compliance to boost national revenue.
Key 2025-2026 Tax Changes at a Glance
New Individual Tax Slabs
The tax-free income threshold has increased. See the 'Individual Taxpayers' section for the latest income tax rates.
Updated Surcharge Rates
Surcharge thresholds on net worth have been revised, starting from a net worth of BDT 4 Crore.
Mandatory Return Proof (PSR)
The list of services requiring proof of tax return submission is now expanded to improve tax compliance.
Investment Rebate Changes
The calculation for tax rebates on investments has been updated. Use our calculator to see the impact.
Tax on Provident Funds
Interest from provident funds exceeding certain limits is now taxable at the regular slab rate.
Offshore Tax Amnesty
A new provision allows repatriation of undisclosed offshore assets by paying a 15% tax.
Individual Income Tax Rates in Bangladesh (2025-2026)
Understanding the individual income tax rates in Bangladesh is crucial for proper tax filing. This section breaks down the latest tax slabs for the 2025-2026 assessment year, explains how to calculate your tax, and details available investment rebates to help you save.
Special Tax-Free Thresholds
While the general tax-free income limit is BDT 350,000, higher thresholds are available for certain taxpayers.
- 1BDT 400,000 for female taxpayers and senior citizens (65+).
- 2BDT 475,000 for persons with disabilities.
- 3BDT 500,000 for gazetted war-wounded freedom fighters.
Minimum Tax for Tax Filings
A minimum tax must be paid by individuals in city corporation areas, even if the calculated tax is lower.
- !BDT 5,000 for Dhaka North, Dhaka South, and Chattogram.
- !BDT 4,000 for other city corporations.
- !BDT 3,000 for areas outside city corporations.
Income Tax Calculator for Individuals
Calculate your estimated tax based on the 2025-26 Bangladesh tax slabs. Note the special thresholds if they apply to you.
Bangladesh Tax Slabs (2025-2026)
How to Calculate Investment Rebates
Individual taxpayers can claim a tax rebate by investing in approved sectors like savings certificates or stocks. The rebate is 15% of the "admissible amount".
Determining the Admissible Amount for Rebate:
This is the lowest of the following three values:
- Your actual eligible investment amount.
- 20% of your total taxable income.
- BDT 1 Crore (10,000,000).
Investment Rebate Calculator
Calculate your tax savings from eligible investments.
Surcharge on Net Worth
A surcharge applies if your net assets exceed BDT 4 Crore.
| Net Worth | Surcharge Rate |
|---|---|
| Up to BDT 4 Crore | Nil |
| BDT 4 Crore to BDT 10 Crore | 10% |
| BDT 10 Crore to BDT 20 Crore | 20% |
| BDT 20 Crore to BDT 50 Crore | 30% |
| Above BDT 50 Crore | 35% |
Corporate Tax Rates in Bangladesh & Company Provisions
This section provides a detailed guide on the corporate tax rate in Bangladesh and other key provisions for companies. While the main tax rates are unchanged, new rules on offshore amnesty and provident funds are important for company tax filings.
Business Entry & Company Incorporation in Bangladesh
Foreign investors can establish a business in Bangladesh as a liaison office, branch office, or private limited company. The process involves agencies like BIDA and RJSC.
Bangladesh Corporate Tax Rates (2025-2026)
The corporate tax rate in Bangladesh remains unchanged for the 2025-2026 assessment year.
| Company Type | Tax Rate |
|---|---|
| Publicly Traded Company (Listed) | 20% |
| Non-Publicly Traded Company (Non-listed) | 27.5% |
| One Person Company (OPC) | 20% |
| Association of Persons | 27.5% |
| Banks, Insurance & Financial Institutions (Listed) | 37.5% |
| Banks, Insurance & Financial Institutions (Non-listed) | 40% |
| Merchant Banks | 37.5% |
| Tobacco Product Companies | 45% (+2.5% surcharge) |
| Mobile Phone Operator (Listed & Non-listed) | 40% / 45% |
Related Policies & Tax Guides:
Offshore Tax Amnesty
A new provision allows Bangladeshi citizens to repatriate undisclosed offshore assets.
- Tax Rate: 15% on the net value of repatriated assets.
- Immunity: No questions asked by any authority regarding the source of the assets.
- Purpose: To bring foreign currency into the formal economy.
Tax on Capital Gains (Land/Real Estate)
Tax rates on gains from property transfers vary by location.
- Dhaka, Chattogram, Gazipur: Taxed at a specific rate per square meter OR 4% of the deed value (whichever is higher).
- Other City Corporations: 3% of the deed value.
- Other Areas: 2% of the deed value.
Tax on Provident Fund
Interest from an employee's contribution to a recognized provident fund is now taxable if it exceeds certain limits.
Taxability Rule: Any interest or accumulated balance exceeding BDT 150,000 or one-third of the employee's salary (whichever is lower) will be taxed at their applicable slab rate.
Fund Repatriation & Exit Strategy for Investors
Foreign investors must follow Bangladesh Bank guidelines for repatriating funds. A clear exit strategy is crucial for a smooth divestment process.
TDS Rates in Bangladesh (Tax Deducted at Source)
TDS (Tax Deducted at Source) is a key part of the tax collection process. The Income Tax Act 2023 specifies various TDS rates for payments to residents and non-residents.
TDS Rates on Services for Residents (Selected)
| Nature of Service | TDS Rate |
|---|---|
| Advisory or Consultancy Services | 10% |
| Professional Services (Doctor, Lawyer, Accountant) | 10% |
| Catering, Cleaning, Security Services | Varies (1% to 1.5%) |
| Media Buying Agency Commission | 10% |
| Rental Power Company Payments | 6% |
| Event Management Services | 10% |
TDS on Payments to Non-Residents
| Nature of Payment | TDS Rate |
|---|---|
| Advisory or Consultancy Fee | 20% |
| Royalty, Franchise, Technical Know-how Fee | 20% |
| Capital Gains | 20% |
| Interest | 20% |
| Digital Services (e.g., streaming, cloud) | 20% |
Other Key TDS Provisions
| Nature of Payment | TDS Rate |
|---|---|
| Contractors and Suppliers | Varies (Up to 7%) |
| Import of Goods | Varies by product |
| Export Proceeds | 1% |
| Bank Interest on Deposits | 10% (15% if no TIN) |
| Property Registration | Varies by location (Up to 4%) |
Tax Filing in Bangladesh: Compliance and Deadlines
Enhancing compliance is a major focus of the Income Tax Act 2023. This section covers crucial aspects of tax filing in Bangladesh, including filing methods, penalties, and the mandatory proof of return submission requirement.
How to File Taxes: Universal Self Assessment
The Universal Self Assessment scheme simplifies tax filing. Your submitted return is considered final, promoting trust and ease. However, the Deputy Commissioner of Taxes (DCT) can still audit returns to ensure accuracy.
Penalties for Non-Compliance
The act specifies clear penalties to discourage tax evasion.
| Offense | Penalty |
|---|---|
| Failure to file a return | 10% of last assessed tax (min BDT 1,000) + 50% for continued failure. |
| Using a fake TIN | Up to BDT 20,000. |
| Failure to deduct or pay TDS | Daily penalty and potential disallowance of the expense. |
| Concealing income | Penalty from 15% to 35% of tax evaded. |
Services Requiring Proof of Tax Return (PSR)
You must provide proof of your tax filing to access an expanded list of over 40 services.
- Applying for or renewing a trade license.
- Applying for a loan over BDT 5 lakh from a bank or financial institution.
- Becoming a director or sponsor of a company.
- Applying for or renewing registration of a motor vehicle.
- Registering land, building, or apartment in a city corporation or municipality.
- Applying for a credit card.
- Obtaining or maintaining a gas, electricity, or water connection for commercial purposes.
- Submitting a bill of entry for import or export.
- Obtaining an Import Registration Certificate (IRC) or Export Registration Certificate (ERC).
- Participating in a tender.
- Obtaining registration for a co-operative society.
- Applying for a license or renewal of a firearm.
- Obtaining or renewing membership of a professional body.
- Acting as a trustee or member of a governing body of a trust.
- Registering a marriage in a city corporation area.
- Admissions for children in English medium schools with annual fees over BDT 1 lakh.
- Opening a letter of credit (LC) for imports.
- Obtaining a drug license.
- Receiving any payment from the government or any other authority which is subject to tax deduction at source.
- Applying for a position in any government, semi-government, autonomous body, or local authority.
VAT in Bangladesh: Key Changes in Indirect Taxes
The government has also adjusted Value Added Tax (VAT) and Supplementary Duty (SD) to influence consumer behavior, protect local industries, and generate revenue.
VAT and Supplementary Duty Updates
- Software Services: A new 15% VAT is imposed on software production and distribution.
- Refrigerators and Freezers: VAT increased from 5% to 7.5%.
- Polypropylene Staple Fiber: VAT on import of this raw material is now fully exempted to support local industries.
- Mobile Phones and Internet Services: Supplementary Duty on services via mobile phones and internet modems has been increased.
- Construction Materials: SD on construction rods has increased.
- Other Products: Supplementary Duty has also increased on items like paper products, tissues, and some home appliances.
Official Resources & Government Links
For official guidelines on tax filing in Bangladesh, investment, and business, refer to these key government agency websites.
