Income Tax in Bangladesh: A Comprehensive Overview
1. Introduction
Income tax in Bangladesh is governed by the Income Tax Act, 1984, and administered by the National Board of Revenue (NBR) under the Ministry of Finance. It is one of the major sources of government revenue and plays a vital role in economic development. Every individual, company, or entity earning income in Bangladesh is subject to taxation under specific rules, exemptions, and rates.
2. Taxpayers in Bangladesh
Income tax is applicable to both residents and non-residents in Bangladesh. Taxpayers can be broadly classified into:
Individual taxpayers
Firms (Partnerships)
Companies (Public and Private Limited)
Non-resident persons
Other entities (e.g., NGOs, charitable trusts, associations)
3. Income Heads for Taxation
According to Bangladeshi law, income is categorized into the following heads:
Salaries – Income from employment.
Interest on Securities – Earnings from government or corporate securities.
Income from House Property – Rent and other related income from property.
Agricultural Income – Earnings from agricultural activities (partially exempt under certain conditions).
Income from Business or Profession – Business profits, consultancy fees, etc.
Capital Gains – Profit from the sale of shares, land, or assets.
Income from Other Sources – Income not covered above (dividends, royalties, lottery winnings, etc.).
4. Residential Status and Tax Implication
Resident: A person who stays in Bangladesh for 182 days or more in a year, or 90 days or more in a year and 365 days or more in the previous 4 years.
Residents are taxed on their worldwide income.
Non-Resident: Anyone who does not meet the above criteria.
Non-residents are taxed only on income earned in Bangladesh.
5. Tax-Free Income Thresholds (2024-25 Example)
Tax-free income limits vary based on category:
General individual taxpayer: BDT 3,50,000
Female taxpayers & taxpayers above 65 years: BDT 4,00,000
Physically challenged persons: BDT 4,75,000
Freedom fighters (gallantry award holders): BDT 5,00,000
6. Income Tax Rates (Individuals, FY 2024-25)
Progressive slab system is applied:
Up to threshold → 0%
Next BDT 1,00,000 → 5%
Next BDT 4,00,000 → 10%
Next BDT 5,00,000 → 15%
Next BDT 6,00,000 → 20%
Next BDT 30,00,000 → 25%
Above BDT 50,00,000 → 30%
7. Corporate Tax Rates
Listed companies: 20% – 25%
Non-listed companies: 27.5% – 30%
Banks, financial institutions, insurance companies: 37.5% – 40%
Cigarette/tobacco companies: 45% or higher
One Person Companies (OPC): 25%
8. Tax Deducted at Source (TDS) / Withholding Tax
Certain incomes are subject to deduction at source (advance collection of tax):
Salaries (based on salary slabs)
Contractor/supplier payments
Rent payments
Export earnings
Bank interest
Dividend income
Fees paid to non-residents
9. Tax Rebates and Incentives
Taxpayers can avail rebates for:
Investment in government savings certificates, insurance premiums, deposits, etc.
Charitable donations.
Contribution to pension funds.
There are also incentives for:
Export-oriented industries.
IT/Software companies.
Green industry investments.
Special Economic Zones (SEZs).
10. Tax Filing and Compliance
Tax Year: July 1 – June 30 (Bangladesh fiscal year).
Return Submission Deadline: November 30 of the assessment year (may be extended by NBR).
TIN (Taxpayer Identification Number): Mandatory for filing returns.
E-TIN: Electronic registration system introduced for convenience.
E-filing: NBR provides an online portal for income tax return filing.
11. Penalties for Non-Compliance
Failure to comply with income tax rules may result in:
Penalty for late submission of returns.
Additional tax for concealment of income.
Prosecution in cases of deliberate tax evasion.
12. Recent Developments
Gradual digitization of income tax filing through the NBR Online Tax Portal.
Expansion of withholding tax net.
Incentives for startups and small enterprises.
Emphasis on broadening the tax base to reduce dependency on indirect taxes (like VAT).
✅ Summary:
Income tax in Bangladesh is a structured system aimed at ensuring equitable contribution to the national revenue. While individuals enjoy progressive tax rates with specific exemptions, corporate entities face higher rates depending on industry type. Compliance, timely return filing, and availing of rebates can significantly ease the tax burden for taxpayers.