Bangladesh Income Tax Guide for Individuals

Understanding personal income tax in Bangladesh is essential for anyone earning in the country—be it residents, foreign nationals, or self-employed professionals.

The system follows a progressive tax structure where higher income brackets are taxed at increasing rates, ranging from 0% to 25%.

Tax rates are revised annually by the Finance Act, and eligible taxpayers may receive rebates based on specific investments.

Special provisions are also in place for the third gender community, offering a higher tax-free income threshold.

Additionally, foreign nationals working in Bangladesh can take advantage of double taxation avoidance agreements.

This blog post breaks down the latest tax slabs, eligibility criteria, and available deductions, helping you stay compliant and make informed financial decisions.

1. The Basics of Personal Income Tax in Bangladesh

Bangladesh levies a progressive personal income tax, which means individuals pay higher rates as their income increases. This system ensures a more equitable tax burden and funds public services like healthcare, education, and infrastructure.

• Governing Law: Income Tax Ordinance, 1984
• Annual Updates: Finance Act
• Administered by: National Board of Revenue (NBR)

2. Who is Considered a Resident Taxpayer?

To be a resident for tax purposes, one must meet any of the following conditions:

• Stayed in Bangladesh for at least 182 days in a fiscal year
• Present for 90 days in the fiscal year and 365 days in the previous 4 years

3. Tax Slabs for Individual Taxpayers (FY 2021–2022)

Income Range (BDT)	Tax Rate
First 300,000	0%
Next 100,000	5%
Next 300,000	10%
Next 400,000	15%
Next 500,000	20%
Remainder	25%

Note: Senior citizens and women enjoy a tax-free threshold of BDT 400,000, and the third gender community BDT 350,000.

4. Investment Tax Rebate Opportunities

Rebates are available for eligible investments such as:

• Life insurance premiums
• Pension and provident funds
• Government savings certificates
• Tuition fees

Rebate: 15% of total eligible investment (capped at 25% of income or BDT 15M).

5. Tax Filing Requirements

Even if you’re below the taxable threshold, filing is required if you:

• Own a car or credit card
• Have a trade license
• Own property

Deadline: November 30 each year (subject to NBR notices)

6. Taxation for Foreign Nationals

• Non-residents taxed on Bangladesh-earned income
• Default tax rate: 30% (unless covered by a tax treaty)
• Must obtain TIN for employment or business

7. Third Gender Taxpayer Provisions

Special provision includes:

• Tax-free threshold of BDT 350,000
• Incentives for businesses employing third-gender individuals

8. Surcharges for High-Net-Worth Individuals

Net Wealth (BDT)	Surcharge
Over 30 million	10%
Over 100 million	15%
Over 200 million	25%

9. TIN Registration and e-Filing

Mandatory for:

• Tax filing
• Banking & property transactions
• Business registration

Available via NBR’s online portal.

10. Penalties and Non-Compliance

• Fines up to BDT 10,000
• Loss of business license
• Restricted access to government services

11. Tax Planning Tips

• Maximize investment rebates
• Keep receipts and records
• Consult a tax expert for complex income sources

Conclusion

Bangladesh’s personal income tax policy aims to ensure fairness while offering various benefits for taxpayers. With a progressive rate structure, investment rebates, and digital filing tools, compliance has never been easier.

As you plan your finances, staying informed and proactive will save money and avoid legal complications.