Income Tax Rates in Bangladesh 2026: Slabs, Thresholds, Minimum Tax and Rebates

Income tax rates in Bangladesh for assessment year 2026-27

Income tax rates in Bangladesh for 2026 are set by the Finance Act 2026, Act No. 96 of 2026, which received assent and was published in the Bangladesh Gazette on 30 June 2026.[2] This guide states the position for assessment year 2026-27, the return season now open, which taxes income earned from 1 July 2025 to 30 June 2026. The same rates and thresholds are fixed for assessment year 2027-28, which taxes income earned in the current financial year to 30 June 2027.[1] [3] The general tax-free threshold is Tk 400,000, the first taxable band is 10% and the top rate is 30%.

The guide covers every element an individual taxpayer, employer or adviser needs: the slab structure, the higher thresholds for women, senior citizens, persons with disabilities, third-gender taxpayers and gazetted freedom fighters, minimum tax, the investment rebate, the net-wealth surcharge, the new sliding-scale filing rules and the corporate rates by type of company. It also sets the 2026 position against the 2023 and 2025 rates, so that anyone comparing past returns can see exactly what has changed and why the same salary can now produce a different tax bill.

Summary: For assessment years 2026-27 and 2027-28, a general individual taxpayer in Bangladesh pays nothing on the first Tk 400,000 of taxable income, then 10% on the next Tk 300,000, 15% on the next Tk 400,000, 20% on the next Tk 500,000, 25% on the next Tk 2 million and 30% on the balance. Women and those aged 65 or over start at Tk 450,000; persons with disabilities and third-gender taxpayers at Tk 525,000; war-wounded gazetted freedom fighters and gazetted July fighters at Tk 550,000. Minimum tax is Tk 5,000, or Tk 1,000 for first-time filers, and a 35% top rate is scheduled from assessment year 2028-29.

Key point: Fix the year before you apply any rate. Under the Income Tax Act 2023 the assessment year runs from 1 July and taxes the income of the financial year immediately before it. The Tk 400,000 threshold therefore governs the return now being filed for income earned in 2025-26, and the 5% early-filing rebate is available only for returns filed between 1 July and 30 September.

At a glance

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Table of Contents

How income tax rates in Bangladesh are set each year

The charging statute is the Income Tax Act 2023 (Act No. XII of 2023), which replaced the Income-tax Ordinance 1984 and is administered by the National Board of Revenue (NBR).[1] The Act provides the machinery: who is taxed, how income is classified and computed, minimum tax, surcharge, withholding and returns. The rates themselves change through the annual Finance Act. Section 18(4) of the Act, for example, provides that surcharge is charged at the rate fixed by an Act of Parliament.[1]

For 2026 that Act is the Finance Act 2026. The budget was presented to Parliament on 11 June 2026 by Finance Minister Amir Khosru Mahmud Chowdhury, the Finance Bill was passed by voice vote on 29 June 2026 and the Act was gazetted the following day as Act No. 96 of 2026.[9] [8] [2] It is the first full budget law of the elected government that took office after the February 2026 election, following two years in which the interim government legislated by ordinance.

Assessment year, income year and why the label matters

Section 2 of the Income Tax Act 2023 defines the assessment year as the twelve-month period beginning on 1 July each year, and the income year as the financial year immediately preceding the assessment year.[1] Assessment year 2026-27 therefore runs from 1 July 2026 to 30 June 2027 and taxes income earned between 1 July 2025 and 30 June 2026. The NBR calls the return season that opened in July 2026 the 2026-27 tax year.[11]

Commentators do not use the labels consistently. The press and PwC's Finance Act summary describe the Tk 400,000 threshold as applying to 2026-27 and 2027-28, using assessment-year labels; PwC's Worldwide Tax Summaries shows the same figures against financial years 2025-26 and 2026-27, which are the corresponding income years.[8] [3] [4] The substance is the same. In this guide every year is an assessment year unless stated otherwise.

Rates fixed for five years at a time

A notable feature of the 2026 Act is forward legislation. Rather than leaving each year to the next budget, it sets individual thresholds for assessment years 2026-27 through 2030-31 and corporate rates for the same five-year window.[3] The stated aim is a stable, predictable regime. In practice, a later Finance Act can still change any figure, so the forward rates are a planning baseline rather than a guarantee.

Individual income tax rates in Bangladesh for 2026-27

Individual income tax rates in Bangladesh are progressive. Total taxable income is divided into bands, and each band is taxed at its own rate. The same band structure applies to resident individuals and non-resident Bangladeshis; only the size of the first, tax-free band varies with the taxpayer's category.[3] [4]

For assessment years 2026-27 and 2027-28 the bands above the tax-free threshold are 10% on the next Tk 300,000, 15% on the next Tk 400,000, 20% on the next Tk 500,000, 25% on the next Tk 2 million and 30% on the balance.[3] For a general taxpayer, the 30% rate therefore begins once taxable income passes Tk 3.6 million, and the tax on the first Tk 3.6 million is Tk 690,000 on our arithmetic.

What changed from the 2025-26 slab structure

The most visible change is the removal of the 5% band. When the budget was presented on 11 June 2026, the slab table opened at 10% and experts warned that some taxpayers would pay more as a result.[9] Under the assessment year 2025-26 structure, a general taxpayer paid nil on Tk 350,000, 5% on the next Tk 100,000, 10% on the next Tk 400,000, 15% and 20% on two further bands of Tk 500,000 each, 25% on the next Tk 2 million and 30% on the balance.[12]

Because the new threshold is Tk 50,000 higher while the first rate doubles, the two structures produce the same tax up to Tk 700,000 of taxable income on our calculations. Above that point the new 15% and 20% bands arrive earlier. A general taxpayer with taxable income of Tk 1 million paid Tk 67,500 for assessment year 2025-26 and pays Tk 75,000 for 2026-27. Middle-income salaried taxpayers, not the lowest earners, bear most of the change.

Worked examples for a general taxpayer

Taxable income of Tk 1 million: nil on the first Tk 400,000, Tk 30,000 on the next Tk 300,000 at 10% and Tk 45,000 on the remaining Tk 300,000 at 15%, a total of Tk 75,000. Taxable income of Tk 2 million: Tk 30,000, then Tk 60,000 on Tk 400,000 at 15%, Tk 100,000 on Tk 500,000 at 20% and Tk 100,000 on the remaining Tk 400,000 at 25%, a total of Tk 290,000. These figures are before the investment rebate, any early-filing rebate and credit for tax already deducted at source.

A woman taxpayer with the same Tk 1 million starts from a Tk 450,000 threshold: Tk 30,000 at 10% and Tk 37,500 on Tk 250,000 at 15%, a total of Tk 67,500. The higher threshold is worth Tk 7,500 at this level of income, and the saving rises for categories with larger thresholds.

The 35% rate scheduled from 2028-29

The Finance Act 2026 also legislates the next step. From assessment year 2028-29 the band structure keeps the 10%, 15%, 20% and 25% bands, adds a 30% band of roughly Tk 26.3 million and applies 35% to the rest of the income.[3] [4] PwC shows the 30% band as Tk 26.35 million in the first two of those years and Tk 26.30 million later, which places the start of the 35% rate at about Tk 30 million of taxable income for a general taxpayer once the higher thresholds of those years are added.[4] High earners who can influence the timing of bonuses, property sales or other one-off receipts should model the difference now.

Tax-free thresholds by taxpayer category

The first band of income is taxed at nil, and its size depends on who the taxpayer is. For assessment years 2026-27 and 2027-28 the thresholds are Tk 400,000 for general taxpayers; Tk 450,000 for women and senior citizens aged 65 or over; Tk 525,000 for persons with disabilities; Tk 525,000 for third-gender taxpayers; and Tk 550,000 for war-wounded gazetted freedom fighters and gazetted July fighters.[3] [4]

How Parliament raised the threshold

The budget proposed a general threshold of Tk 375,000 for 2026-27 and 2027-28, Tk 25,000 above the previous Tk 350,000.[9] During the budget debate Prime Minister Tarique Rahman asked for more relief, and the Finance Minister amended the Bill: Tk 400,000 for 2026-27 and 2027-28, Tk 450,000 for 2028-29 and 2029-30 and Tk 500,000 for 2030-31, in place of the proposed Tk 375,000, Tk 400,000 and Tk 450,000.[8] The category thresholds moved up in step.[3]

Parents and guardians of persons with disabilities

A parent or legal guardian of a person with a disability receives an additional Tk 50,000 on top of the threshold that otherwise applies to them.[4] The budget described this as an extra Tk 50,000 per dependent child or ward.[9] Where both parents are taxpayers, only one of them may claim it, so families should decide in advance which parent's return carries the allowance.[12]

Women, senior citizens and freedom fighters in practice

The higher thresholds are not optional reliefs that must be claimed by application; they are the starting point of the slab calculation for the relevant category. The practical points are evidential. A senior citizen should confirm that the age test is met in the relevant income year, a taxpayer with a disability should hold the certificate that the NBR recognises, and the freedom-fighter and July-fighter thresholds apply only to those named in the official gazettes. The Act expresses the freedom-fighter category as war-wounded gazetted freedom fighters, so the gazette status and the war-wounded classification should both be documented.[3]

Two further changes matter for particular communities. The Finance Act 2026 extended the exemption for indigenous communities in the three hill districts and the plains so that it now covers salary income, in addition to business, agricultural and other earnings.[8] Salaried employees generally also benefit from the employment-income exemption of one-third of income from employment or Tk 500,000, whichever is lower.[5]

Income tax rates in Bangladesh in 2023 and 2025: the historic comparison

Many taxpayers and finance teams still work from the rates published in 2023, and several earlier TRW notes addressed that year. The comparison below shows how far the structure has moved in three years.

The 2023-24 budget raised the general threshold to Tk 350,000 from Tk 300,000, the level set in fiscal 2020-21. Above it, income was taxed at 5% on the next Tk 100,000, 10% on the next Tk 300,000, 15% on the next Tk 400,000, 20% on the next Tk 500,000 and 25% on the balance.[14] The category thresholds that year were Tk 400,000 for women and those over 65, Tk 475,000 for persons with disabilities and third-gender taxpayers, and Tk 500,000 for war-wounded gazetted freedom fighters.[14]

By assessment year 2025-26 the general threshold remained Tk 350,000, but the 25% rate had been confined to a Tk 2 million band, with 30% on the balance. The category thresholds stood at Tk 400,000 for women and senior citizens, Tk 475,000 for third-gender taxpayers and persons with disabilities, and Tk 500,000 for war-wounded gazetted freedom fighters and July fighters.[12]

The direction is clear. Thresholds have risen modestly, the lowest rate has doubled, the top rate has climbed from 25% to 30% with 35% scheduled, and minimum tax has been simplified. Anyone comparing income tax rates in Bangladesh across years for a salary review, an expatriate assignment or a tax-equalisation policy should use the rates for the correct assessment year, not the year in which the money was received.

Minimum tax for individuals

Minimum tax is a floor. Once an individual's total income exceeds the tax-free threshold, the tax payable cannot be less than the minimum, even if the slab calculation produces a lower figure. For the 2026-27 return season the minimum is Tk 5,000 for existing taxpayers wherever they live, and Tk 1,000 for taxpayers filing a return for the first time.[4] [10] The NBR retained the first-time filer concession for 2026-27.[10]

The end of location-based minimum tax

Until the 2025 reforms, minimum tax depended on where the taxpayer lived: Tk 5,000 in the Dhaka North, Dhaka South and Chattogram city corporations, Tk 4,000 in other city corporations and Tk 3,000 elsewhere. The 2025-26 budget proposed a single Tk 5,000 figure for all areas, together with the Tk 1,000 rate for first-time taxpayers.[13] [12] For taxpayers outside the major cities, the flat rate is a real increase at the bottom of the scale.

How minimum tax works in practice

Take a general taxpayer with taxable income of Tk 420,000 for assessment year 2026-27. The slab calculation gives Tk 2,000, being 10% of the Tk 20,000 above the threshold. An existing taxpayer pays the Tk 5,000 minimum instead. A first-time filer with the same income pays Tk 2,000, because the computed tax already exceeds the Tk 1,000 floor. Individuals whose income does not exceed the threshold pay no minimum tax, although they may still need to file a return where the law or a transaction requires one.

Investment rebate, deductions and early-filing rebate

The main relief that reduces the tax produced by the slabs is the investment rebate. It is a credit against tax, not a deduction from income, and it is available to resident individuals and non-resident Bangladeshis.[5]

The investment rebate after the Finance Act 2026

The rebate is the lowest of three amounts: 3% of taxable income, excluding exempt income, income taxed at a reduced rate, share of profit from firms and associations, and income subject to final tax; 10% of eligible investment and expenditure; or Tk 750,000.[5] The Finance Act 2026 cut the investment limb from 15% to 10% of actual investment and the cap from Tk 1 million to Tk 750,000.[3] [12]

The effect is material for disciplined savers. A taxpayer with taxable income of Tk 1.5 million who invests Tk 300,000 in eligible instruments previously obtained the lower of Tk 45,000 (3% of income) and Tk 45,000 (15% of investment). Under the new rule the investment limb falls to Tk 30,000, which is now the rebate. To recover the full 3% limb, the same taxpayer would need to invest Tk 450,000.

Which investments qualify

The eligible investments are listed in Part 3 of the Sixth Schedule to the Income Tax Act 2023.[1] They include contributions by the employee and employer to a recognised provident fund, contributions to an approved superannuation fund, and life insurance premiums for the taxpayer, spouse or minor children, capped at 10% of the sum assured.[5] From 2026-27 the provident fund must be recognised for contributions to qualify, and premature withdrawal from eligible investments triggers pro-rated additional tax.[3] Employers running unrecognised funds should regularise them now, or their staff lose the rebate.

Donations to approved charitable hospitals, disability welfare organisations, Zakat funds and other approved bodies also qualify, and donations to a specified list of charitable organisations attract a rebate until 30 June 2030.[5]

Rebate for filing early

A separate rebate rewards timing. An individual who files between 1 July and 30 September receives a rebate of 5% of tax liability, capped at Tk 25,000.[3] On the Tk 290,000 liability in our earlier example, filing by 30 September saves Tk 14,500. The rebate is the simplest saving in the system, and in our experience the one most often lost through delay in gathering documents.

Surcharge on net wealth

Wealthy individuals pay a surcharge calculated as a percentage of their income tax, with the band determined by net wealth shown in the statement of assets and liabilities. There is no surcharge where net wealth does not exceed Tk 40 million. Above that, the surcharge is 10% of tax where net wealth exceeds Tk 40 million up to Tk 100 million, or where the taxpayer owns more than one motor car or house property of more than 8,000 square feet; 20% from Tk 100 million to Tk 200 million; 30% from Tk 200 million to Tk 500 million; and 35% above Tk 500 million.[4]

The bands were unchanged across the assessment years covered by the 2025 Ordinance.[12] The Finance Act 2026 now expressly defines surcharge and includes it within the overall definition of tax.[3] In practice that means surcharge should be treated like any other tax for assessment, recovery and dispute purposes. One point is easily overlooked: the car and house-size tests can trigger the 10% surcharge even where net wealth is below Tk 40 million. Because surcharge is a percentage of tax, it also rises automatically with every increase in the slab rates.

Non-residents, expatriates and special income

A non-resident individual, other than a non-resident Bangladeshi, is taxed at a flat 30% on Bangladesh-source income without the benefit of the tax-free threshold.[3] [4] The Finance Act 2026 also provides that a non-resident individual without a permanent establishment in Bangladesh is no longer required to file a return.[3] For most short-term visitors, therefore, tax withheld at source is now the end of the matter.

Expatriates who become resident are taxed on the ordinary slabs and receive the general threshold, which is why residence planning on the timing of arrival and departure can change the result substantially. A non-resident Bangladeshi keeps access to the slabs and the investment rebate.[4] [5] Employers of foreign staff should also check work-permit and remittance arrangements, which TRW covers in its notes on employment contracts and foreign-currency receipts.

Income that is no longer final tax

Two changes in the Finance Act 2026 bring more income into the slab calculation. Tax withheld on profit from sanchaypatra (government savings certificates) is no longer treated as a final settlement, and capital gains on the transfer of property are no longer regarded as final tax.[3] In both cases the income now forms part of total income and is taxed at the individual's slab rates, with credit for the tax already deducted. Retired taxpayers who relied on savings certificates and individuals who sold land or flats should expect a higher bill if their marginal rate exceeds the withholding rate.

Salaried employees, by contrast, see little change in mechanics. Employers deduct tax monthly on estimated annual salary using the slab rates, and the employee claims credit for that deduction in the return. Employers must use the slab rates for the right assessment year when computing withholding.

Return deadlines and the sliding-scale filing rules

The Income Tax Act 2023 originally fixed 30 November following the end of the income year as Tax Day for individuals and other non-company taxpayers, with 30 June following the income year for individuals filing for the first time.[1] The Finance Act 2026 replaced the single cut-off for individuals and Hindu undivided families with a sliding scale through the assessment year.[3]

• Filed from 1 July to 30 September: rebate of 5% of tax liability, up to Tk 25,000.
• Filed from 1 October to 31 December: no rebate and no additional tax.
• Filed from 1 January to 31 March: additional tax of 2%, minimum Tk 3,000.
• Filed from 1 April to 30 June: additional tax of 5%, minimum Tk 5,000.

The NBR's power to extend the filing date by one month has been repealed, so there will be no routine end-of-November extension in the 2026-27 season.[3] Returns filed later are delayed returns: a taxpayer who files voluntarily pays additional tax of 10% of tax payable or Tk 5,000, whichever is higher, rising to 15% or Tk 10,000 where the return is filed in response to a reassessment notice.[3]

E-return and the statement of assets and liabilities

Online filing through the NBR e-return portal is now mandatory for individual taxpayers, effective 28 June 2026. Taxpayers aged 65 or over, persons with certified disabilities, Bangladeshis living abroad, legal representatives of deceased taxpayers and foreign nationals working in Bangladesh may still file on paper.[6] The NBR opened the e-return service for the 2026-27 tax year in July 2026.[11]

The return must be accompanied by a statement of assets and liabilities, including living expenses, or it is treated as incomplete.[6] The 2025 Ordinance required the full statement where gross wealth exceeds Tk 4 million, the taxpayer owns a motor car, holds a house or apartment in a city corporation area, is a shareholder director or owns property abroad.[12] Eligible salaried and investment-income taxpayers benefit from automated refunds: the return is processed within 120 days of filing and refunds are paid electronically.[3]

Advance tax

Taxpayers with significant non-salary income may have to pay advance tax in four instalments on 15 September, 15 December, 15 March and 15 June.[6] The Finance Act 2026 raised the threshold for compulsory advance tax from Tk 0.6 million to Tk 1 million.[3]

Corporate tax rates by company type

Corporate income tax rates in Bangladesh were held steady for 2026-27. Presenting the budget, the Finance Minister proposed keeping existing corporate rates unchanged to give investors a stable regime over the medium term.[10] The Finance Act 2026 fixes the corporate rates for assessment years 2026-27 to 2030-31, with reduced rates for some companies that route all transactions through banking channels.[3] Our detailed guide to corporate income tax in Bangladesh covers computation, allowances and withholding.

The table follows PwC's summary of the Act.[3] At budget stage the government also described merchant banks as taxed at 27.5%, publicly traded mobile operators with at least 10% IPO shareholding at 40%, and tobacco manufacturers as paying a 2.5% surcharge in addition to the 45% rate.[10] The concessional rate for private universities and colleges was proposed at 10% and reduced to 5% in the final Act.[10] [3] A mobile operator that transfers at least 20% of its paid-up capital through an IPO receives a 10% rebate on its income tax in the year of transfer.[3]

The reduced rates for listed and non-listed companies depend on the company's receipts and payments running through banks. Under the 2025 Ordinance those conditions extended to all income and receipts and to large single and annual payments, and for 2026-27 onward all income for the year must be received through bank transfer.[12] A single cash receipt can cost a company the concession for the whole year. Companies file their returns by the fifteenth day of the ninth month after the end of the income year, or 15 September if that is later, and earn a 5% rebate, capped at Tk 25,000, by filing at least two months before the due date.[7]

Calculating and filing your individual return

Applying the rates correctly is a sequence, not a single calculation. The steps below reflect the order in which TRW reviews an individual return.

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Common mistakes to avoid

The errors we see most often are avoidable. Taxpayers apply the previous year's slabs to the current return, forget that sanchaypatra profit and property gains are no longer final, assume minimum tax still varies by location, claim the investment rebate at the old 15% rate or on an unrecognised provident fund, and miss the 30 September deadline for the early-filing rebate. Wealthy taxpayers miss the car and house-size tests for surcharge. Each error is cheap to prevent and expensive to correct once an assessment or audit has begun.

Disputes about the application of the slabs, rebates or surcharge are resolved through the appeal structure of the Income Tax Act 2023, and our overview of tax law in Bangladesh explains the appeal tiers and the pre-deposit rules. TRW's tax compliance practice reviews returns before filing, and our tax disputes team acts where the NBR challenges a return.

What to watch on income tax rates in Bangladesh

Three points will shape income tax rates in Bangladesh over the next two years. First, the 35% top rate from assessment year 2028-29 will raise effective rates for the highest earners and increase the value of timing decisions. Second, the move away from final-tax treatment for savings and property income widens the base for middle-income households. Third, mandatory e-return, automated refunds and data matching with withholding records will make discrepancies easier for the NBR to detect.[3] [6]

Every rate in this guide can be changed by the next Finance Act, usually presented in June and effective from 1 July. Confirm the assessment year, check the current official text and keep evidence for every threshold, rebate and credit claimed.

Frequently asked questions

What are the income tax rates in Bangladesh for 2026-27?

For a general individual taxpayer: nil on the first Tk 400,000, 10% on the next Tk 300,000, 15% on the next Tk 400,000, 20% on the next Tk 500,000, 25% on the next Tk 2 million and 30% on the balance, for assessment years 2026-27 and 2027-28.[3]

Which income does assessment year 2026-27 cover?

Income earned in the income year from 1 July 2025 to 30 June 2026. The Income Tax Act 2023 defines the income year as the financial year immediately preceding the assessment year.[1]

What is the tax-free income threshold for women and senior citizens?

Tk 450,000 for assessment years 2026-27 and 2027-28, rising to Tk 500,000 for 2028-29 and 2029-30 and Tk 550,000 for 2030-31.[3]

What threshold applies to persons with disabilities and freedom fighters?

Tk 525,000 for persons with disabilities and third-gender taxpayers, and Tk 550,000 for war-wounded gazetted freedom fighters and gazetted July fighters. Parents or guardians of a person with a disability receive an extra Tk 50,000.[3] [4]

What is the minimum income tax for individuals?

Tk 5,000 nationwide once income exceeds the tax-free threshold, and Tk 1,000 for taxpayers filing for the first time.[4] [10]

How is the investment rebate calculated now?

It is the lowest of 3% of taxable income, 10% of eligible investment and Tk 750,000. The Finance Act 2026 reduced the investment limb from 15% and the cap from Tk 1 million.[3] [5]

When should I file my return to get the rebate?

Between 1 July and 30 September, for a rebate of 5% of tax up to Tk 25,000. Filing from October to December carries no adjustment; later filing attracts additional tax.[3]

Who pays the wealth surcharge?

Individuals with net wealth above Tk 40 million, or who own more than one car or house property above 8,000 square feet. The surcharge runs from 10% to 35% of tax.[4]

How are non-residents taxed?

Non-resident individuals other than non-resident Bangladeshis pay a flat 30%. A non-resident without a permanent establishment in Bangladesh no longer has to file a return.[3]

What is the general corporate tax rate?

27.5% for non-listed companies, or 25% where bank-transfer conditions are met. Listed companies pay 22.5% or 25%, with lower rates on the same conditions.[3]