Introduction
Before discussing the tax rates in Bangladesh, let’s explore the different tax systems. Globally, tax systems are categorized into three main types: Progressive, Regressive, and Proportional. A Progressive tax system imposes higher tax rates on individuals with increasing income levels. Conversely, a Regressive tax system applies lower tax rates as income rises. In a Proportional tax system, a uniform tax rate is levied on all taxpayers regardless of income. Some nations adopt a Hybrid tax system, combining elements from various tax structures.
Bangladesh employs a Progressive tax system to levy income taxes. More than 65% of budget revenue comes from tax revenue in Bangladesh. In addition, The tax system uses two concepts: Income Year and Assessment Year. This guide provides all rates for the Assessment Year. This blog post will delve into the income tax rates in Bangladesh for the Income Year (IY) 2024-2025 and Assessment Year (AY) 2025-2026:
1. Individual Income Tax Rates:
Income tax rates for individual residents, Non-resident Bangladeshi, Hindu Undivided Family and Partnership firm for the Assessment Year 2025-2026 (Income Year 2024-2025) are as follows:
1.1 For regular taxpayers:
| Tax Slab AY 2025-26 | Tax Rate AY 2025-26 |
| Up to Tk. 3,50,000 | 0% |
| Next Tk. 1,00,000 | 5% |
| Next Tk. 4,00,000 | 10% |
| Next Tk. 5,00,000 | 15% |
| Next Tk. 5,00,000 | 20% |
| Next Tk. 20,00,000 | 25% |
| On Balance | 30% |
1.2 For other taxpayers:
Above is the tax exemption limit for regular taxpayers. The tax exemption limits for other types of taxpayers are as follows:
| Tax Payers Type | Exemption Limit AY 2025-26 In Taka |
| General Taxpayer | 3.50 lakhs |
| Women and & above 65 years of age | 4.00 lakhs |
| Third gender & Physically Challenged persons | 4.75 lakhs |
| Gazetted wounded freedom fighters | 5.00 lakhs |
Threshold increased for parents or legal guardians of physically challenged child/adopted child by Tk. 50,000 for each child. If father and mother both are tax payers, anyone can take this exemption.
1.3 For Non-Resident:
| Type | Rate |
| Non-Resident in Bangladesh (other than Company, AOP and Non-Resident Bangladeshi) | 30% |
2. Minimum Tax (Individual):
| Area | Minimum Tax (in Taka) |
| Dhaka & Chattogram City Corporation | 5,000 |
| Other City Corporation | 4,000 |
| Other than City Corporation area | 3,000 |
3. Corporate Tax rates:
Corporate tax rates for Company, AOP, Trust, Fund etc. (other than individuals mentioned above in clause 1) are as follows:
3.1 Company’s Registered Office in Bangladesh
Tax rates on all income (except dividend income) for companies having their registered office in Bangladesh:
| Type | Description | AY 2025-26 | Conditions 2025-26 |
| Listed | Publicly traded company that transfers shares worth more than 10% of its paid-up capital through IPO | 22.50% | Rebate 20% see (a) |
| Listed | Publicly traded company that transfers shares worth ten percent or less of its paid-up capital through IPO | 25% | Rebate 22.50% see (a) |
| OPC | One Person Company (OPC) | 22.50% | Rebate 20% see (a) |
| Non-listed | Others Company as defined in Income Tax Act, 2023 as a Company (except above) | 27.50% | Rebate 25% see (a) |
| Banks, FI, Insurance | Publicly traded bank, insurance, and financial institution (except merchant bank) | 37.50% | N/A |
| Banks, FI, Insurance | Non-publicly traded bank, insurance, and financial institution | 40% | N/A |
| Banks, FI, Insurance | Merchant bank | 37.50% | N/A |
| Tobacco | Company producing all sorts of tobacco items including cigarette, bidi, chewing tobacco, and gul | 45% (+ 2.5% Surcharge) | N/A |
| Mobile | Publicly traded mobile phone operator company holds at least 10% of its paid-up capital, out of which Pre-Initial Public Offering Placement cannot exceed 5% | 40% | Rebate N/A |
| Mobile | Non-publicly traded mobile operator company | 45% | Rebate N/A |
Conditions:
a. All types of income and receipts and all types of expenses and investments above 5 lakh Taka in each single transaction and above 36 lakh Taka in total annually must be done through bank transfer.
b. If conditions fulfilled reduced rates are applicable.
3.2 Other than Company
| Type | Description | Rates |
| Tobacco | Other than Company but producing all sorts of tobacco items including cigarette, bidi, chewing tobacco, and gul | 45% |
| Others | Other than Company (Trust, Fund, AOP and others ) | 27.5% see (a) |
| Society | Co-operative Society | 20% |
| Education | Private (Universities, Medical College, Dental College, Engineering College, IT related institutes) | 15% |
Conditions:
a. All types of income and receipts and all types of expenses and investments above 5 lakh Taka in each single transaction and above 36 lakh Taka in total annually must be done through bank transfer.
b. If conditions fulfilled reduced rates are applicable.
4. Surcharge
4.1 Individual
Surcharge tax rates on assessee being individual on Net assets and liabilities:
| Assets | Surcharge Rates |
| Up to 4 crores | Nil |
| Above 4 crores to 10 crores, OR, Owner of a motor car OR, Owner of a 8,000 square feet House Property | 10% |
| Above 10 crores to 20 crores | 20% |
| Above 20 crores to 50 crores | 30% |
| Above 50 crores | 35% |
4.2 Others
Surcharge tax rates on business income:
| Assets | Surcharge Rates |
| Tobacco (Company producing all sorts of tobacco items including cigarette, bidi, chewing tobacco, and gul) | 2.5% |
| All Education Institutes (if no facilities kept for Physically Challenged Persons) | 2.5% |
4.3 Environmental (Motor Vehicle)
Environmental Surcharge tax rates on Motor Vehicle (except Bus, Mini Bus, Coaster, Prime Mover, Truck, Lorry, Tank Lorry, Pickup Van, Human Hauler, Autorickshaw & Motor cycle):
| Types | Surcharge Rates |
| Up to 1,500 CC OR, 75 Kilo Watt | Tk. 25,000 |
| Above 1,500 CC to 2,000 CC OR, Above 75 Kilowatt to 100 Kilowatt | Tk. 50,000 |
| Above 2,000 CC to 2,500 CC OR, Above 100 Kilowatt to 125 Kilowatt | Tk. 75,000 |
| Above 2,500 CC to 3,000 CC OR, Above 125 Kilowatt to 150 Kilowatt | Tk. 150,000 |
| Above 3,000 CC to 3,500 CC OR, Above 150 Kilowatt to 175 Kilowatt | Tk. 200,000 |
| Above 3,500 CC OR, Above 175 Kilowatt | Tk. 350,000 |
5. Rebate
Employers in Bangladesh can claim tax rebates by hiring individuals from:
| Type | Description | Rebate Rates |
| Physically challenged person | If employs more than 10% of the workforce OR at least 25 employees (whichever is higher) | 5% of the payable tax OR 75% of the total salary paid to these workforce (whichever is lower) |
| Third gender | If employs more than 10% of the workforce OR at least 25 employees (whichever is higher) | 5% of the payable tax OR 75% of the total salary paid to these workforce (whichever is lower) |
Conclusion
In conclusion, understanding the income tax rates in Bangladesh is essential for individuals and businesses alike to ensure compliance and optimize financial planning. As the country continues to modernize its revenue system, greater transparency, digital filing systems, and incentives for inclusivity are shaping a more responsive and equitable tax environment. Staying updated and seeking expert advice can help taxpayers navigate their obligations with confidence and clarity.
Read more: TDS in Bangladesh.
This article is written by Monir Bhuiyan, a member of ACCA (Association of Chartered Certified Accountants) and ICAB (Institute of Chartered Accountants of Bangladesh) Also completed Master of Accountancy in Taxation from Dhaka University.
%20in%20Bangladesh:%20A%20Comprehensive%20Overview){kind=link}
