How to Calculate Income Tax in Bangladesh (2025-26)

By the Rebate Bhai team · Updated 17 October 2026 · Figures checked against the NBR Income Tax Guide 2026-27

Your income tax for income year 2025-26 (July 2025 to June 2026) is worked out in nine steps and reported in assessment year 2026-27. The arithmetic is simple once you know which figure feeds which step. Below is each step with the rule from the NBR's Income Tax Guide 2026-27, then two complete examples. The calculator does all of this for you, but knowing the steps lets you check it — and plan your investments before the year ends.

Step 1 — Sort your income into heads

The Income Tax Act 2023 groups all income into seven heads: employment, rent, agriculture, business or profession, capital gains, income from financial assets (bank and Sanchaypatra interest, dividends) and income from other sources. Add up each head for the whole income year. Interest counts even when the bank or post office has already deducted tax from it — add the gross interest here and claim the tax deducted in step 8.

Step 2 — Take the salary exemption

If you are an employee, one-third of your employment income or ৳5,00,000, whichever is lower, is exempt. On a ৳12,60,000 salary that is ৳4,20,000; from ৳15,00,000 a year upward it is always ৳5,00,000. A few receipts are not salary at all: travel and daily allowances spent wholly on official duty, the premium your employer pays for group insurance, and medical costs reimbursed under a group policy.

Step 3 — Apply your tax-free limit

Your total income after the salary exemption is taxed at 0% up to your tax-free limit for assessment year 2026-27:

A parent or legal guardian of a child with a disability adds ৳50,000 to the limit for each such child; if both parents are taxpayers, only one of them gets it. Read the tax-free limit guide →

Step 4 — Apply the slabs to the rest

Only the first row differs between categories; the later slabs are the same width for everyone. There is no 5% slab any more — the first taka above your limit is taxed at 10%.

Step 5 — Tax special-rate income separately

Some income never enters the slabs. A listed-share gain above the yearly ৳50,00,000 exemption is taxed at 15%, as is land sold more than five years after you acquired it; a gain on personal gold or jewellery is taxed at 5%. Work these out on their own and add them to the slab tax. In the NBR's Example 12, ৳15,00,000 of business profit carries ৳1,70,000 of slab tax and a ৳60,00,000 share gain adds ৳1,50,000 — 15% of the ৳10,00,000 above the exemption. Capital gains guide →

Step 6 — Subtract the investment rebate

Your rebate is the lowest of three figures: 3% of your total income (leaving out exempt income, special-rate income, firm-share income and income under final tax), 10% of your eligible investment for the year, or ৳7,50,000. Eligible investment includes DPS up to ৳1,20,000 a year, Sanchaypatra and government securities up to ৳5,00,000, life insurance premiums, provident-fund contributions, the Universal Pension Scheme, new investment in mutual funds and listed shares, and approved donations. Read the rebate guide →

Step 7 — Check the minimum tax

If your total income is above your tax-free limit, you pay at least ৳5,000 — or ৳1,000 if you are a new taxpayer — even when the rebate would take your tax lower, to zero or below. The floor is now the same everywhere in Bangladesh; it no longer depends on where you live. Below your limit there is no minimum tax. In the NBR's Example 22, a new taxpayer with ৳4,30,000 of income owes ৳3,000, and a ৳96,000 DPS earns a ৳9,600 rebate — more than the tax. He still pays the ৳1,000 new-taxpayer minimum.

Step 8 — Subtract tax already paid

Tax deducted at source — from your salary, bank interest or Sanchaypatra interest — and any advance tax you paid during the year are credited against the result. What remains is the tax you pay with your return (section 173). Keep the certificates and challans: the NBR is explicit that without proof of the deduction you don't get the credit.

Step 9 — Check when you file

The same tax costs different amounts depending on when you file in assessment year 2026-27: 5% less (up to ৳25,000) for returns filed by 30 September 2026, no change from October to December, and at least ৳3,000 more from January 2027. Filing guide →

Example 1 — ৳80,000 a month

On ৳80,000 a month your annual salary is ৳9,60,000. The one-third exemption removes ৳3,20,000, leaving ৳6,40,000 of total income. Applying the general slabs gives ৳24,000 of tax. Investing about ৳1,90,000 earns a ৳19,000 rebate and brings the tax to ৳5,000. That is as far as investing helps: a larger rebate would only push the tax under the ৳5,000 minimum, which then applies anyway. See the full ৳80,000 breakdown →

Example 2 — the NBR's own worked case

Example 23 in the Income Tax Guide follows a private-sector employee in Chattogram with a ৳12,60,000 salary. He paid ৳50,000 of life-insurance premium, put ৳1,50,000 into a DPS and bought ৳1,00,000 of Sanchaypatra.

Two details are worth noticing. The 3% cap binds, not the 10% one, so his last ৳18,000 of investment earned no extra rebate. And the DPS counts only up to ৳1,20,000, however much he paid in. Filed by 30 September 2026, the ৳1,290 incentive would cut his bill to ৳24,510; filed in January–March 2027, the ৳3,000 minimum charge would raise it to ৳28,800.

Mistakes that change the answer

• Applying the tax-free limit to gross salary. It applies after the one-third exemption.
• Counting the whole DPS deposit. Only ৳1,20,000 a year is eligible.
• Leaving out interest because tax was already deducted. Include the gross interest, then credit the tax.
• Expecting the rebate to take tax below ৳5,000. Above your limit, the minimum tax is the floor.
• Forgetting an investment and planning to add it later. A revised return cannot reduce the tax shown in your original return.