How to calculate income tax in Bangladesh (2025-26)

Calculating personal income tax in Bangladesh for income year 2025-26 takes six steps. Below is each step, followed by a full worked example. You can also let the calculator do it for you in seconds.

Step 1 — Add up your annual income

Total your basic salary, allowances (house rent, medical, conveyance), festival and yearly bonuses, and your employer's provident-fund contribution for the whole year.

Step 2 — Subtract the standard exemption

Salaried taxpayers deduct one-third (1/3) of employment income or ৳5,00,000 — whichever is lower. What remains is your taxable income.

Step 3 — Apply your tax-free threshold

The tax-free limit is ৳3,75,000 (general), ৳4,25,000 (women / seniors 65+), ৳5,00,000 (third gender or persons with disability) and ৳5,25,000 (gazetted freedom / July fighters). Income up to this limit is taxed at 0%.

Step 4 — Apply the slab rates

Above the tax-free limit, tax rises by slab: the next ৳3,00,000 at 10%, the next ৳4,00,000 at 15%, the next ৳5,00,000 at 20%, the next ৳20,00,000 at 25%, and anything above at 30%.

Step 5 — Subtract the investment rebate

Rebate-eligible investments (DPS, Sanchaypatra, life insurance, mutual funds, provident fund, approved donations) earn a rebate equal to the lowest of 3% of taxable income, 15% of total eligible investment, or ৳10,00,000. Read the rebate guide →

Step 6 — Check the minimum tax

If your taxable income crosses the tax-free limit, you pay at least ৳5,000 (৳1,000 for first-time taxpayers) even if the rebate would otherwise reduce your tax to zero.

Worked example — ৳80,000/month

On a ৳80,000/month salary, annual income is ৳9,60,000. After the standard exemption (৳3,20,000), taxable income is ৳6,40,000. Applying the slabs gives ৳26,500 tax before rebate. With no investment, that is your tax; invest about ৳1,28,000 and the rebate (৳19,200) brings it down to roughly ৳7,300. See the full ৳80,000 breakdown →