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NBR 2025-26 · AY 2026-27 · Investment Rebate
Bangladesh Income Tax Calculator 2025-26
Estimate your Bangladesh personal income tax for income year 2025-26 / assessment year 2026-27 using updated NBR slabs, taxpayer categories, investment rebate, minimum tax, and AIT.
Last reviewed: May 2026. This calculator is for general planning only and is not tax advice.
How to Use
- 1Select mode: 'Calculate Tax by Income' or 'Calculate Income by Tax'.
- 2Select your income source: 'Salaried Employee' or 'Business / Self-Employed'.
- 3Choose your taxpayer category to apply the correct tax-free limit.
- 4For forward mode, enter your basic salary/profit, allowances/other income, investments, and AIT.
- 5For reverse mode, enter your target annual tax liability.
- 6Review the step-by-step slab breakdown, exemptions, rebates, and totals.
Example Calculations for BD Income Tax
Salaried Mode (Salary of ৳9,00,000):
With ৳3,75,000 tax-free limit, the taxable BDT 5,25,000 spans the 10% and 15% slabs, resulting in ৳63,750 slab tax. Allowance exemptions reduce taxable income first, followed by investment rebates.
Business Mode (Profit of ৳9,00,000):
With ৳3,75,000 tax-free limit, Net Profit is taxed directly without salaried allowance exemptions. Taxable income of ৳9,00,000 spans 10% and 15% slabs, yielding ৳63,750 gross tax (before investment rebates).
Reverse Mode (Target Tax ৳1,50,000):
For a general taxpayer, ৳1.5 Lakh tax translates back to a taxable income of ৳62,75,000 by working backwards through 30%, 25%, 20%, 15%, and 10% tax bands.
How Bangladesh Income Tax Calculation Works
Salaried Mode: Deducts house, medical, and transport exemptions from gross salary/allowances to compute taxable income, then applies progressive NBR slabs.
Business / Self-Employed Mode: Calculates tax directly on Net Business Profit and other income (no salaried exemptions apply). Interest paid on business loans is pre-deducted from profits.
Reverse Mode: Runs NBR slabs backwards. It identifies the highest slab corresponding to the target tax, calculates the taxable income within each slab using rates (30% down to 10%), and adds the tax-free limit.
Formula & Calculation Method
Salaried Employee Formula:
Gross Salary = Basic + HRA + Medical + Transport + Other allowances
Exempt HRA = min(actual HRA, 50% of basic, BDT 25,000/month)
Exempt Medical = min(actual medical, 10% of basic, BDT 10,000/month)
Exempt Transport = min(actual transport, BDT 30,000/year)
Taxable Income = Gross Salary − Total Exemptions
Business / Self-Employed Formula:
Net Business Profit = Revenue − (Business Expenses + Business Loan Interest)
Taxable Income = Net Business Profit + Other Income
Common Tax Calculation (All Taxpayers):
Slab Tax = Progressive tax on (Taxable Income − Tax-free limit)
Rebate = min(3% × Taxable Income, 10% × Investment, BDT 7,50,000)
Tax Liability = max(Slab Tax − Rebate, BDT 5,000 minimum tax)
Net Payable = max(0, Tax Liability − AIT)
| Income Slab (above tax-free limit) | Tax Rate | Max Tax in Slab |
|---|---|---|
| Up to tax-free limit | 0% | Nil |
| Next BDT 3,00,000 | 10% | BDT 30,000 |
| Next BDT 4,00,000 | 15% | BDT 60,000 |
| Next BDT 5,00,000 | 20% | BDT 1,00,000 |
| Next BDT 20,00,000 | 25% | BDT 5,00,000 |
| Remaining income | 30% | No limit |
| Taxpayer Category | Tax-Free Limit (AY 2026-27) |
|---|---|
| General taxpayer | BDT 3,75,000 |
| Woman / Senior citizen (65+) | BDT 4,25,000 |
| Physically challenged / Third gender | BDT 5,00,000 |
| Gazetted freedom fighter | BDT 5,25,000 |
Bangladesh Income Tax References & Data Sources
- National Board of Revenue (NBR), Bangladesh — Income Tax Ordinance 1984 as amended by Finance Act 2025 (income year 2025-26 slabs and exemptions).
- NBR SRO on allowance exemptions — house rent (50% of basic, max BDT 25,000/month), medical (10% of basic, max BDT 10,000/month), transport (max BDT 30,000/year).
- Finance Act 2025, Schedule — investment rebate rates and eligible instruments including Sanchayapatra, DPS, life insurance, and approved provident funds.
- NBR Tax-Free limit circular AY 2026-27 — taxpayer category thresholds and minimum tax of BDT 5,000.
Tax rules change annually with the national budget. Always verify current figures with NBR (nbr.gov.bd) or a chartered accountant before filing. Last reviewed: May 2026.
Tax Planning Tips for Bangladesh
- 1Keep salary certificates, allowance breakdowns, investment receipts, and AIT documents together before the November filing deadline.
- 2Invest in approved instruments (Sanchayapatra / Shanchoy Patro, Government Sukuk bonds / Shukuk, DPS / FD, life insurance) before 30 June to maximise your rebate for the current year.
- 3Verify your taxpayer category — women, seniors (65+), and physically challenged individuals are entitled to higher tax-free limits.
- 4Check your payslip to confirm how much AIT your employer deducts monthly — enter this accurately to avoid overpaying.
- 5If you have income from multiple sources (salary, rental, business), declare all of it — NBR's systems increasingly cross-check with bank and property data.
- 6File your return by 30 November 2026 — late filing attracts a penalty of 2% per month on the unpaid tax amount.
Frequently Asked Questions
What are the Bangladesh income tax slabs for income year 2025-26?
For income year 2025-26 (AY 2026-27), the general tax-free limit is BDT 3,75,000. Above that: next BDT 3,00,000 at 10%; next BDT 4,00,000 at 15%; next BDT 5,00,000 at 20%; next BDT 20,00,000 at 25%; remaining income at 30%. These are progressive slabs — only the income within each band is taxed at that rate.
What are the tax-free limits for different taxpayer categories?
NBR sets different tax-free thresholds by category: General taxpayers BDT 3,75,000; Women and senior citizens aged 65+ BDT 4,25,000; Physically challenged and third-gender individuals BDT 5,00,000; Gazetted freedom fighters BDT 5,25,000. Income below these thresholds is completely tax-free.
How is the investment tax rebate calculated for 2025-26?
The rebate is calculated using NBR's standard three-way minimum rule. The rebate is the lowest of: (1) 3% of your total taxable income, (2) 10% of your actual eligible investment, or (3) an absolute maximum cap of BDT 7,50,000. Eligible investments include approved savings certificates (Sanchayapatra / Shanchoy Patro), Government Sukuk bonds (Shukuk), Deposit Pension Schemes (DPS / FD - capped at BDT 1,20,000 per year), life insurance premiums, and stock market investments.
What is the minimum tax and when does it apply?
A minimum tax of BDT 5,000 applies when your taxable income exceeds your applicable tax-free limit but your computed tax (after rebate) is less than BDT 5,000. In that case, you pay the higher of the two — ensuring a minimum contribution. The minimum tax does not apply if your income is below the tax-free threshold.
How do house rent, medical, and transport allowances reduce taxable income?
NBR allows specific exemptions: House Rent Allowance — exempt up to 50% of basic salary or BDT 25,000/month, whichever is lower. Medical Allowance — exempt up to 10% of basic or BDT 10,000/month, whichever is lower. Transport Allowance — exempt up to BDT 30,000 per year. Amounts above these limits become part of taxable income.
What is Advance Income Tax (AIT) and how does it reduce my bill?
AIT is income tax already deducted by your employer from monthly salary, or deducted at source on bank interest, investment returns, or other income. When filing your return, AIT is subtracted from your total tax liability. If AIT exceeds your liability, you can claim a refund from NBR.
What is a Reverse Tax Calculator (Tax-to-Income) and how does it work?
A Reverse Tax Calculator determines the required taxable income based on a target tax liability. By working backward through the NBR's progressive slabs (30%, 25%, 20%, 15%, and 10%), it computes the required income in each slab to match the target tax, and adds the appropriate tax-free limit threshold.
How is income tax calculated for sole proprietors, freelancers, and businesses in Bangladesh?
For self-employed individuals, freelancers, and sole proprietorship businesses, the taxable income is calculated as Net Business Profit (Gross Revenue minus allowable business expenses) plus other income. Standard salary allowances (house rent, medical, transport exemptions) do not apply. However, they are entitled to the same taxpayer category tax-free thresholds (e.g., BDT 3,75,000 for general) and progressive slabs (10% to 30%).
How are business loans treated for income tax in Bangladesh?
Interest paid on business loans is a fully deductible business expense under Section 47 of the Income Tax Act, which reduces your taxable Net Business Profit. However, repayments of the loan principal are capital transactions and are not tax-deductible. Business owners should deduct loan interest from profits before entering net income into the calculator.
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