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Sep 11, 2011

Income Tax at a glance in Bangladesh

Among direct taxes, income tax is one of the main sources of revenue for Bangladesh government. It is a progressive tax system. Income tax is imposed on the basis of ability to pay. 'The more a taxpayer earns the more he should pay' - is the basic principle of charging income tax in Bangladesh and aims at ensuring equity and social justice.

National Board of Revenue (NBR) organizes tax fair from 17-22 September 2011 in all divisional headquarters to provide one-stop service for submission of return and getting TIN certificate and payment of tax. NBR also celebrate National Income Tax Day-2011 on 15 September 2011.

Income tax authorities in Bangladesh are National Board of Revenue, Director-General of Inspection (Tax), Commissioner of Taxes, Director General (Training), Director General of Central Intelligence Cell (CIC) and additional employees of taxes.

For the purpose of computation of total income and charging tax thereon, sources of income is classified into 7 categories of the population. These are salaries, interest on securities, income from house property, income from agriculture, income from business or profession, capital gains and income from other sources.

For individuals other than female, senior taxpayers of 65 years above related taxpayers, tax payable for the

Level of IncomeTax rate
up to taka 1,80000%
Taka 1,80,001 - 4,80,00010%
Taka 4,80,001 - 8,80,00015%
Taka 8,80,001 - 11,80,00020%
Above 11,80,000 taka25%

For female taxpayers and senior taxpayers of age 65 years and above tax payable for the income up to Taka 2,00,000 and retarded taxpayers be tax payable for the income up to Taka 2,50,000. Minimum tax for any individual assessee is Taka 2,000. Non-resident individual pay tax at 25%, other than non-resident Bangladeshi.

For the companies tax imposed at as following:
Company TypesTax rate
Publicly traded company 27.5% (condition applies)
Non-publicly traded company37.5%
Bank, Insurance and Financial Company42.5%
Cigarette production company 42.5%
Mobile Phone Operator Company 45%

To impose a reduced rate of 5 per cent tax on the income from fisheries, poultries etc. irrespective of individual and company taxpayers. Small farmers, having no other source of income, need not have to pay tax on such income not exceeding taka 1,80,000.

To ensure environment-friendly industrialisation, to resolve problems relating to energy, electricity and population explosion, tax holiday incentive is proposed up to June, 2013. These 17 types of companies are:

  1. Active pharmaceuticals ingredient industry and radio pharmaceuticals industry 
  2. Barrier contraceptive and rubber latex 
  3. Basic chemicals or dyes and chemicals 
  4. Basic ingredients of electronic industry 
  5. Bio-fertilizer 
  6. Biotechnology 
  7. Boilers 
  8. Compressors 
  9. Computer hardware 
  10. Energy efficient appliances 
  11. Insecticide or pesticide 
  12. Petro-chemicals 
  13. Pharmaceuticals 
  14. Processing of locally produced fruits and vegetables 
  15. Radio-active (diffusion) application industry 
  16. Textile machinery 
  17. Tissue grafting.
Prominent sectors of the Infrastructure eligible for tax holiday are mentioned below:
  1. Rapid transit 
  2. Toll road 
  3. Elevated expressway
  4. Deep sea port
  5. IT parks
  6. Hi-tech park
  7. Renewable energy (energy savings bulb, solar energy panel, windmill)
  8. ICT village or software technology zone.
The return shall be accompanied by a statement of deduction or collection of tax along with copy of treasury challans or payment orders. Tax shall be deposited to respective account code according to the following:
Name of the ZoneIncome tax-CompaniesIncome tax-other than Company
Taxes Zone-1, Dhaka 1-1141-0001-0101 1-1141-0001-0111
Taxes Zone-2, Dhaka1-1141-0005-01011-1141-0005-0111
Taxes Zone-3, Dhaka1-1141-0010-01011-1141-0010-0111
Taxes Zone-4, Dhaka1-1141-0015-01011-1141-0015-0111
Taxes Zone-5, Dhaka1-1141-0020-01011-1141-0020-0111
Taxes Zone-6, Dhaka1-1141-0025-01011-1141-0025-0111
Taxes Zone-7, Dhaka1-1141-0030-01011-1141-0030-0111
Taxes Zone-8, Dhaka1-1141-0035-01011-1141-0035-0111
Taxes Zone-1, Chittagong1-1141-0040-01011-1141-0040-0111
Taxes Zone-2, Chittagong1-1141-0045-01011-1141-0045-0111
Taxes Zone-3, Chittagong1-1141-0050-01011-1141-0050-0111
Taxes Zone-Khulna1-1141-0055-01011-1141-0055-0111
Taxes Zone-Rajshahi1-1141-0060-01011-1141-0060-0111
Taxes Zone-Rangpur1-1141-0065-01011-1141-0065-0111
Taxes Zone-Sylhet1-1141-0070-01011-1141-0070-0111
Taxes Zone-Barisal1-1141-0075-01011-1141-0075-0111
Large Taxpayer Unit1-1145-0010-01011-1145-0010-0111
Central Survey Zone1-1145-0005-01011-1145-0005-0111

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