As a citizen, you are liable to provide income tax to the government ( if eligible). But often, people get confused regarding taxation and end up with questions like—
- Am I eligible to pay income tax?
- I earn less, so why should I pay tax?
- How can I calculate my income tax in Bangladesh?
- Or can I pay taxes online?
Well, if it sounds like you, you are in the right place.
The good news is Bangladesh govt has made the taxation system easier, and you can even file e-returns BD. But how do you calculate the tax amount?
Let’s know in the below section in detail.
What is the least taxable income limit for an individual person?
Currently, the general minimum taxable income threshold is BDT 300,000. However, there are exceptions where this restriction fluctuates.
The tax rate on total taxable income for non-residents other than Bangladeshis is 30% (flat rate).
The tax liability of resident and non-resident Bangladeshi is computed on an average rate shown in the below table.
| Type of the individuals | Total taxable income |
| Male | 3,00,000 |
| Women, Third Gender, or older people aged 65 years or more | 3,50,000 |
| Disable people | 4,50,000 |
| Gazetted wound freedom fighter | 4,75,000 |
Apart from that, there are some exceptions where the range may vary.
Suppose a taxpayer is a father or legal guardian of disabled children. In that case, the minimum income level for each disabled child will be BDT 50,0000, greater than their usual minimum taxable income threshold.
However, only one parent will be eligible for this payment if both parents of disabled children are taxpayers.
These are the basic taxable income limit. If this limit surpasses a person’s income, they need to pay tax to the NBR ( National Beuro of Revenue) Bangladesh.
Tax Breakdown:
Who will be considered a Bangladeshi resident?
According to section 2(55) of the Income Tax Ordinance of 1984, a person will be considered as a resident if s/he:
- Lived in Bangladesh for 182 days or more in a year
- 90 days or more after living in Bangladesh for 365 days in the last four years
Here, the resident must pay taxes per the taxation rules and regulations.
Do I have to pay tax for foreign earnings?
In Bangladesh, every revenue from all sources of income, regardless of location, must be declared by residents (whether local or foreign nationals).
As a Bangladeshi resident you have to a pay a tax based on the progressive rates which ranges from 10 – 30%.
On the other hand, non-residents have to pay a flat rate tax of 30%.
How to pay tax on profit and capital gains?
Are capital gains and investment income taxed in your region?
Yes, the capital gains tax for non-resident shareholders in Bangladesh is 10%.
The tax rate on capital gains from selling capital assets is 15%. Capital gains tax on the sale of shares of a listed firm in the hands of a non-resident is excluded from tax if the non-resident has a comparable tax-exempt status in their home region. However, any income in other countries/territories is exempt in Bangladesh.
What will be the least tax amount after considering the full refund?
The government encourages taxpayers to invest or contribute in specific areas in exchange for a tax break on the amount invested or donated. The rewards of investment and giving are twofold.
The first is future capital gain from his current investment, and the other is societal benefit from his giving.
The second is a tax rebate for the taxpayer, which decreases the tax liability. So, if a taxpayer has an investment allowance, s/he must first compute the tax rebate on that grant and then deduct the tax rebate from his overall tax due. After that, the amount that comes out is the gross tax liability.
Final Words
So this is how taxation for a single person works in Bangladesh. Hopefully, now you have understood how to calculate your income tax. Still, if you are confused about it, we suggest you consult a taxation expert who can help you file taxes and others.
