Calculate Income Tax for Bangladesh 2023–2024 (2024)

Important: The new Income Tax for Bangladesh 2024–2025 can be calculated from here : taxhishab.com . please visit this page.

At the end of this article, you’ll find a link to a simple spreadsheet. You can click the link, make a copy of the spreadsheet, enter your income details, and it will help you calculate your tax easily.

Income tax is a fundamental source of revenue for the government in Bangladesh. Understanding how to calculate your income tax liability is essential to ensure you meet your financial obligations as a responsible citizen. This article provides a comprehensive guide to help you calculate your income tax for the fiscal year 2023–24 in Bangladesh.

If you’re working for a company or in any job in Bangladesh, you need to have an E-TIN certificate to get paid. And if you have this certificate, you must follow the new government rule, which says you have to file a tax return. This applies even if you didn’t earn enough to owe any taxes — it’s called a zero return.

You can request your salary statement from your HR or finance department in your organization for the current fiscal year. This statement will provide a detailed breakdown of your earnings, much like the example below (please note that the numbers used are for illustration purposes)

• Basic Salary: This is your regular monthly pay, like your base income.
• House Rent Allowance: If you receive this, it’s an amount for your housing expenses.
• Conveyance Allowance: This is for your commuting costs.
• Medical Allowance: This covers your medical expenses.
• Bonuses: These might include performance bonuses, yearly bonuses, or festival bonuses.
• Leave Encashment: If you received money in exchange for unused leave days.
• Over Time Allowance: Any extra payment for overtime work.
• Transportation Allowance: For additional travel costs.

Advance Income Tax (AIT): If taxes have been deducted at the source.

This breakdown in your salary statement helps you understand how your earnings are divided into different components. If you have any questions or need further clarification, you can always reach out to your HR or finance department for assistance.

This table shows all the parts of a person’s salary, like their basic pay, extra allowances, and bonuses. The total gross pay is how much they earn before any money is taken out for taxes. The net pay is what’s left after they’ve paid their Advance Income Tax (AIT). In this example, the person takes home 13,82,000 after 18,000 is deducted for AIT from their initial earnings of 1,400,000.

Total Earning: You earned a total income of 1,400,000.

1/3 of Total Earning: This is one-third of your total earnings, which equals 466,667.

Maximum Tax-Free Income: According to tax rules, the maximum income that is not subject to tax is 450,000.

Tax-Free Income: Tax-free income is calculated as the lesser of one-third of your total earnings (466,667) and the maximum tax-free income (450,000). In this case, it’s 450,000, as it’s the lower amount.

Taxable Income: Your taxable income is found by subtracting your tax-free income (450,000) from your total earnings (1,400,000). So, your taxable income is 950,000.

Total Investment: You have a total of 800,000 in investments. These investments may have tax implications and could potentially reduce your taxable income or provide tax benefits depending on the tax laws in your area.

In summary, your total income was 1,400,000, but 450,000 of it is not subject to taxation. Therefore, your taxable income is 950,000.

Income TaxSlabs

**For men. I have added a section in my spreadsheet for women slab as well

Think of these as different buckets that categorize your income. Each bucket has a specific tax rate.

1st Slab: If your income is 350,000 or less, you don’t pay any tax; it’s tax-free. But if you earn more, you’ll only be taxed on the amount over 350,000. In this example, any income up to 350,000 is tax-free, and the rest, up to 600,000, isn’t taxed.

2nd Slab: For incomes between 350,001 and 500,000, you pay a 5% tax rate, but only on the amount above 350,000. For instance, if you make 450,000, you pay 5% tax on the 100,000 over 350,000, which equals 5,000.

3rd Slab: Incomes between 500,001 and 800,000 are taxed at a 10% rate on the amount exceeding 500,000. For example, if you fall into this range, you pay 10% on the portion above 500,000. In this example, the tax on income between 500,001 and 800,000 is 30,000.

4th Slab: For incomes from 800,001 to 1,200,000, you pay 15% tax, but only on the money over 800,000. In this example, the tax is 15% on the income exceeding 800,000, resulting in 30,000.

5th Slab: If your income is between 1,200,001 and 1,700,000, you pay a 20% tax, but just on the amount over 1,200,000. In this example, no tax is calculated for this category.

Rest Amount: If your income goes beyond 1,700,000, it would be taxed at a 25% rate. However, in this example, no tax is calculated for this portion.

Total Tax: To find your total tax, you add up the taxes from each slab. In your example, the total tax is 65,000.

Rebate Calculation

• 3% of Taxable Income: This means you get back 3% of your taxable income, which is 28,500 in this case.
• Investments’ 15%: If you’ve invested money, you get a rebate of 15% of your total investment, which is 120,000 here.
• 10,00,000 BDT: This amount is part of the calculation.

Lowest: You choose the smallest rebate value, which is 28,500 in this example.

Advance Income Tax: You’ve already paid 18,000 in Advance Income Tax.

Total Rebate: To find the total rebate, add the lowest rebate (28,500) to the Advance Income Tax (18,000). This equals a total rebate of 46,500.

Net Tax: To find your final tax amount, subtract the total rebate (46,500) from the initial tax (65,000). So, 65,000–46,500 equals a net tax of 18,000.

Conclusion

If you come across any issues or have questions while using the spreadsheet, don’t hesitate to reach out for help or consult with a tax expert. Everyone’s tax situation is unique, and understanding your specific tax laws is essential for accurate and responsible tax filing.

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