Seven types of income that may require tax return

Bangladesh’s income tax system classifies taxpayers’ earnings into seven major heads. Having income under any of these categories does not automatically mean income tax is payable, but such income may need to be reported in a tax return if the taxpayer falls under the mandatory filing rules.

The seven heads of income are income from employment, rent, agriculture, business, capital gains, financial assets, and other sources, according to the National Board of Revenue (NBR).

1. Income from employment

Salary, allowances, bonuses and other earnings received from employment fall under this category.

2. Income from rent

Income earned by renting out a house, apartment, shop or other property is included under this head.

3. Income from agriculture

Earnings from farming, crop production and other agriculture-related activities are reported under this category.

4. Income from business

Income generated from business, professional activities or commercial operations falls under this head.

5. Capital gains

Profits earned from the disposal of assets or investments may be treated as capital gains, depending on the nature of the transaction.

6. Income from financial assets

This category includes interest or profit from bank deposits, dividends, savings certificates and securities, among other financial assets.

7. Income from other sources

Royalties, licence fees, honorariums, various fees and other specified forms of income fall under this category.

However, earning income under one of these seven heads does not by itself mean that a person must pay income tax. Tax liability and the obligation to file a return are separate matters. Under the Income Tax Act, 2023, filing may be mandatory when a taxpayer’s total income exceeds the applicable tax-free threshold or when other statutory conditions apply.

For the 2026-27 and 2027-28 tax years, the tax-free income threshold for a general taxpayer is Tk 375,000. The threshold is Tk 425,000 for female taxpayers and those aged 65 or above, Tk 500,000 for taxpayers with disabilities and third-gender taxpayers, and Tk 525,000 for gazette-listed war-wounded freedom fighters and injured 'July Warriors.' The threshold is increased by Tk 50,000 for each child or dependent with a disability for a parent or legal guardian, subject to the applicable rules.

The NBR has also launched e-Return services for individual taxpayers for the 2026-27 tax year.

It is important to distinguish tax return filing from tax payment: a person may be required to submit a return even when no tax is ultimately payable, depending on the applicable legal conditions.