The Finance Ordinance 2025, passed on 3 June 2025, rewrote several rules that define how individual taxpayers are taxed for Assessment Year 2026-27 (Income Year 2025-26). Some changes leave you better off; others nudge your liability up slightly.
This guide summarizes what changed, who it affects, and what it means for your take-home pay.
These changes apply to both AY 2026-27 and AY 2027-28.
The headline changes
1. Tax-free threshold raised
The basic exemption increased from ৳3,50,000 to ৳3,75,000 for general taxpayers. Every category's threshold moved up:
Effect: everyone near the bottom of the tax net pays slightly less — or nothing at all.
2. The 5% entry slab was removed
The previous first taxable bracket (৳1,00,000 at 5%) is gone. The first taxable slab now starts at 10%.
Effect: mixed. For people just above the threshold, the removal of the gentle 5% step means a slightly steeper entry into taxation. For most middle earners, the higher exemption offsets it.
3. A new 30% top bracket
Above ৳35,75,000 of income, the rate is now 30% (previously the top rate was 25%).
Effect: affects only high earners.
4. A flat nationwide minimum tax
The old location-based tiers (৳3,000 / ৳4,000 / ৳5,000 by city-corporation area) are replaced by a flat ৳5,000 minimum tax for everyone whose income exceeds their threshold. First-time filers pay ৳1,000.
Effect: simplification. Taxpayers in lower-tier areas now pay the same floor as everyone else.
The new slab schedule at a glance
See the full tax slabs page for thresholds by category and worked examples.
What it means for you
If you earn under ৳3,75,000
You pay no tax (and no minimum tax, since you're below the threshold). The raised exemption pulled more people out of the tax net entirely.
If you're a middle earner (৳6L – ৳15L)
The higher exemption helps; the removed 5% slab slightly offsets it. In most cases the net effect is a small reduction or roughly flat liability versus the prior year. The investment rebate remains your biggest lever — use it.
If you're a high earner (above ৳35.75L)
The new 30% bracket raises your marginal rate on income above that line. Tax planning — maximizing the rebate, using allowance exemptions, and timing investments — matters more than ever.
First-time filers
The ৳1,000 minimum tax is a meaningful discount if your liability would otherwise sit near the floor.
What didn't change
- The investment rebate formula (15% of investment, capped at 3% of income or ৳10 lakh).
- The 30 November individual filing deadline.
- The allowance exemptions (HRA, medical up to ৳1,20,000).
- The surcharge structure for net wealth above ৳4 crore.
Don't use last year's rules
The single most common mistake this year is calculating with the old structure — the ৳3,50,000 threshold or the 5% slab. Both are wrong for AY 2026-27. Using them understates your tax and risks an underpayment penalty.
Our income tax calculator is already updated with the AY 2026-27 schedule. Use it to get figures you can trust.
Frequently asked questions
Are these slabs final? They reflect the Finance Ordinance 2025 and remain valid for AY 2026-27 and AY 2027-28. Always confirm the latest at etaxnbr.gov.bd.
Did the rebate change? No. The rebate formula is unchanged; only the slabs, thresholds, and minimum tax changed.
Is the minimum tax still based on where I live? No. It's now a flat ৳5,000 nationwide (৳1,000 for first-time filers).
For official information, always verify at nbr.gov.bd or etaxnbr.gov.bd. This guide is informational and does not constitute professional tax advice.
Put this into practice
Run your own numbers through the free income tax calculator.