Bangladesh

Personal deductions

Deductions on basis of specified allowable investments

A tax rebate on investments is applicable for a resident and non-resident Bangladeshi, which is the lower of the following:

• 3% of taxable income, excluding exempt income, income taxable at reduced rates, and income subject to minimum tax,
• 15% of permitted investments and expenditure, or
• BDT 1 million.

Charitable contributions

• Donation to a charitable hospital established outside the city corporation area within one year prior to such donation and approved by the National Board of Revenue (Board) is deductible.
• Donation to an organisation established for the welfare of persons with disabilities is deductible if such organisation has been established one year prior to the payment and approved by the Department of Social Welfare and by the Board.
• Amount paid to Zakat as Zakat Fund or as donation to any charitable fund established by or under the Zakat Fund Management Act, 2023 is deductible.

Education expenses

Amount paid as a grant to any public welfare or educational institution approved by the government is deductible.

Healthcare expenses

Amount paid to a welfare fund for the benefit of wife, child, or other dependant, or paid in respect of any premium under a joint insurance scheme if such fund or scheme is approved by the Board, is deductible.

Life insurance premiums

Amount paid for managing life insurance or contractual deferred annuity paid in Bangladesh for self, spouse, or minor children is deductible. In case of insurance, the amount deductible will be a maximum of 10% of the sum assured (including bonus or other benefits).

Contribution to provident fund, superannuation fund, etc.

Taxpayer’s and employer’s contribution to a recognised provident fund is deductible. Annual contribution to approved superannuation fund is also deductible.

Standard deductions

One-third of ‘income from employment’ or BDT 450,000, whichever is lower, is exempt from tax.

Business deductions

Expenses that are revenue in nature are, by and large, allowed as a deduction to businesses and professionals if they are:

• incurred wholly and exclusively for the purpose of the business or profession
• not in the nature of a personal expense, and
• not in the nature of a capital expense.

Losses

Losses can be carried forward and set off against income from subsequent year(s) for periods and in the manner mentioned below:

• Speculation business loss can be set off or carried forward for set off only against speculation business income.
• Set off of capital loss can be made only with capital gains.
• Loss from any exempted source cannot be set off or carried forward for set off against any income.
• The carry forward and set off of loss is denied if minimum tax, on the basis of WHT, is applicable.
• Loss of business in tobacco business can only be set off from income of tobacco business.
• Business loss and capital loss may be carried forward for six successive tax years.
• Unabsorbed depreciation may be carried forward perpetually.