Key Changes in the Finance Ordinance 2025

The Finance Bill 2025, approved by the Advisory Committee on June 30, 2025, introduces several key amendments to the nation’s tax laws. These reforms are designed to increase revenue, expand the tax net, and support sustainable economic growth. A summary of the major changes is provided below:

Total Income (BDT)	Tax Rate (2025)
First 350,000	Nill
Next 100,000	5 %
Next 400,000	10 %
Next 500,000	15 %
Next 500,000	20 %
Next 2,000,000	25 %
On rest of the Income	30 %

Note:

The basic exemption limit for General Tax Payers is BDT 350,000
The basic exemption limit for women and senior citizens aged 65 years or above is BDT 400,000.
The basic exemption limit for taxpayers with disabilities is BDT 475,000.
The basic exemption limit for war wounded gazette freedom fighters is BDT 500,000.
The basic exemption limit for third-gender taxpayers is BDT 475,000.
The basic exemption limit for the parents or legal guardian of a person with disability increases by an additional BDT 50,000.

NRB’s who are not Bangladeshi citizens

NRB who are not Bangladeshi citizens are taxable at the maximum rate (i.e. 30%).

Surcharge on total income tax

A surcharge is payable on the tax by the taxpayer if one’s net worth exceeds the prescribed threshold. The rates of surcharge are as follows:

Net wealth	Rate
Up to BDT 40 million	Nil
Above BDT 40 million to BDT 100 million.	10%
Above BDT 100 million to BDT 200 million	20%
Above BDT 200 million to BDT 500 million	30%
Above BDT 500 million	35%

Minimum tax to be applied in case total income exceeds tax-free threshold

Minium Tax Payable by Individuals

Area of Residence	Minimum Tax
Dhaka North and South City Corporation and Chittagong City Corporation	5,000
Any Other city corporation	4,000
Other area not being a city corporation	3,000

Rates of Environmental Surcharge

Description of Motor Vehicle	Rate of Environmental Surcharge for each Vehicele (BDT)
Up to 1500 cc	25,000
More than 1500 cc but Up to 2000 cc	50,000
More than 2000 cc but Up to 2500 cc	75,000
More than 2500 cc but Up to 3000 cc	150,000
More than 3000 cc but Up to 3500 cc	200,000
More than 3500 cc	350,000

This surcharge will apply to natural individual assessees owning more than one motor vehicles. Environmental surcharge is applicable in addition to the tax for motor vehicles under section 153 payable at the time of registration/fitness renewal of motor vehicles, and cannot be refunded nor be adjusted with any other tax liability.
Here, motor vehicle excludes bus, minibus, coaster, prime mover, truck, lorry, tank lorry, pick-up van, human hauler, autorickshaw and motor cycle.

WITHHOLDING TAX RETURNS

(a) Government ministries, divisions, and directorates are no longer required to submit withholding tax returns.

(b) Withholding tax returns must now be submitted quarterly instead of monthly, according to the following schedule:

Submission Deadline	Applicable Period
25 October	July, August, September
25 January	October, November, December
25 April	January, February, March
25 July	April, May, June

Corporate Income Tax Rates (AY 2025–2026)

Company Type	Standard Rate	Reduced Rate (upon compliance)
Publicly traded companies issuing shares worth more than 10% of paid-up capital via IPO	22.5%	20%
Publicly traded company that issues shares worth 10% or less than 10% of its paid-up capital through Initial Public Offering (IPO)	25%	22.5%
One Person Company (OPC)	22.5%	20%
Other companies as defined u/s 2(31) of the ITA, 2023	27.5%	25%
Publicly traded bank, insurance and finance companies	37.5%	Condition N/A
Non-publicly traded bank, insurance and finance companies	40%	Condition N/A
Merchant bank	37.5%	Condition N/A
Company and other than company producing all sorts of tobacco items including cigarette, bidi, chewing tobacco and gul	45%+2.5% (Surcharge)	Condition N/A
Publicly traded mobile operator company (10% share of paid-up capital transferred through stock exchange of which minimum 5% must be through pre-initial public offering)	40%	Condition N/A
Non-publicly traded mobile operator company	45%	Condition N/A
Trust and Association of persons	27.5%	25%
Fund	27.5%	25%
Firm	Slab rates	Slab rates
Cooperative Society, registered under Cooperative Society Act, 2001	20%	Condition N/A
Private university, private medical college, private dental college, private engineering college or private college solely dedicated to imparting education on ICT	15%	Condition N/A
Capital gain for company, fund and trust	15%	Condition N/A
Dividend	20%	Condition N/A

Condition-1: All income and receipts must be made through bank transfer Any single transaction exceeding BDT 500,000 and annual transactions exceeding BDT 3,600,000 in expenses and investments, must be made through bank transfer.
Condition 2: If all income is received through bank transfers during the income year.

Key Changes in the Finance Ordinance 2025 of Bangladesh