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Even as government employees begin drawing their newly revised pay packages alongside this month's salary, the enhanced compensation will not factor into their current income tax filings, as the National Board of Revenue (NBR) confirmed that the ongoing 2026–27 assessment year strictly covers earnings accrued during the preceding financial year (July 1, 2025, to June 30, 2026).
Out of an estimated 1.5 million public servants across Bangladesh, submitting an annual income tax return remains mandatory for officers holding Grade 10 and above. Failure to submit filings within the designated timeline risks administrative disruptions to salary and allowance disbursement, though filing remains voluntary for lower-tier staff. Under updated NBR provisions, taxpayers now enjoy the flexibility of submitting returns year-round.
According to statutory tax codes and guidelines formulated by the revenue authority, the bulk of government compensation packages remains shielded from income tax. Only three explicit earning categories attract taxation, while 42 categories of allowances and benefits are granted full tax exemption.
Under Statutory Regulatory Order (SRO) No. 225 issued on July 13, 2023, taxable government remuneration is limited strictly to Basic Pay, festival allowances, and bonuses. Applicable slab rates apply solely to the combined aggregate of these three specific components.
Conversely, the NBR’s income tax manual for the 2026–27 tax year explicitly exempts 42 categories of allowances and auxiliary perks, subject to designation and post assignments. Prominent tax-free heads include house rent allowance, medical allowance, Bengali New Year (Boishakhi) allowance, education assistance allowance, recreation allowance, travel and conveyance allowance, tiffin allowance, uniform and washing allowance, entertainment allowance, hill tract allowance, deputation allowance, charge allowance, judicial allowance, risk allowance, and specialized security emoluments such as ration money, border allowances, and cleaner, driver, armorer, and traffic allowances.
