Tax on share investment in Bangladesh: dividends, capital gains and the investment rebate (FY2026-27)
Every June, investors in the Dhaka Stock Exchange ask the same questions. How much tax was cut from my dividends? Do I owe tax on my trading profits? Can my share purchases reduce my tax bill? This guide explains the main rules for individual investors in plain English. It is based on the Finance Act 2026, which Parliament passed on 29 June 2026 for fiscal year 2026-27, and the Income Tax Act 2023.
Tax rules in Bangladesh change with every budget. Treat this as a starting point, and check the current Finance Act or ask a tax adviser before you file.
A quick word on fiscal years
Bangladesh’s income year runs from 1 July to 30 June. Income you earn in one income year is assessed in the following “assessment year”. For example, income earned from July 2025 to June 2026 is reported in the return for assessment year 2026-27. When you read about a new rule, always check which income year it applies to.
For context, the Finance Act 2026 sets the general tax-free income threshold for individuals at Tk 4 lakh for assessment year 2026-27. The threshold is higher for women and for taxpayers aged 65 and over.
At a glance
| Item | Rule for resident individuals | Source year |
|---|---|---|
| Cash dividends | 15% tax deducted at source. For FY2026-27 this is reported to be a final tax for individuals | Finance Act 2026 |
| Capital gains on listed shares | Exempt up to Tk 50 lakh. Gains above that limit are taxed at 15% | As reviewed July 2026 |
| Sponsor, director and placement shares | No Tk 50 lakh exemption. Gains are taxed at 15% | As reviewed July 2026 |
| Interest on securities (e.g. treasury bonds) | 10% tax deducted at source, adjustable against your final tax | From 1 July 2025 |
| Investment tax rebate | Lowest of 3% of eligible taxable income, 10% of eligible investment, or Tk 7.5 lakh | Finance Act 2026 |
1. Tax on cash dividends
When a listed company pays a cash dividend, it deducts tax before the money reaches your bank account. For resident individuals the withholding rate is 15%, and the same 15% rate applies to dividends from mutual fund units.
Under the FY2026-27 budget, dividend tax for individual investors became a flat 15% and is treated as a final tax. Before this change, tax was deducted at 10-15%, and investors in higher income slabs could owe extra tax at assessment. If the final-tax treatment applies to you, the 15% already deducted settles your tax on that dividend. You still report the dividend in your return.
With or without a TIN
Bangladesh’s tax law generally increases withholding by 50% when the payee cannot show proof of return submission (PSR). The sources we checked do not clearly say how this rule applies to dividends. To be safe, keep your e-TIN and PSR updated in your BO account and with your broker so companies can deduct tax at the correct rate.
Is a small amount of dividend tax-free?
In earlier years, the law exempted dividend income up to a fixed limit. We could not confirm from a 2025-2026 source that such an exemption still applies for FY2026-27, especially now that dividend tax is final for individuals. Check the current Finance Act or ask your tax adviser before you claim any exemption.
2. Tax on capital gains from listed shares
A capital gain is the profit you make when you sell shares for more than you paid. According to PwC’s Bangladesh tax summary (last reviewed 31 July 2026), gains on listed shares or units are exempt if they do not exceed Tk 50 lakh. When gains exceed that limit, listed shares are taxed at 15%.
For most retail investors, yearly gains stay well below Tk 50 lakh, so no capital gains tax is due. Large and active traders should keep careful records. Ask your adviser exactly how the limit is calculated, because how gains and losses are netted can change the result.
Sponsors, directors and placement holders
Sponsor, director and placement shareholders do not get the Tk 50 lakh exemption. Their gains on transfers of listed securities are taxed at 15%, and that tax is deducted at source when they sell.
3. Interest from treasury bonds
Government treasury bonds now trade on the exchange, and many investors hold them for steady income. From 1 July 2025, tax deducted at source on interest from securities (other than sanchaypatra) rose from 5% to 10%.
The Finance Act 2026 says key withholding taxes are no longer treated as final tax. In practice, this means you should include the gross interest in your total income, work out tax at your slab rate, and claim the 10% already deducted as a credit. Keep the deduction certificate.
4. The investment tax rebate
The Income Tax Act 2023 lets individuals reduce their tax by investing in approved categories. The rebate is taken off your tax payable, not off your income. Eligible categories include new investments in listed securities, mutual funds and ETFs, government securities, life insurance premiums, provident fund contributions and DPS, subject to the limits for each category.
Under the Finance Act 2026, the rebate is the lowest of these three amounts:
- 3% of your taxable income, excluding exempt income, income taxed at reduced rates and final-tax income
- 10% of your eligible investment
- Tk 7.5 lakh
This is lower than the previous rule of 15% of investment with a Tk 10 lakh cap. The FY2026-27 budget also removed the earlier Tk 5 lakh ceiling on rebate-eligible mutual fund investment.
A simple example: your taxable income is Tk 12 lakh and you buy Tk 2 lakh of new listed shares during the year. 3% of income is Tk 36,000 and 10% of the investment is Tk 20,000, so your rebate is Tk 20,000.
Two cautions. First, check whether the new 10% / Tk 7.5 lakh rule or the older 15% / Tk 10 lakh rule applies to the income year in your return. Second, cashing out certain eligible investments early can trigger additional tax.
5. Reporting shares in your wealth statement (IT-10B)
Individuals filing a return generally also file a statement of assets and liabilities (form IT-10B). Your shares, mutual fund units and bonds are assets, so list them there. Most people report them at cost, the amount actually paid, rather than at market value. Report any cash left in your BO account as well.
Your wealth statement must reconcile from one year to the next. Any rise in your net wealth should be explained by income, gains and other sources shown in your return. A year-end portfolio statement from your broker makes this much easier.
6. Stock dividends (bonus shares)
A bonus share gives you more shares but no cash. Because no cash is paid, no tax is deducted on receipt. Your total cost stays the same and is spread over more shares, which lowers your cost per share. This matters when you later sell and work out your gain.
The Finance Act 2026 changes affecting stock dividends apply to the issuing companies, not to individual shareholders. Confirm the treatment for your own return with your adviser.
Your June checklist
The income year closes on 30 June. Before then, and before you file:
- Collect dividend warrants or certificates showing gross dividend and tax deducted for every company you held.
- Download your year-end portfolio statement and realised capital gain statement from your broker.
- Collect tax deduction (TDS) certificates for treasury bond interest and other income.
- Keep proof of new investments you plan to claim for the rebate, such as purchase confirmations and mutual fund certificates.
- Check that your e-TIN, bank details and address in your BO account are up to date.
- Reconcile your share holdings with last year’s IT-10B.
- Book an appointment with your tax adviser early, before the filing rush.
Mika Securities Ltd has been a DSE member since 2005 (TREC No. 215) and is a CDBL depository participant with 26 offices nationwide. Our clients can request portfolio and capital gain statements from any branch or through the Amar Biniyog app. New to investing? You can open a BO account online.
Frequently asked questions
Do I have to pay extra tax on dividends if I am in a high tax slab?
Under the FY2026-27 budget, the 15% dividend tax for individuals is reported to be final, so no extra tax should be due on those dividends. You must still show them in your return. Check the current Finance Act for the income year you are filing.
I made a small profit trading shares this year. Do I owe tax?
Under the current rules, individual investors’ gains on listed shares are exempt up to Tk 50 lakh. If you are not a sponsor or director and your gains are below that limit, no capital gains tax should be due. Still keep your capital gain statement.
Can I claim the rebate on shares I bought years ago?
Generally, no. The rebate is for new investments made during the income year. Shares bought in earlier years have already been counted in those years.
Do I need to show bonus shares in my wealth statement?
Yes. List your full number of shares, including bonus shares. Because bonus shares cost nothing, the total cost of that holding does not change, only the number of shares.
Every investor’s situation is different. Income from salary, business, property or abroad can change how these rules apply to you, so consult a qualified tax professional for your own case.
This article is for general education only and is not tax or investment advice. Tax rules change with each Finance Act; consult a qualified tax adviser for your situation. Figures cited are from public sources as of October 2026.