Tax residence in Bangladesh for Indian taxpayers

Bangladesh decides residence only by days in its income year (1 July – 30 June): 183 days, or 90 days plus 365 days in the four preceding years. India uses similar tests over 1 April – 31 March, so frequent travel or a move can make you resident in both. Art. 4(2) of the India–Bangladesh Convention then decides, and Art. 25 relieves double tax by credit.

Check your status: India and Bangladesh

Free, no sign-up, about 3 minutes. Conclusion under Indian income-tax law, compared with the law of Bangladesh and the tax treaty.

When Bangladesh treats you as a tax resident

Residence in Bangladesh depends only on days, counted over the Bangladesh income year (1 July – 30 June): at least 183 days, or at least 90 days plus 365 days in total in the 4 preceding years. Citizenship, home or family do not enter the test. The old Income Tax Ordinance, 1984 used 182 days; the Income Tax Act, 2023 uses 183.

With 90 to 182 days in Bangladesh in this income year, the total of the 4 preceding income years decides: 365 days or more make you resident.

As a non-resident, citizenship does not change your status, but it changes the rate: a non-resident Bangladeshi pays at the normal slab rates, other non-resident individuals at 30%.

You were in Bangladesh for at least 183 days in the income year — under s. 2(45)(a)(1) of the Income Tax Act, 2023 you are resident. Bangladesh taxes all your income arising or received in and outside Bangladesh, including income from India (s. 26).
You were in Bangladesh for at least 90 days in the income year and for at least 365 days in total in the 4 preceding years — under s. 2(45)(a)(2) of the Income Tax Act, 2023 you are resident. Bangladesh taxes all your income arising or received in and outside Bangladesh, including income from India (s. 26).

When you are a nonresident

You meet neither day test, so you are a non-resident Bangladeshi. Bangladesh taxes only income arising or received in Bangladesh, at the normal slab rates (ss. 2(4) and 26). Pay for work done in India is not taxable in Bangladesh — unless it is paid by the Government of Bangladesh or a local authority to you as a Bangladeshi citizen in its service (s. 27(a)).
You meet neither day test, so you are non-resident in Bangladesh. Bangladesh taxes only income arising or received in Bangladesh; as you are not a Bangladeshi, the rate is generally 30% (ss. 2(4) and 26).

Where the rules of Bangladesh clash with Indian tax rules

Collision: similar day tests, different years — resident in both countries. Both countries use day tests of the same shape — India 182 days, or 60 days plus 365 days in the four preceding years; Bangladesh 183 days, or 90 days plus 365 days in the four preceding years — but over years that start three months apart. Frequent travel between the two countries, or a move in the middle of a year, can make you resident in both for overlapping periods. Art. 4(2) of the India–Bangladesh Convention then decides: permanent home; with a home in both countries, the centre of vital interests; if that cannot be determined, or you have a permanent home in neither, habitual abode; then nationality; then mutual agreement (Art. 27).

What else to know

Different tax years: 1 April in India, 1 July in Bangladesh. Bangladesh's income year runs from 1 July to 30 June; India's tax year from 1 April to 31 March. Each country counts days over its own year — Bangladesh's 183-day and 90-day tests count days in Bangladesh in its income year, India's 182-day and 60-day tests days in India in the Indian tax year. The 183-day limit for salary in Art. 16(2)(a) of the India–Bangladesh Convention counts days «during the previous year or income year concerned» — and the exemption is also lost for any stay that forms part of a continuous period of more than 183 days, even across two years. Days are counted for Indian tax in the previous year, for Bangladesh tax in the income year.
How India relieves double taxation of Bangladeshi income. If India is your state of residence, you report Bangladeshi income in your Indian return and claim credit for the Bangladesh tax: under Art. 25(1) of the India–Bangladesh Convention the credit may not exceed that proportion of Indian tax which the income from sources within Bangladesh bears to your entire income subject to Indian tax. Claim it with Form No. 44 (rule 76 of the Income-tax Rules, 2026). If Bangladesh is your state of residence, Bangladesh credits Indian tax up to the proportion of Bangladesh tax attributable to that income (Art. 25(3)); Bangladesh requires the claim within two years after the year concerned.
Working in Bangladesh while resident in India: the 183-day rule (Art. 16(2)). Pay for work done in Bangladesh is Bangladesh-source (s. 27(a)). If India is your treaty residence, Bangladesh does not tax it only if all three conditions of Art. 16(2) are met: you are in Bangladesh for not more than 183 days in aggregate during the Bangladesh income year; the employer is not resident in Bangladesh; and the pay is not deducted from the profits of a permanent establishment in Bangladesh. Otherwise Bangladesh taxes it — at 30% if you are not a Bangladeshi — and India gives credit under Art. 25(1).
Non-resident foreigner: 30% on Bangladesh income, lower treaty rates need an NBR certificate. As a non-resident who is not a Bangladeshi, you pay 30% on Bangladesh-source income, usually by withholding at source (s. 119). Where the India–Bangladesh Convention gives a lower rate — for example on dividends, interest or royalties — ask the National Board of Revenue for a certificate of reduced or nil deduction before the payment; it decides within 30 days of a complete application. Without a permanent establishment in Bangladesh, the tax withheld is final and you need not file a return.
Bangladeshi citizen resident in Bangladesh: Indian earnings remitted home are exempt. If you are a Bangladeshi citizen and resident in Bangladesh, income you earn by working physically abroad — for example in India — and bring into Bangladesh through banking channels in accordance with the foreign remittance law is not included in your total income (Sixth Schedule, Part 1, para 17); show it in the return as exempt income. Pay for remote work done from Bangladesh is not covered. India still taxes pay for work done in India.
Year of arrival or departure: no split year in either country. Both countries decide residence for a whole year — Bangladesh for the income year (1 July – 30 June), India for its tax year (1 April – 31 March); neither splits the year. If you leave Bangladesh after 183 days in the income year, you remain resident there for that year; before you leave permanently, the tax officer may require a return of income up to departure (s. 193). The Convention's tie-breaker applies to periods in which both countries treat you as resident.

How dual residence is resolved

If both countries treat you as a resident, Art. 4(2) of the treaty applies: Convention between the Government of the Republic of India and the Government of the People's Republic of Bangladesh for the avoidance of double taxation and the prevention of fiscal evasion with respect to taxes on income (signed at New Delhi on 27 August 1991; amended by the Protocol signed at Dhaka on 16 February 2013). The tests are applied in order — permanent home, centre of vital interests, habitual abode, nationality, and finally mutual agreement between the tax authorities.

Terms you will come across in Bangladesh

income year: the Bangladesh tax year, 1 July – 30 June
resident (nibāsī): 183 days in the income year, or 90 days plus 365 days in the 4 preceding years
non-resident Bangladeshi: a Bangladeshi citizen who is non-resident — taxed on Bangladesh income at slab rates
tax-free threshold: Tk 4,00,000 for income year 2026-27 (Tk 4,50,000 for women and persons aged 65+)
NBR: National Board of Revenue — issues certificates for reduced treaty withholding
statement of assets and liabilities: filed with the return by resident Bangladeshi individuals

Questions

I spent 100 days in Bangladesh this income year — can I be resident?

Yes, if you spent 365 days or more in Bangladesh in total in the four preceding income years. If India also treats you as resident, Art. 4(2) of the India–Bangladesh Convention decides.

What rate does an Indian non-resident pay in Bangladesh?

Non-resident individuals who are not Bangladeshis pay 30% on Bangladesh-source income, usually withheld at source; a lower treaty rate needs an NBR certificate.

How does India avoid double taxation of Bangladeshi income?

If India is your state of residence, it credits the Bangladesh tax up to the proportion of Indian tax attributable to the Bangladeshi income (Art. 25(1)); you claim it with Form No. 44.

Sources

Legislation and official guidance

Income Tax Act, 2023 (Act No. 12 of 2023), s. 2(45)(a) — authentic English text published by NBR (S.R.O. No. 404-Law/2025) — A natural person is resident in an income year if he or she (1) was in Bangladesh for a period or periods amounting in all to at least 183 days in that year, or (2) was in Bangladesh for 90 days or more in that year and for 365 days or more in all in the 4 preceding years. The definition contains no condition of citizenship or home.
NBR Income Tax Circular 2023-2024 (12.10.2023), paras 1.1–1.2 — The slab rates for natural persons apply to all individuals except non-residents other than non-resident Bangladeshis; non-resident individuals other than non-resident Bangladeshis (not companies or associations) are taxed at 30%.
Income Tax Act, 2023, s. 26 — The total income of a resident includes all income from any source arising or received in or outside Bangladesh; the total income of a non-resident includes only income arising or deemed to arise in Bangladesh and income received in Bangladesh.
Income Tax Act, 2023, s. 2(4) — «Non-resident» means a person who is not a resident.
Income Tax Act, 2023, s. 27(a) — Income from employment, wherever paid, is deemed to arise in Bangladesh if it is earned in Bangladesh, or if it is paid by the Government of Bangladesh or a local authority in Bangladesh to a Bangladeshi citizen in its service.
Finance Act, 2026 — income tax rates (PwC Bangladesh, «Finance Act 2026: key amendments», June 2026) — Income year 2026-27: general tax-free threshold Tk 4,00,000 (women and persons aged 65 or more Tk 4,50,000; persons with disabilities and third gender Tk 5,25,000); then 10% on the next Tk 3,00,000, 15% on the next Tk 4,00,000, 20% on the next Tk 5,00,000, 25% on the next Tk 20,00,000 and 30% on the balance. Non-resident natural persons other than non-resident Bangladeshis: 30%.
Income-tax Act, 2025, s. 6(1)–(2) — Residential status is determined for each tax year. An individual is resident in India in a tax year if in India for 182 days or more in that year, or for 60 days or more in that year and 365 days or more in the four years preceding it.
Art. 16(2) India–Bangladesh Convention — Remuneration of a resident of one State for employment exercised in the other State is taxable only in the first State if (a) the recipient is present in the other State for a period or periods not exceeding in the aggregate 183 days during the «previous year» or «income year» concerned, (b) the remuneration is paid by, or on behalf of, an employer who is not a resident of that other State, and (c) the remuneration is not deducted from the profits of a permanent establishment in that other State. The terms «previous year» and «income year» are not defined in Art. 3 (Art. 3(2): domestic meaning).
Art. 4(2) India–Bangladesh Convention (1991) — Individual resident of both States: (a) deemed resident of the Contracting State in which he has a permanent home available to him; if he has a permanent home available to him in both Contracting States, of the State with which his personal and economic relations are the closest (centre of vital interests); (b) if the centre of vital interests cannot be determined, or if he has not a permanent home available to him in either Contracting State, of the State in which he has an habitual abode; (c) if he has an habitual abode in both Contracting States or in neither of them, of the State of which he is a national; (d) if he is a national of both Contracting States or of neither of them, the competent authorities settle the question by mutual agreement.
Art. 27 India–Bangladesh Convention (mutual agreement procedure) — A resident may present a case to the competent authority of the State of which he is a resident; the case must be presented within three years from the date of the assessment or of the withholding of tax at the source, whichever is later.
Art. 25 India–Bangladesh Convention — India (Art. 25(1)): Bangladesh tax is allowed as a credit against Indian tax; the credit shall not exceed that proportion of Indian tax which the income from sources within Bangladesh bears to the entire income subject to Indian tax. Bangladesh (Art. 25(3)): Indian tax is allowed as a credit, but in an amount not exceeding that proportion of Bangladesh tax which such income bears to the entire income chargeable to Bangladesh tax. Art. 25(2) and (4) treat certain exempted or reduced tax as paid, within limits.
Income-tax Act, 2025, s. 159 — The Central Government may enter into agreements for relief from double taxation and avoidance of double taxation; where an agreement applies, the Act applies only to the extent more beneficial to the assessee (s. 159(4)). A non-resident may claim treaty relief only with a certificate of residence from the other country's government and the prescribed documents and information (s. 159(8)).
Income-tax Rules, 2026, rule 76; Forms No. 44 and 45 — A resident gets credit for foreign tax in the tax year in which the income is taxed in India; credit is the lower of the Indian tax on that income and the foreign tax, per source and per country; not against interest, fees or penalties; disputed foreign tax only after settlement (Form No. 45, within 6 months of the month of settlement). Form No. 44 with a certificate of income and tax and proof of payment, within 12 months from the end of the tax year if the return was filed on time; accountant verification if foreign tax is ₹1,00,000 or more. Conversion at the TT buying rate.
PwC Worldwide Tax Summaries — Bangladesh, Corporate: Tax credits and incentives (reviewed 31.07.2026) — Foreign tax relief is available to residents only and is limited to the Bangladesh tax at the average rate on the doubly taxed income; the Deputy Commissioner of Taxes may apply the lower of the Bangladesh and the foreign average rate to such income; the claim must be made within two years after the year concerned; a treaty rate needs an NBR certificate.
Income Tax Act, 2023, s. 119 — A person paying a taxable amount to a non-resident deducts tax at the prescribed rate, not exceeding 30%; the Board may issue a certificate for no deduction or a lower rate because of a treaty or otherwise (decision within 30 days of a complete application); for a non-resident without a permanent establishment in Bangladesh the tax deducted is the final tax liability.
Income Tax Act, 2023, s. 166 — A return is mandatory if income exceeds the tax-free threshold, if the person was assessed in any of the 3 preceding years, and in other cases (sub-s. 1); it is not mandatory for a non-resident natural person without a permanent establishment in Bangladesh (sub-s. 2).
NBR — list of double taxation avoidance agreements (published 27.04.2026) — Agreements with 43 countries, including Canada, China, the Czech Republic, France, Germany, India, Italy, Japan, the Netherlands, Pakistan, Poland, Switzerland, the United Kingdom and the United States; Ukraine, Austria, Spain and Hungary are not on the list.
Income Tax Act, 2023, Sixth Schedule, Part 1, para 17 — Prothom Alo, 27.09.2023 — Income earned abroad by a Bangladeshi natural person taxpayer and brought into Bangladesh in accordance with the law on foreign remittances is not included in total income; it is shown in the return as tax-exempt income.
The Daily Star — foreign remittance, freelancing and remote work income (analysis) — For the exemption under para 17 of the Sixth Schedule the work must be done physically abroad and the income brought in through banking channels; pay for remote work done from Bangladesh for a foreign employer is taxable as employment income.
Income Tax Act, 2023, s. 193 — report in The Daily Star — The assessment of a person leaving Bangladesh can be made before the end of the income year; by notice giving at least 7 days, the Deputy Commissioner of Taxes may require a return and information on income up to the probable date of departure.
Income Tax Act, 2023, s. 86 — The payer of salary deducts tax at source at the average rate applicable to the estimated annual total income of the recipient.
Income Tax Act, 2023, s. 170(1) (substituted by s. 97 of the Finance Act, 2026 [Act No. 96 of 2026], effective 1 July 2026) — Return of a natural person: filed 1 July – 30 September — rebate of 5% of tax payable or Tk 25,000, whichever is lower; 1 October – 31 December — no rebate or additional tax; 1 January – 31 March — additional tax of 2% or Tk 3,000, whichever is higher; 1 April – 30 June — 5% or Tk 5,000, whichever is higher. A person abroad on higher-study leave, deputation or lien, or for earning with a valid visa and permit, files within 90 days from the day of return to Bangladesh.
Income Tax Act, 2023, ss. 167 and 169(4) — A resident Bangladeshi natural person files a statement of assets and liabilities with the return; a non-resident Bangladeshi shows only assets located in Bangladesh (s. 167(3)); a non-resident Bangladeshi may file the return through the nearest Bangladesh mission (s. 169(4)).
Art. 4(2)(a) India–Bangladesh Convention (1991) — Deemed resident of the Contracting State in which he has a permanent home available to him; if he has a permanent home available to him in both Contracting States, of the State with which his personal and economic relations are the closest (centre of vital interests).
Art. 4(2)(b) India–Bangladesh Convention (1991) — If the centre of vital interests cannot be determined, or if he has not a permanent home available to him in either Contracting State, the individual is deemed a resident of the State in which he has an habitual abode.
Art. 4(2)(c)–(d) India–Bangladesh Convention (1991) — Habitual abode in both Contracting States or in neither of them — resident of the State of which he is a national; national of both Contracting States or of neither of them — the competent authorities settle the question by mutual agreement.

Updated 04/11/2026. The result is for information only and is not tax or legal advice. Tax authorities and courts may interpret the rules differently, including because of circumstances not covered here, and the law changes. Consult a qualified adviser before making decisions.

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