Private SalaryLast Updated: September 2026•Read Time: 7 min read•Verified by NBR SRO & Tax Act 2023

Private Sector Employee Salary Tax: The 1/3rd Tax Exemption Rule Explained

Private corporate employees enjoy an automatic tax exemption of 1/3rd of total gross salary or ৳4,50,000 (whichever is lower) under the 6th Schedule Part 1 Clause 27. Detailed guide on perk valuation and deductions.

Key Takeaways & Core Points

Exemption is lower of 1/3rd of total received salary or ৳4,50,000.
All allowances (house rent, medical, conveyance, bonus) are aggregated into total salary first.
Employer-provided company car adds statutory perquisites based on engine CC.
Free employer housing adds statutory deemed rental value to salary.

Unlike the public sector, private sector employees under the Income Tax Act 2023 are governed by the unified 1/3rd exemption rule under Part 1, Clause 27 of the Sixth Schedule.

1. The 1/3rd Exemption Formula

Under the modern tax code, all salary elements (Basic, Bonus, House Rent, Medical, Conveyance, Overtime) are first summed together. From this gross total, the lower of 1/3rd of total salary or ৳4,50,000 is subtracted as an automatic exemption.

2. Motor Car Facility Valuation

If the employer provides a car for personal and official use, statutory deemed perquisites are added to salary:

•Up to 1500 cc: ৳15,000 per month (৳1,80,000 per year)
•1501 to 2000 cc: ৳20,000 per month (৳2,40,000 per year)
•2001 to 2500 cc: ৳30,000 per month (৳3,60,000 per year)
•Above 2500 cc: ৳50,000 per month (৳6,00,000 per year)

Frequently Asked Questions (FAQ)

Q: Are medical allowances separately exempt for private employees?

A: No, under the modern Income Tax Act 2023, individual allowance ceilings have been consolidated into the unified 1/3rd or ৳4.5L exemption.

Conclusion & Tax Tips

Private corporate employees must account for all allowances and company perks to compute accurate net taxable salary.

Official Statutory References & Sources

Reviewed by Talukdar Academy Research Cell

All data, tax brackets, thresholds, and statutory interpretations in this article are compiled directly from the Bangladesh Income Tax Act 2023, Finance Ordinance 2026, and official NBR circulars.

NBR Official Portal

Official e-Return Portal

Income Tax Act 2023 Gazette