Income tax calculator Bhutan 2026

Under the Income Tax Act of Bhutan 2025, in force since January 1, 2026, an individual pays nothing on taxable income up to Nu. 300,000. Above that the rate climbs from 5% to 30%, and only the slice inside each band pays that band's rate.

The same table covers salary, rent, interest and the profit of a sole proprietor or a partner. Companies pay a flat rate instead.

How it's calculated

Up to Nu. 300,000: nil.
From there to Nu. 500,000: 5%. To Nu. 750,000: 10%. To Nu. 1,200,000: 15%.
To Nu. 2,000,000: 20%. To Nu. 3,500,000: 25%. Anything above: 30%.
Enter income after deductions. An employee first takes off the deduction in section 44 of the Act, which our take-home pay calculator does for you.

An example

Pema has a taxable income of Nu. 800,000. The first Nu. 300,000 is free. The next Nu. 200,000 pays 5 %, which is Nu. 10,000. The next Nu. 250,000 pays 10 %, which is Nu. 25,000. The last Nu. 50,000 pays 15 %, which is Nu. 7,500. The tax for the year is Nu. 42,500, an average of 5.31 % of the income.

Frequently asked questions

How much income is tax free in Bhutan?

Taxable income up to Nu. 300,000 a year pays no tax (Income Tax Act of Bhutan 2025, Schedule 1, paragraph 1).

What changed from the old table?

The Department of Revenue and Customs notified the new rates on 16 December 2025, for Income Year 2026 onwards. The band above Nu. 300,000 now starts at 5%, and the top rate of 30% now applies above Nu. 3,500,000.

Do I have to file a return?

Section 293 frees a resident individual from filing if the person owns no business and total income does not pass Nu. 300,000. Above that, section 290 applies and a return is due, even when your employer withheld tax every month.

Are provident fund savings taxed?

Sums standing in your account at the National Pension and Provident Fund, or an approved fund, are exempt (Schedule 3, paragraph 13). So are cash crop earnings of a resident individual (paragraph 14).

Key terms

Taxable income: Income from employment, business, investments and other sources, after the deductions the Act allows.
Income Year: The calendar year on which the tax is worked out.
DRC: The Department of Revenue and Customs, under the Ministry of Finance.