Bangladesh’s poultry and hatchery sector is one of the most important pillars of the country’s food security and rural economy. Millions of families depend on it, either as farmers, workers, or consumers. The government recognises this. And the Income Tax Act 2023, updated further by the Finance Ordinance 2025, reflects that recognition through a meaningful tax exemption for qualifying businesses in this sector.
If you run a poultry farm, a fish or shrimp hatchery, or a related agro-business, this post is written specifically for you. I will explain what the exemption covers, what conditions you must meet, what happens when your income crosses the threshold, and the most common mistakes I see farmers and agro-entrepreneurs make when filing their returns.
What Is the Tax Exemption for Poultry and Hatchery Income?
Under Section 76 of the Income Tax Act 2023, read together with Part 1 of the Sixth Schedule (Exempted Income), income earned from the following activities is exempt from income tax up to BDT 5,00,000 per year:
- Poultry farming, including broiler and layer operations
- Fish and shrimp hatcheries
- Related agro-business activities that fall within the exempted categories under the schedule
This means if your total annual income from these qualifying activities does not exceed BDT 5,00,000, you pay zero income tax on it.
This is a significant benefit. For context, a general individual taxpayer only gets a tax-free threshold of BDT 3,75,000 under the Finance Act 2025. The agricultural exemption gives qualifying farmers and hatchery operators a higher effective threshold, and it is designed specifically to support this sector.
Why Does This Exemption Exist?
Tax exemptions do not exist without a reason. This one reflects a deliberate policy choice by the government.
The poultry and hatchery sector operates on thin margins. Input costs, including feed, medicine, energy, and logistics, have all risen sharply in recent years. Small and medium operators do not have the buffer that large corporates do. An income tax burden on top of already tight margins would push many of them into loss or force them out of the formal economy entirely.
Beyond the economics, this sector directly supports national nutrition and food security. Poultry is one of the most affordable sources of protein for low and middle-income households across Bangladesh. Government policy actively encourages investment in this space.
The tax exemption is one tool used to make that investment more attractive and to keep existing operators financially viable.
What Are the Conditions to Claim This Exemption?
Here is where many farm operators get into trouble. The exemption is not automatic just because you are in the poultry or hatchery business. There are specific conditions attached to it, and failing to meet them means you lose the benefit entirely.
Maintain Proper Books of Accounts
This is the single most important condition, and the one most commonly ignored by small operators.
The NBR requires that you keep proper, organised records of your income and expenditure. That means a cashbook or accounting register showing what came in and what went out, invoices for purchases, receipts for sales, and records of stock and inventory where applicable.
Without these records, you cannot substantiate your claim during a scrutiny or audit. The NBR is not obligated to accept an unverified claim. If you cannot show your income falls within the exempted category with proper documentation, the exemption can be rejected and your income taxed at standard rates.
File Your Return Correctly and on Time
The exemption must be claimed through a properly filed income tax return. Exempt income is not hidden income. You still need to declare your agricultural income in your return. You simply mark it as exempt under the applicable provision.
Many people in this sector make a critical error here. They assume that because their income is exempt, they do not need to file a return at all. That is wrong. Failing to file when you have a TIN and financial activity is a separate violation from the exemption issue. The two obligations are independent of each other.
If you have been unclear about what a proper return must include, this breakdown of what the Income Tax Act 2023 requires from every taxpayer is worth reading before your next filing.
The Income Must Genuinely Fall Within the Exempted Category
The exemption covers specific agricultural activities defined under the law. Not everything connected to agriculture qualifies. If your income comes partly from poultry farming and partly from a feed supply business or equipment sales, only the poultry farming portion qualifies for the exemption. The rest is taxed normally.
Mixing these income streams without proper separation in your books is a common source of problems during audits.
What Happens When Income Exceeds BDT 5,00,000?
This is one of the most practically important parts of the exemption, and one that most guides do not explain clearly.
The exemption is not all-or-nothing. Crossing the BDT 5,00,000 threshold does not mean your entire income suddenly becomes taxable at standard rates. Only the income above the threshold is taxed, and it is taxed at reduced rates specifically set for this sector.
The applicable reduced rates under the current law are:
| Income Slab | Tax Rate |
| Up to BDT 5,00,000 | 0% (fully exempt) |
| Next slab above BDT 5,00,000 | 5% |
| Higher slabs | 10% |
These rates are significantly lower than what a standard individual or corporate taxpayer pays on equivalent income. Even when your farm or hatchery income crosses the exempt limit, the tax burden remains very manageable compared to other sectors.
A Practical Example to Make This Clear
Let us say your income from a broiler poultry farm in FY 2025-26 is BDT 9,00,000.
- First BDT 5,00,000: fully exempt, zero tax
- Remaining BDT 4,00,000: taxed at the applicable reduced rate of 5%
- Tax payable: BDT 20,000
Now compare this to a general business taxpayer earning BDT 9,00,000. After the standard BDT 3,75,000 threshold, BDT 5,25,000 is taxable, and the progressive slabs kick in at higher rates. The poultry farmer’s tax position is materially better.
This is exactly why it is worth claiming the exemption correctly rather than ignoring it or filing inaccurately.
Common Mistakes I See in This Sector
After working with clients across different agricultural businesses, the same mistakes come up repeatedly. Here is what to watch out for.
Not Keeping Any Books of Accounts
The most common mistake by far. Many small farm operators run everything informally. Cash in, cash out, nothing written down. When it comes time to file a return or respond to an NBR query, there is no documentation to support anything.
Without books, you cannot claim the exemption. You also cannot defend yourself if the NBR estimates your income higher than it actually was.
Starting a basic cashbook costs nothing. It takes ten minutes a day. It is the single most valuable thing a small agro-entrepreneur can do for their tax position.
Declaring Exempt Income as Zero
Some taxpayers think that because their income is exempt, they should write zero in the return. This is incorrect and potentially dangerous.
Exempt income must be declared. You declare the amount and indicate that it is exempt under the applicable provision. Entering zero when you have real income is exactly the kind of inaccuracy the NBR is now scrutinising more carefully. If you are unsure why zero returns are a legal risk in Bangladesh, this post explains the issue in full.
Mixing Agricultural and Non-Agricultural Income Without Separation
If you run a poultry farm and also sell feed or equipment, you need two separate income records. Only the qualifying agricultural income goes into the exempt category. Blending everything into one figure and then claiming the full amount as exempt is incorrect and will not survive an audit.
Assuming the Exemption Covers All Agricultural Activities
The exemption is specific. Not all farming income qualifies. Rice cultivation, vegetable farming, and certain other agricultural activities have different treatment under the law. The poultry and hatchery exemption applies to the specific categories defined in Part 1 of the Sixth Schedule of the Income Tax Act 2023. If you are in a related but different type of farming, confirm your eligibility before claiming.
Ignoring the Upcoming Budget Changes
Tax provisions can and do change with each Finance Act or Ordinance. There are active proposals for the FY 2026-27 budget that may affect income thresholds and sectoral exemptions. The proposal to raise the general tax-free limit to BDT 5,00,000, which I covered in detail here, is one example of how the landscape can shift. Staying informed is part of staying compliant.
How to Properly Claim the Exemption: A Practical Checklist
If you want to claim this exemption correctly and protect yourself in case of any future scrutiny, here is what you need to have in place:
Maintain a daily cashbook or use basic accounting software. Record every sale, every purchase, every expense. Keep it updated weekly at minimum.
Separate your income streams clearly. If you have agricultural and non-agricultural income, keep separate records for each from day one.
Keep all purchase and sale receipts for at least 5 years. The NBR can audit returns up to several years back. Your documentation needs to match.
Declare your exempt income correctly in your return. Show the full amount, indicate the exemption provision, and ensure the rest of your return is accurate and complete.
File on time, every year. Even in years when you owe zero tax, file the return. Late filing creates unnecessary complications and can attract penalties.
Consult a professional before your first filing or if you are unsure. The conditions around agricultural exemptions have specific legal requirements. Getting it right the first time is far less costly than correcting mistakes under pressure.
If you need guidance on how business income is assessed and how to structure your filings for an agricultural business, the business tax services page explains how I work with small and medium enterprises in Bangladesh.
Will This Exemption Change in the FY 2026-27 Budget?
As of now, the BDT 5,00,000 agricultural exemption remains in force under the Finance Ordinance 2025.
Whether it will change in the upcoming budget is not confirmed. Bangladesh’s tax law is updated annually through the Finance Act or Ordinance process. The National Board of Revenue and the Ministry of Finance periodically review sectoral exemptions as part of broader fiscal policy.
What I can say is that agricultural exemptions have historically been maintained and in some years expanded, because they serve a clear economic and social purpose. But relying on any provision that has not yet been confirmed for the new fiscal year is always a risk.
Once the Finance Bill 2026 is presented and passed, I will update my guidance accordingly. If you want to be notified when that happens, feel free to get in touch and I will make sure you have the latest information.
Final Word
The BDT 5,00,000 tax exemption for poultry farming and hatchery income is one of the most genuinely useful provisions in Bangladesh’s current tax framework. It exists to support a vital sector, and eligible taxpayers should absolutely take advantage of it.
But the exemption must be claimed correctly. Proper books, accurate returns, and correct income classification are not optional extras. They are the conditions that make the exemption legally valid.
If you want help understanding whether your farming or hatchery income qualifies, how to set up your records, or how to file your return properly for the first time or for prior years that need correction, I am here to help.