GP Rate For Income Tax
The GP Rate for Income Tax (Gross Profit Rate) serves as a critical benchmark used by the National Board of Revenue (NBR) in Bangladesh to evaluate the reasonableness of a business's declared earnings. In essence, it is the ratio of gross profit to net sales, acting as a "sanity check" for tax officials.
When financial records are incomplete or profits appear suspiciously lean, the NBR applies industry-specific GP rates—ranging from 10% for wholesalers to 40%+ for service sectors—to estimate taxable income. It’s the taxman’s way of ensuring that while your heart may be in the business, your numbers remain in reality.
In the continent of Asia, when it becomes necessary to estimate the amount of sales for income tax assessment, the Dandikar (Dendiker) formula is often followed to settle tax cases.
What is the Dendiker’s Formula (Sales Estimation Formula)?
The Dendiker’s Formula (sometimes called Dandikar formula or sales estimation formula) is a simple method used to estimate the expected sales volume of a business.
It helps businessmen and startups predict:
How much they might sell,
How many customers they may get,
How much revenue they can expect.
Dandikar formula-GP Rate for Income Tax:
GP Rate Income Tax
| Sl. No. | Item | GP Rate | Sl. No. | Items | GP Rate |
| 1 | Cycle Parts | 20% | 51 | Salt with other Goods (wholesale) | 6% |
| 2 | Tyre Parts | 10% | 52 | Sugar (not for ration shop) | 3%–4% |
| 3 | Stationary (Retail) | 15% | 53 | Tea (Retail) | 10%–15% |
| 4 | Cycle Sale (Retail) | 15% | 54 | Gur (Retail) | 10% |
| 5 | Rice (Whole Sale) | 4% | 55 | Contract work (Construction) | 15% |
| 6 | Hardware (Retail) | 15% | 56 | Labour & Earth work | 12% |
| 7 | Hardware (Wholesale) | 10% | 57 | Medicines (Patent) | 15% |
| 8 | Readymade Garments | 15% | 58 | Prescription Value (Receipt) | 50% |
| 9 | Cloth (Wholesale) | 4%–5% | 59 | Import of Medicines | 20% |
| 10 | Cloth (Retail) | 10% | 60 | Tobacco (Mathihari) | 10% |
| 11 | Radio, TV Repairing | 40% | 61 | Bidi Tobacco | 10% |
| 12 | Radio Spare Parts | 25% | 62 | Mustard Oil (Wholesale) | 5% |
| 13 | Radio, TV & Gramophone Sale | 15% | 63 | Mustard Oil (Retail) | 10% |
| 14 | Photography | 60% | 64 | Mustard Mfg. | 20% |
| 15 | Hotel & Restaurant | 40% | 65 | Seeds (wholesale) | 5% |
| 16 | Boarding (on Receipt) | 40% | 66 | Seeds (retail) | 15% |
| 17 | Hotel & Boarding | 30%–35% | 67 | Pesticides কীটনাশক (wholesale) | 10% |
| 18 | Shoes (Retail) | 20% | 68 | Pesticides কীটনাশক (retail) | 15% |
| 19 | Optical Sale & Repairing | 40% | 69 | Gold Sale (Jewellery) | 5% |
| 20 | Sweet Meats (Mfg.) | 30%–35% | 70 | Gold, Silver & Bronze Mfg. | 20% |
| 21 | Confectionery | 20% | 71 | Making Charge (ornaments) | 50% |
| 22 | Soap (Mfg.) | 25% | 72 | Stone | 50% |
| 23 | Crockeries | 15% | 73 | Rationed Commodities | 2.50% |
| 24 | Brick (Mfg.) | 17% | 74 | Grocery (wholesale) | 7% |
| 25 | Tailoring | 40% | 75 | Grocery (retail) | 15% |
| 26 | Kerosene Oil Distributor | 4% | 76 | Rice (Retail) | 8% |
| 27 | Furniture (Mfg.) | 20% | 77 | Rice (Wholesale) | 4% |
| 28 | Electrical Goods (Mfg.) | 30% | 78 | Engineering Workshop | 50% |
| 29 | Chanachur Sweetmeats | 35% | 79 | Leather & Electric Mfg. | 25%–30% |
| 30 | Supply Business | 10% | 80 | Bidi Mfg. | 1%–4% |
| 31 | Sanitary Fittings | 15% | 81 | Biscuit Mfg. | 20% |
| 32 | Mfg. of Rubber Stamp Manufacturing | 25% | 82 | Paints (Mfg.) | 20% |
| 33 | Office Stationary | 7.5%–10% | 83 | Fruits | 20% |
| 34 | Machinery Tools | 20% | 84 | Radio parts (Retail) | 15% |
| 35 | Washing Laundry | 15% | 85 | Tea Leaves | 10% |
| 36 | Leather Suitcase (Mfg.) | 30% | 86 | Glass Ware | 15% |
| 37 | Umbrella | 40% | 87 | Timber | 20% |
| 38 | Laundry Receipt | 60% | 88 | Dyes & Chemicals (Local) | 6% |
| 39 | Umbrella Mfg. & Sale | 20% | 89 | Scrap Iron | 22% |
| 40 | Books (purchase sale) | 20% | 90 | Mill Stores | 20% |
| 41 | Won Publication | 35% | 91 | Ice Cream Factory | 50% |
| 42 | Medicines (wholesale) | 10% | 92 | Hosiery (Mfg.) | 20% |
| 43 | Medicine (retail) | 15% | 93 | Hosiery (Than) | 12% |
| 44 | Dispensing | 40% | 94 | Dyes & Chemicals (Wholesale) | 4% |
| 45 | Printing Press (on receipt) | 30%–35% | 95 | Cement (wholesale) | 5% |
| 46 | Handloom cloth | 10% | 96 | Fertilizer (wholesale) Govt. | 2% |
| 47 | Mill Made cloth (wholesale) | 5% | 97 | Fertilizer (wholesale) | 5% |
| 48 | Handloom cloth | 10% | 98 | Fertilizer (retail) | 10% |
| 49 | Dal (Pulse) retail | 15% | |||
| 50 | Bakery (Mfg.) | 30% |
In conclusion, the GP Rate for Income Tax remains an indispensable tool for the National Board of Revenue (NBR) to ensure equitable revenue collection from businesses with inconsistent financial records. As we navigate the 2026 assessment year, maintaining a gross profit margin that aligns with industry benchmarks is essential to avoid discretionary audits.
Ultimately, monitoring your GP Rate for Income Tax ensures that your business stays compliant while accurately reflecting its economic health.
Written by-
Rajan Kumer Debnath
Income Tax and VAT Adviser
Member: Dhaka Taxes Bar Association
Chamber 01:House # 05 ( 2nd Floor), Road # 06 Cell: 01727-546514 | Chamber 02:1216, PressClub Road, Kharompattri Cell: 01727-546514 |
