The students barricaded key roads across Dhaka as part of the rally, bringing traffic to a halt in the city of 15 million people, as police looked on.
Tensions were high after police fired rubber bullets and tear gas at protesting students yesterday from the city's East West University after they blocked a key road.
At least 35 people were injured in the clashes between protesters and police, mass-circulated English newspaper The Daily Star said.
"Education is not a product but one of our fundamental rights. This added tax is absolutely absurd," he said.
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Students are angry over a 7.5 per cent value added tax slapped recently on fees for private universities where thousands of Bangladeshi students are enrolled, but not those for public institutions.
Police said several thousand took part in today's protest, but organisers said tens of thousands of students from private universities staged the demonstrations.
Government worker Abdullah-al Kafi said he supported the protest despite being forced to walk nearly seven kilometres to his office because of the traffic disruptions.