A total of 176 homestead forests at three altitudes in the Chittagong Hill Tracts, Bangladesh were randomly surveyed to estimate carbon (C) stocks and how stand structure affects the biomass C. All woody vegetations were measured, and litter and soil (0-30 cm depth) were sampled. The tree biomass C stock in the top two altitude forests was up to 37-48% higher than in low altitude, owing to significantly higher tree density and species diversity. An increase in species diversity index by one unit increased the biomass stock by 23 Mg C ha-1. The C stock of litterfall in low altitude forests was 22-28% higher than in the top two altitude due to the deposition of litters downslope and deliberate use of mulch for soil improvement and conservation, resulting in up to 5% higher total soil C. The topsoil C was 10-25% higher than the deeper soil, depending on the altitude. The forest stored 89 Mg C ha-1, indicating a potential for C sequestration in trees outside forest. This study would help policymakers to strengthen the recognition of small-scale forests for mitigation in REDD + (reducing emissions from deforestation and forest degradation, the role of conservation, sustainable management of forests, and enhancement of forest carbon stocks) and support owners through C credits from sustainably managed forests.