Bhutan’s rapid modernization since the 1960s has significantly transformed its socioeconomic landscape, particularly with the integration of information and communication technology (ICT). While urban centers have experienced substantial digital growth, a persistent digital divide remains, disproportionately affecting rural communities and school children. During the COVID-19 pandemic, the digital divide between rural and urban schools became prominent as schools were required to transition from classroom learning to virtual learning. Many rural students could not enjoy and benefit from the virtual learning as much as the urban students could due to limited access to smart phones and poor internet connectivity. These constraints not only hindered educational progression but also deepened existing socioeconomic disparities, highlighting a crucial challenge in Bhutan’s education sector. This chapter explores the structural and systemic causes of digital inequality among Bhutanese school children, emphasizing socioeconomic barriers, inadequate ICT infrastructure, and the technological competency gap among teachers. By analyzing existing literature and statistical data, the chapter provides insights into Bhutan’s digital transformation efforts in education, policy interventions, and ongoing challenges. The chapter also delves into the impact of digital disparities on students’ academic performance, learning outcomes, and psychological well-being. The study proposes key policy recommendations, such as expanding broadband internet in rural areas, subsidizing ICT access for disadvantaged students, improving digital literacy programs, and enhancing teacher training in ICT-based pedagogy to bridge the digital gap in education.