Later, the flag was redesigned to have dimensions similar to those of neighboring India, as they thought it would look better when flown. Other modifications, including changing the color from red to orange, came into force in 1968 or 1969. Likewise, the National Assembly approved a code of conduct in 1972 in order to formalize a flag design, which established a protocol in which the acceptable sizes and the conditions to wave it were made official.

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The current flag is divided diagonally from the lower left corner with the upper triangle colored yellow and the lower triangle orange. Centered along the dividing line is a large black and white dragon facing the upper end of the diagonal, while holding a norbu or jewel in each of its claws. ​ 

According to the Legal Provisions of the National Flag of the Kingdom of the Palden Drukpa as supported in Resolution 28 of the 36th Session of the National Assembly held on June 8, 1972, yellow refers to civil tradition and authority time personified in the Druk Gyalpo, whose royal attire traditionally includes a yellow scarf. For its part, orange means Buddhism as a spiritual authority. Druk, the thunder dragon, is expanded equally from the line between the colors, implying the importance of both civic and monastic traditions in the "Dragon Kingdom" and representing the strength of the sacred bond. between the sovereign and the people. While the white color symbolizes the purity of inner deeds and thoughts that bind the diverse people of Bhutan together.​ The jewels hanging from the dragon's claws refer to the wealth, protection and security of its people.​ while the roaring mouth refers to the commitment of the deities to the defense of the country.