Roy & Associates

Income Tax Bangladesh:

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Income Tax is a very vast subject and it is impossible to discuss the same in one Article. In this Article we will discuss only the  basic topics of Income Tax Bangladesh and the issues regarding Individual Tax Payers. This article cover the following issues: 

  • What is Income Tax ?
  • What is Income Tax Return/Tax Return ?
  • What are the Applicable Income Tax Laws in Bangladesh ? 
  • What are the Sources of Income ?
  • Income Tax slab and Income Tax Rate for Individual Tax Payer in Bangladesh
  • What is the minimum payable Tax Amount ?
  • What is the Rate of Tax Rebate in Bangladesh ?
  • What type of investment qualified for Tax Rebate in Bangladesh?  
  • Who are required to file Income Tax Return ?
  • Time Limit of submission of Income Tax Return in Bangladesh ?
  • Income Tax Return Form Availability/Download
  • Where to submit Income Tax Return Form ?
  • Penalty for not filing Income Tax Return ?
  • Consequence of using Fake Tin 
  • What is Income Tax ?

Income Tax is direct tax, which is the first and foremost source of government revenue. Income Tax is a tax on income, which is levied on the taxable income of a Individual or Company as per the provisions of the Income Tax Ordinance 1984. 

  • What is Income Tax Return/Tax Return ?

Income Tax Return means submission of return of income by an Individual  in the prescribed form and manner to the Deputy Commissioner of Taxes under the Income Tax Ordinance, 1984. 

  • What are the Applicable Income Tax Laws in Bangladesh ? 

The Income Tax Ordinance 1984 (ITO), Income Tax Rules 1984, Finance Act, Statutory Regulatory Orders (SRO) and Judicial Decisions. 

  • What are the Sources of Income ?

According to section 20 of the ITO 1984, for the purpose of Computation of total Income Tax sources of income can be classified into 7 categories, which are as follows: 

  1. Salaries 
  2. Interest on securities 
  3. Income from house property 
  4. Agricultural Income 
  5. Income from business or profession 
  6. Capital Gains 
  7. Income from other sources. 
  • Income Tax Slab and Income Tax Rates for an Individual Tax Payer in Bangladesh

As per Finance Act 2019 the Income Tax Slab and Income Tax rates for an Individual Tax Payer for the Income Tax Year 2019-2020 are given below: 

  1. For First Total Income BDT 2,50,000- Rate of Tax 0% 
  2. For Next Total Income BDT 4,00,000- Rate of Tax 10% 
  3. For Next Total Income BDT 5,00,000- Rate of Tax 15%
  4. For Next Total Income BDT 6,00,000- Rate of Tax 20%
  5. For Next Total Income BDT 30,00,000- Rate of Tax 25%
  6. For the Rest Total Income- Rate of Tax 30% 

The non-taxable Income Tax slab for Women, Person with disability and Gazette enlisted War wounded Freedom Fighters are as follows: 

  1. Women and Senior Tax payers of 65 years for First Total Income BDT 3,00,000- Rate of Tax 0%
  2. Person with disability for First Total Income BDT 4,00,000-Rate of Tax 0%
  3. Gazette enlisted War wounded Freedom Fighters for First Total Income BDT 4,25,000-Rate of Tax 0%  

The tax rates for Women, Senior Tax Payers of 65 years, Person with disability, Gazette enlisted War wounded Freedom Fighters are same after exceeding the maximum non taxable slab as mentioned above. 

  • What is the Minimum Payable Tax Amount ?
  1. For any Individual living in Dhaka and City Corporation- BDT 5,000.
  2. For any Individual living in Other City Corporation- BDT 4,000.
  3. For any Individual living in any other area- BDT 3,000.
  4. For non-resident individual –30% 
  • What is the Rate of Tax Rebate in Bangladesh? 

In Bangladesh, Amount of Allowable investment is- actual investment or 30% of total (taxable) income or BDT 1,50,000 whichever is less. Tax rebate amounts to 15% of allowable investment. 

  • What types of investment qualified for the tax rebate in Bangladesh ?
  1. Life insurance premium up to 10% of the face value.
  2. Contribution to Provident Fund 
  3. Self contribution and employer’s contribution to Recognized Provident Fund 
  4. Contribution to Superannuation Fund 
  5. Contribution up to 60,000 to deposit pension scheme 
  6. Investment in approved debenture, Stocks or Shares.
  7. Contribution to Benevolent Fund and Group Insurance Premium 
  8. Contribution to Zakat Fund
  9. Donation to Charitable Hospital 
  10. Donation to philanthropic or educational institution 
  11. Donation to Socio-economic or Cultural Development institution 
  12. Donation to ICDDRB, CRP, ASiatic Society of Bangladesh, Muktijodha Jadughar etc.
  13. Donation to National Level Institution set up in memory of Liberation war, Father of the Nation
  14. Investment in savings certificate and Bangladesh Government Treasury Bond.
  • Who are required to file Income Tax Return ?

As per section 75 of the ITO the following persons should have to file the tax return. 

  1. If the total income of the person during the income year exceeds the maximum amount that is not chargeable to tax under this Ordinance; or 
  2. If such person was assessed to tax for any one of the three years immediately preceding that income year; or

Besides that where a person is not required to file a tax return under the above mentioned conditions , the person shall have file a return if he- 

  1. Resides in City Corporation or Paurashava Area or Divisional Head Quarters (HQ) or District HQ and fulfills the following conditions-
  • Owns a motor car ; or

  • Owns a membership of a club registered under  value added tax ; or

  • Runs any business or profession having trade license from a city corporation, a Paurashava or a Union Parishad; or

  • Has registered with a recognized professional body as a Doctor, Dentist, Lawyer, Chartered Accountant, Cost and Management Accountant, Engineer, Architect or Surveyor or any other similar profession; or

  • Has registered with the Board as an Income Tax Practitioner; or

  • Has a membership of a Chamber of Commerce and Industries or a Trade Association or body; or

  • Runs for an office of any Paurashava, City Corporation, or a Member of Parliament; or

  • Participates in a tender floated by the government, semi-government, autonomous body or a local authority; or

  • Serves in the board of directors of a company or a group of companies; or

  • Participates in a ride sharing arrangement by providing motor vehicle; or

  • Has a Tax Identification Number (TIN)

  • Time Limit of submission of Income Tax Return in Bangladesh ?

An Individual Tax Payer have to file his tax return by the Tax Day. Government has declared 30th November as Tax Day. Therefore if time not extended then an Individual Tax Payer have to file his tax return within 30th November

If the tax payer can not prepare and/or submit his Income Tax Return within the said period, the payer may apply for time to the Deputy Commissioner of Taxes in the prescribed form. The prescribed form is available in the website of National Board of Revenue, Bangladesh (NBR). 

  • Income Tax Return Form Availability/Download

An Individual Tax Payer is entitle to get Income Tax Form without any charge from the Income Tax Authorities. A Tax payer may also download it from the National Board of Revenue, Bangladesh (NBR) Website. Besides that A Tax Payer can also use the Photocopy of the prescribed Income Tax Return From. 

A Tax Payer can also submit his return Online and the whole procedure is available here. 

  • Where to Submit Income Tax Return ? 

In Bangladesh there are specific Tax Circle for every Types of Tax Payers to submit Income Tax Return in their respective area. A Tax Payer can also submit his Tax Return in the Tax Fair in his area. In the TIN Certificate the Tax Circle of the Tax Payer is clearly mentioned. 

  • Penalty for not Filing Income Tax Return
  1. Imposition of penalty amounting to 10% of tax on last assessed income subject to a minimum of 1,000 BDT
  2. An Individual who as not assessed previously BDT 5000.
  3. An individual who was assessed previously, fifty percent (50%) of the tax payable on the last assessed income or BDT 1000 whichever is higher 
  4. Further penalty of BDT 50 for every day of delay.
  • Consequences of using Fake TIN
  1. DCT can impose a Penalty not exceeding BDT 20,000
  2. Use of Fake TIN Deliberately- 3 years imprisonment, up to 50,000 BDT fine or both. 

Read Our Related Article: Income Tax Return Filing in Bangladesh.