INCOME TAX is a buzzword from our country’s perspective. In Bangladesh People literally got panic attacks for this. Why is it becoming a headache? Because don’t have enough idea about its rule and also they are not familiar with the word like exemption, allowances, deduction, basic tax rates, tax rules, etc. Moreover, they don’t have proper knowledge about Income tax law.
Now in mind, some question is knocking, “Do my salary income exceed basic exemption limits? What’re my limits that income from salary & what’s the overall process for submitting my tax to Tax authority?”
Income tax is a direct and single tax charge on the total income of a person for a relevant year in the relevant assessment year. Section 16 of the ITO, 1984, it has been said that Income tax for any assessment year at any rate or rates shall be charged.
How to Fill Up Income Tax Return Form in Bangladesh
We are going to discuss only income from salaries. For your clear view, we are discussing all the heads of income. According to ITO,1984, and income tax return format, total sources of income are classified under ten heads. Here are the 10 most important things to fill up your income tax return form in Bangladesh
- Salaries
- From house property and asset
- Income from business and professions
- From other sources
- From spouse or minor child
- Interest on securities
- Agricultural income
- Capital gain
- Share in profit in a firm
- Foreign income
Here you can fill up the income tax return form with proper guidelines.
What is the Salary?
Generally, salary means periodical payment or monthly made for work to an employee by an employer for service rendered to him. According to section 2(58) of the ITO, 1984, salary includes:
A. Any pay or wage
B. Any annuity, pension, or gratuity
C. Any fees, commission, allowances, prerequisites instead of, or addition to salary or wage
D. Any advance of salary or wage
E. Any leave encasement
Charge Ability of Income Under the Salary
The charge ability of salary is guided by the relationship between the person making the payment (employer) and the person receiving such payment (employee) in a company or organization. The following incomes will be chargeable to income tax under the head ” Salaries ” as per section 21(1) of the ITO, 1984: Know the latest corporate tax rate in Bangladesh
- Any salary is due from an employer or a previous employer to an assessee in the income year, whether period or not.
- Any salary paid or allowed to him in the income year, by or on behalf of an employer though not due or before it becomes due to him; and
- Any arrears of salary paid or allowed to him in the income year by or on behalf of an employer, it not charged to income tax for any earlier income year.
Elements of Salary or salary statement. Based on the various provisions of the ITO, 1984 and practical situation, elements of salary is more than 25 plus. We are going to give you a shortlist of those which are very popular in our country.
Form of Return of Income Under the Income Tax
– Basic salary
– Bonus
– House rent allowance
– Pension income
– Diem allowance
– Wages
– Professionals allowance
– Medical allowance
– Special allowance etc
Tax-Free Income in Bangladesh
The tax-exempt income limit for salaried individuals or taxpayers has been increased in the proposed budget for FY 2020-21. In the new budget, the tax-exempt income limit has been set at TK 300,000. And female taxpayers and taxpayers above 65 years can enjoy 350000 tax-free income or basic exemption limits.
Those whose earnings don’t reach the mark of TK 300,000 annually, will not have to pay any tax. But there is a condition if the person lives in Dhaka or Chittagong’s municipal area; he/she must have to pay a minimum of TK5000 and for another municipal area the amount of TK 3000 to pay.
Tax rates for all categories of individual taxpayers without companies and local authorities are no tax on first TK 3,00,000; five percent tax on next TK 100,000; 10 percent tax on next TK 300,000; 15 percent on next TK 400,000; 20 percent on next TK 5,00,000; and 25 percent income tax on the balance of total income.
Determination of residential status
In Bangladesh taxation basically depends on residency. There are differences between resident individuals and non-resident individuals in our country. Residents of Bangladesh have to pay taxes for their global income, on the other hand, non-resident has to pay only for their income received in this country.
Income Tax Return Form BD Submission Process is given below:
What is the Timeline and place of submission of Tax Returns?
The starting period of submitting income tax is 1st July. This submission must be undertaken within the 30th, which is popular as “Tax Day” in the case of an individual.
Under the provisions ITO, 1984, a person has to submit a return of tax on his annual income to the deputy commissioner of taxes under whose jurisdiction, the person is assessed.
The total process for salaried employee or person income tax return for 2022-23
If your total salary or wage crosses the limit of 300000 in assessment 20-21 then you have to pay taxes to the tax authority. For this, a person has the description of his income, investment income, and his capital assets and liabilities in the particular forms prescribed by the National Board of Revenue (NBR). NBR creates an income tax calculator for the benefit of taxpayers.
But for salaried employees or persons, the rule or the steps is very simple. There are only a Few steps & they are
First You have to collect all the documents you needed to submit. List of documents for income tax return form BD submission:
– Salary certificate
– Bank statement to which salary transferred
– Rent agreement, bank statement of bank deposits
– Housing loan statement from the bank
– Land tax and utility bill
– Banks statement for business income
– Financial statement
– Capital gain
– Other sources of income like shares, debentures, and saving instruments
– Investment allowance
– Challan
– TIN ID
We will discuss them briefly in our next content. Now focus on the form. Also, know how you can apply online VAT registration certificate in Bangladesh.
After collecting all required documents we have to fill up the –
On the first page of the form, you have to give your general information. To attach the photograph at the right corner and left side, you have to write down the assessment of the year. The assessment year is 20-21
After completing the information, you have to fill up the blank box sequentially.
You have to mention your TIN, Date of Birth, NID, email. You have to write down your spouse’s name. If your spouse has the TIN ID, you should write. If you are single, you can keep the blank unfilled. Here you can get an E-TIN certificate in BD.
In serial number 7, you need to write down two types of information about your tax zone and tax circles. You will have this information from your TIN.
Thereafter, you can use the right mark sign to make out whether you are in residential or not. Under serial number 9, you have to write down your employer name and address as well as your company name and address of your office.
You have to fill this form by 10. Last, of all, you have to provide personal mobile or telephone number. In this way, you can fulfill the first page of the general section.
On the second page, you have to provide information about the Statement of income during this year, the year 2019-20
As you’re a salaried person you must have to calculate total taxable income and tax liability. After the deduction of tax-exempt income the real taxable income will come out, and we have to write down it.
Earning from house property and agricultural land will go to the taxable income after the deduction of admissible expenses and this net taxable income goes under the head of house property and agricultural land.
Then you have to calculate total taxable income from capital gain and income from other sources like income from deposits or shares.
If your only way of income is salary then this section is a note for you and write down N/A.
After adding all the taxable income, you’ll get the total taxable income and write it in seral 5.
Then we have to find the total tax liability by applying applicable rates on total taxable income, and we have to tab it under tax leviable on total income in serial 6.
If you invest in certain areas where tax rebate is active then you’ve to calculate the total rebate and redact it in serial 7 tax rebate.
Then we have to write the total tax payable in serial 9.
After that, you have to submit the total salary statement and Deduct it from your basic salary.
The second page is completed and you’ll see a verification & sign option below this declaration with dates placed and add a TIN ID.
Before the submission of the statement, we have to keep in mind that a False statement could be dangerous for us. So we should provide an accurate statement of salary statement and statement of financial transactions. There’s a catalog punishment for who gives the false statement. So we should check all the statements of financial transactions before submission of statements to Taxation authorities.
The last part is the acknowledgment receipt section. The tax collector will do the rest of it, and he will sign in all the papers with a seal.
This will prove your submission to the NBR by you. This three-part is must be needed for settled the income text return Process.
By following the rules, you will be able to fill up the income tax return form of a salaried person in Bangladesh.
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