The process of paying taxes was a daunting task even a couple of years back, but to encourage people to contribute more to the government’s revenue, the process has been made much easier.
Taxes pave the way for roads, funds public libraries, heritage sites and parks, and supports so many other socially beneficial government programs, like subsidies in agriculture, education, electricity etc.
Who should pay taxes?
For those whose annual income is more than Tk3 lakh, for women, the third gender, and people aged 65 years and above, the annual income has to be more than Tk3.5 lakh.
For the disabled, the annual income has to be more than Tk4.5 lakh.
And for gazetted war-wounded freedom fighters; whose annual income is more than Tk4.75 lakh.
Also for whom return filing is required
- Those who have taken 12-digit TIN certificates
- Those whose income has been taxable or whose income has been assessed in any of the previous three years
- Those who have shares of a particular company in their name
- Those who are partners in a firm
- Those government officials whose salary is Tk16 thousand or more at any time of the year
- An executive or managerial position employee
- Those who are exempted from work or have become taxable in case of reduced income
- Those who own any type of motor vehicle
- Trade license holders are traders
- Member of any association covered by the Value Added Tax Act
- Doctors, Dentists, Chartered Accountants, Lawyers, Accountants, Architects, Engineers
- Persons registered with any recognized organization as surveyors or professionals of any such work
- Income Tax Officer registered with National Board of Revenue
- Individuals who are members of chambers of industry or trade associations
- Candidates for City Corporation/Municipality/Member of Parliament elections
- Persons participating in tenders of autonomous, government, semi-government or local government
- Persons appointed to the Board of Directors of the Company
- Persons possessing licensed arms
- Individuals participating in shared finance activities by providing space, vehicles, accommodation or other resources
Those who do not have to file income tax returns
- Non-residents who have no permanent base in Bangladesh
- People who have to make 12 figures to sell land or get a credit card, but have no taxable income
Essential documents for tax returns submission
Read the tax return instruction for the most recent fiscal year from NBR. If you filed the return last year, keep its copy with you.
Manage some essential papers including your income statement/salary statement/profit and loss statement/personal and family expenditure information.
Bangladeshi citizens who have TIN certificates are compulsorily required to file income tax returns every year.
If anyone doesn’t file returns, they will be subject to penalties and fines as per law.
From this year anyone can file an income tax e-return online from home (Fiscal Year 2021 -22) and download the tax certificate instantly.
Getting a TIN
The first step is to register for and collect a Tax Identification Number (TIN).
During TIN registration, every applicant is given a zone, region or tax circle, which is useful during doing tax returns.
Any earning individual who is above the age of 18 can have his/her own TIN.
Those who register must submit tax returns at least annually.
Calculating the taxes
Your share of taxable income is calculated on the basis of your past fiscal year's total income.
To facilitate the process further, NBR has also launched an online tax calculator that can be used to assess your taxes for the year.
For example, this year's taxable income will be based on income earned between July 1, 2021 to June 30 2022.
Another point to remember is that even if an individual holds a TIN but has zero taxable income, they still have to submit their tax return slips in due time.
Tax return reporting timeline
The time for submission of tax returns by individual taxpayers started on July 1 and is scheduled to end on November 30, 2022.
The following part will enlighten new taxpayers about submitting income tax returns online without going to the tax office.
Registering with the e-Return System
To submit an e-return online, you will have to register or sign up for the return system using your TIN and mobile number registered in your name.
Filling out the tax return form
Anyone can easily download the standard four-page tax return form for free from the official NBR website.
Then have to fill out the information and details like income, assets, earnings, investments, etc as applicable to the individual.
Those who find this process tedious can also always seek the help of a professional, like a tax lawyer to guide them through the process.
After finishing it, anyone can file his/her tax return online or take a print copy of the return form and submit it directly to the income tax circle.
Zero return
If no tax is payable on anyone’s income, the payable amount will be zero. Those whose return payable tax amount is zero, their return is called zero return.
At this stage his/her income tax return is completed. Now they can file their return online or take a print copy of the return form and submit it directly to the income tax circle.
Online return
Taxpayers can submit the return online by clicking the online return. After that, he/she can see a preview of the return form. At the bottom of the form, you have to give Yes in the Verification and Signature option to give your consent.
Your permission to file the return is finally sought here. Remember, after clicking on the Yes button, your return will be submitted.
After that, you can’t make any changes. So if you have any doubts that there is any mistake in the information, you can check the form again by clicking the No button.
If everything is correct, then click on the Yes button and submit the return.
Verify the authenticity of tax-return submissions
The National Board of Revenue (NBR) has launched a digital system to verify the authenticity of tax-return submissions and expedite service delivery by the authorities concerned.
Its income-tax wing officially opened up the “tax return verification module” on August 21 last, officials said.
Anyone from across the country can verify the authenticity of the return submission by inserting Taxpayers Identification Number (TIN) in the module, available on the NBR's website.
The privacy of taxpayers' information would not be affected in the verification process, they added.
Mohammad Jahid Hassan, NBR member (tax information, management and services), said around 4,000 people are verifying their tax returns every day using the app.
Use of the module would go up soon as the deadline for submission of returns by individual taxpayers is approaching, he said.
The time for submission of tax returns by individual taxpayers started on July 1 and is scheduled to end on November 30, 2022.
The taxpayers can take a printout of the verification slip on their own to show the service-providing authority.
At least one million people would need the services of this module.
A tax return slip is mandatory for obtaining different services like opening and continuing bank accounts, and utility connections.
Offline or paper return
If anyone is not familiar with computers or if they think e-return is a bit complicated, he/she may use the old fashion way.
They need to fill up the return form with a pen and submit it.
Every year changes are made in this form from NBR and taxpayers can collect any new or old return form from their nearest income tax office free of charge.
In addition to that, the required forms can also be downloaded from the NBR website.
The applicable forms for the taxpayer must be duly filled by providing accurate and relevant information. If there is any doubt or confusion about any matter at this time, it is better to consult a lawyer.
After completing the forms go to your tax circle. Separate income tax circles are specified for filing returns based on the class of taxpayers. For example, all civilian government and pensioners located in Dhaka District whose names begin with letters A, B. and C. are required to submit returns to Dhaka Tax Circle-71 and Tax Zone-4.
New taxpayers can file income tax returns by mentioning the 12-digit TIN number, name, place of employment or address of the business establishment under the tax zone.
Besides, if necessary, they can know about the circle office from the nearest income tax office or tax advisory centre.
Penalty for late submission of tax return
There is a provision for a penalty if a return is not filed on time. In this case, the Deputy Tax Commissioner may impose a One-time penalty of up to 10% of the tax payable in the latest tax assessment.