The government plans to bring changes in income tax rules for realising tax on house rent as the existing rules are not enough to check tax evasion.
“We will make new rules for realising tax on house rent after the passage of a finance bill,” National Board of Revenue Chairman Md Ghulam Hussain said at a post-budget press briefing yesterday.
Currently, he said, there is a provision for imposing a 10% penalty in the income tax ordinance, but there will be a provision for 50% fines if house owners are found guilty of not receiving the house payment of over Tk25,000 through cheque.
He, however, said the government is yet to formulate any rule or policy on how to make payment of house rents through banking channel to ensure transparency in the house rent collection.
In the proposed budget for the fiscal year 2014-15, Finance Minister AMA Muhith proposed that the house rent of over Tk25,000 a month should be paid through bank cheques.
The rents will include service charges related to rental property. “This would bring more people under tax net while prohibiting the practice of dodging tax on earnings from rental property.”
