Under the Income Tax Ordinance (ITO), 1984, an individual is required to submit an income tax return, using the designated form, with the Deputy Commissioner (DC) of Taxes if their income surpasses the non-chargeable limit or the assessable income of another person.
Here, we have provided a step-by-step guide on how to prepare income tax returns in Bangladesh
Who will Submit Income Tax Return in Bangladesh
Men and women whose income is more than Tk 300000 and Tk 350000 respectively have to pay income tax return in Bangladesh. These tax rates vary based on income levels, with higher rates applied to higher income brackets.
| Tax-Exempted Income Categories | Current FY 2022 - 2023 | Proposed FY 2023-2024 |
| Male taxpayer | Tk. 300,000 | Tk. 350,000 |
| Women and Senior citizens 65+ years | Tk. 350,000 | Tk. 400,000 |
| Physically Challenged persons | Tk. 450,000 | Tk. 475,000 |
| War-wounded gazette freedom fighter | Tk. 475,000 | Tk. 500,000 |
| Third gender taxpayers | Tk. 350,000 | Tk. 475,000 |
The income tax-free limit would be increased for parents or legal guardians of physically challenged child or dependents by Tk. 50 thousand for each child/ dependent.
What is the Time Period of Tax Return Submission
The tax filing period is from July 1 to November 30 in Bangladesh for each FY, and you must file your returns during this time.
NBR can extend the deadline for the convenience of the taxpayer. NBR has already extended the deadline until January 31, 2024.
What is the Rate of Income Tax
Under the rules of the (NBR), once your income crosses a specific limit, you’re obliged to submit taxes on it. But there are exceptions for certain categories—they have higher thresholds before tax payments kick in.
By default, if your yearly income goes beyond TK 300000, you need to file your income tax.
Even if your income is below any of the set thresholds, it’s still necessary to file income tax.
However, in such cases, you simply file it as a ‘zero return’ to avoid fines and penalties.
| Total Income | Rate of Tax(%) for FY 2022 - 2023 | |
| Up to first Tk. 3,00,000 | 0% | |
| For next Tk. 1,00,000 | 5% | |
| For next Tk. 3,00,000 | 10% | |
| For next Tk. 4,00,000 | 15% | |
| For next Tk. 5,00,000 | 20% | |
| For the rest of the amount | 25% | |
Furthermore, the minimum amount of income tax payable for those who live in DNCC, DSCC, and Chittagong City Corporation is Tk. 5,000, other city corporations are Tk. 4,000 and outside city corporations are Tk. 3,000.
Tax Calculation
Income tax calculation in Bangladesh is based on a progressive tax system.
As income increases, the corresponding tax rate rises. You can find some income tax calculators in Bangladesh online, predicting your tax liability.
What you Need to do to File an Income Tax Return in Bangladesh
Before starting, make sure you have all the required documents ready in hand. This ensures a smooth submission process.
The important paperworks to have on hand are:
- eTIN
- NID copy
- Home address
- Previous years return
- Investment details(if any)
- Property details(if any)
- Tax-free income certificates(if any)
If you are employed then you also need:
- Salary certificates
- Bank statements
How to File Income Tax Return in Bangladesh: Step by Step Procedure
Filing of income tax returns in Bangladesh can be done through both offline and online methods. Here’s a step-by-step guide for both approaches:
TIN Certificate
As a Bangladeshi citizen holding a 12-digit TIN certificate, annual income tax return filing is obligatory.
Firstly get a TIN, and upon application, you’ll be allocated a specific zone or region. Citizens with TINs can conveniently file income tax e-returns online, allowing you to instantly download your tax certificates from home.
Step 1: Register on the E-Return System
To file an e-return in Bangladesh, visit NBR website and sign up/register on the e-return system entering your TIN and biometrically registered mobile number, and captcha. Click Verify, complete phone verification with the provided OTP, and set a password for future logins.
Step 2: Login to the System
visit NBR website, select ‘eReturn’ and input your TIN, password, and captcha to sign in.
Once signed in, click on the ‘Return Submission’ option on the left from the dashboard.
Step 3: Provide Tax Assessment Information
In the initial section of the e-return form, there is ‘Tax Assessment Information’. Here, you must provide income tax-related information like income year, heads of income, income source, and return scheme. If your earnings are tax-exempt, provide the relevant amount and your resident status.
Click the “Save and Continue” button to proceed to the next step.
Step 4: Enter Income Information
Here, you have to provide information regarding your income source, data on tax rebates, and fill in asset and liability details.
Step 5: Income Details
During this step, provide your multiple sources of income under ‘Heads of Income’ like, securities interest, salaries, house property income etc.
Additionally, if your sole income source is your salary, opt for ‘Salary’. Otherwise, select ‘Income from other sources’, along with specifying the sources from the dropdown menu. If you’ve income exempt from tax, input the amount in the designated box. This lays the foundation for accurate tax calculations. Fill the “Income Summary” accurately.
Proceed by clicking ‘Save and continue.’
Step 6: Other Sources Income Details
In this step, you need to provide your income details from other sources, including foreign or tax-exempt income.
Provide details like the income source, payment authority, latest income received date, and related expenses and amounts. The system will automatically compute your net income, displayed on the screen.
Proceed by clicking ‘Save and continue’.
Step 7: Complete Additional Information
Specify your primary income source location from a dropdown menu, eligibility for rebates, and shareholder directorship status.
Furthermore, mention if you’re a war-wounded gazette freedom fighter, seeking benefits as a parent or legal guardian of a person with a disability or if you have a disability.
Step 8: Submit Investment Details
Choose a category for your investments like, deposit premium service (DPS), life insurance premium, general provident fund, group insurance premium, approved stocks or shares, etc.
For respective categories, select that option and input details like Bank’s name, account number, and deposit amount. This will reveal your total eligible investment for rebates.
Proceed by clicking ‘Save and Continue.’
Step 9: Input Expenditure Information
In this step, provide your expenditure information. You’ll see various expenditure categories, enabling you to input amounts and include comments.
If your total assets exceed Tk. 40 lakh, complete the IT10B form. Otherwise, if below Tk. 40 lakh, specify your total annual expenses without IT10B.
Once you’ve filled in these details, the system will calculate the amount of tax you owe.
Step 10: Tax and Payment
In this section, declare any source tax and advance tax payments you have already paid. The system automatically deducts these from your total tax liability.
If your income incurs no tax, the payable amount is zero, resulting in a ‘Zero Return.’
With this, your income tax return is almost completed.
Step 11: Review and Submit
Review all the processes, if it is okay then submit it. Income tax returns can be submitted both online and offline-
- Offline or Paper Return
Print the income tax return form by selecting the offline (Paper) Return option. Submit the form directly to the relevant Income Tax Circle Office free of cost.
- Online Income Tax Return
Opt for ‘Online Return’ for electronic submission. Review the form and select ‘No’ if you’ve any doubts about the information after reviewing.
If all is accurate, procced to submit by selecting ‘Yes’ in the Verification and Signature section. Once submitted, no changes are possible.
Upon successful submission, a message confirms, “Congratulations! Your return submission was successful.”
From here, download the Reference ID and Acknowledgment Receipt for your records.
Your income tax return process is now complete. You can now file your return electronically or print a copy of the form and mail it straight to the income tax department.
Offline Paper-Based Tax Return
If you find e-returns challenging, you can proceed to the traditional method.
- Obtain Necessary Forms
Collect the required tax return forms, either from your nearest income tax office at no cost or download them from the NBR website.
- Complete the Forms
Fill out the return form, providing accurate information on income, expenditures, and investments.
- Prepare Required Documents
Primarily, acquire copies of eTIN, NID, previous year’s return, and address details.
For employees, salary certificates, bank statements, provident fund information, Recognized Provident Fund (RPF), TDS Chalan, assets-liabilities statement, and other relevant documents.
Prepare investment, property, and tax-free income papers.
Depending on your various income sources, submit papers as required.
- Consultation if Needed
If you encounter complexities or doubts, seek guidance from professionals or legal advisors.
Explore convenient options for filing your taxes in Bangladesh through a third-party tax management system like PiHR. These online tools can make the process smoother and more accessible for you.
- Visit the Tax Circle Office
After form completion, submit the completed forms to the designated Tax Circle office based on your taxpayer category.
Wrapping Up
Whether filing online or offline, this detailed guide aids you in successfully filing your income tax return.
Successfully filing income tax returns ensures compliance with tax regulations and contributes to the financial stability of individuals in Bangladesh.
FAQ
What is the income tax rate in Bangladesh
It varies based on income levels, rating from 0% up to 25%, with different slabs determining the applicable rate.
Can I submit an income tax return online in Bangladesh
Yes, online tax return submission in Bangladesh is available, click here.
What is the minimum taxable income in Bangladesh
The minimum taxable income in Bangladesh is Tk. 300,000 (FY 2022-2023).
What is the last date of income tax return in Bangladesh
The last date for filing income tax returns in Bangladesh is November 30th each year. Income tax return submission date can be extended by NBR. Currently deadline is extended from November 30, 2023 to January 31, 2024.
Is there a penalty for late tax submission
Yes, there is a penalty for late submission.
if a taxpayer misses the deadline for submitting tax returns, they are obligated to pay an extra 4% interest on their tax liabilities for every month, up to a period of 24 months.
