The income tax return is the form that every eligible earning citizen must complete to show their gross taxable income. This is usually provided by the government or taxing authorities by which individuals must declare their income and deductions to pay taxes.
Personal information, employment details, and business, investment, and asset information are the documents required for income tax returns in Bangladesh. As per the instruction of NBR, this needs to be submitted within the deadline of November 30.
Failure to submit it before the time can impose penalties. Not only do the taxpayers need to pay BDT 50 for each day, but they also need to pay 10% of the previous income. To save from this hassle, it’s better to prepare all the required documents for tax return on time.
What Is an Income Tax Return?
An income tax return is a formal statement that helps taxpayers to declare their income, tax deductions, and payables. This needs to be filled out annually if your income satisfies the fixed criteria for eligibility.
In Bangladesh, the National Board of Revenue (NBR) monitors the tax regulations to maintain compliance. As per the law, every eligible individual and company is required to pay the income tax return within the deadline.
What Types of Incomes Require an Income Tax Return in Bangladesh?
According to NBR, several types of income sources are needed to submit tax return documents and pay taxes.
For individuals, the fixed types are listed below.
- Salaried income
- Interests on security and dividend income
- Income from house property and agriculture
- Income from business and professions
- Capital gains
- Other income sources
For companies, various sectors are mandated to file income tax.
- Publicly and non-publicly traded companies
- Financial institutions, including banks and insurance
- Merchant banks
- Cigarettes manufacturing companies
- Mobile phone operators
- Publicly traded mobile phone companies
Which Incomes Are Exempt From Tax in Bangladesh?
To boost the country’s social welfare, many sectors are exempted from taxes in Bangladesh. According to Daily Bangladesh, the incomes that are exempted from tax in Bangladesh are as follows.
- Government employees receiving special allowances
- Pensions
- Capital gain parts from any partnered firms
- Authorized gratuity up to 2.5 crore BDT
- Amount received by provident fund
- Tax benefits up to 50,000 BDT from Workers Participation Fund
- Income up to 25,000 BDT from interest, profit and dividend
- Cash dividend sector income from stock exchange listed company
- Financial activities income conducted in hilly and tribal regions
- 50% of the income of the export business
- When the only source of income comes from agricultural tax, exempted up to 2 lac BDT
- Zero coupon bond income
- Tax benefits up to 20 lac BDT from poultry income
- Tax benefits up to 10 lac BDT from fisheries and hatcheries income
- Tax exempted for income of SME up to 50 lac BDT generally and for women 70 lac BDT
- Allowance received from Freedom Fighter Welfare Trust
- Remittance income
What Documents Are Required for Income Tax Return Submission?
For proper tax return submission, the taxpayers have to prepare all the documents needed for the tax return. These range from personal documents to employment, investments, and asset information.
Personal Information
To provide the personal information, the following documents need to be submitted.
1. Photocopy of e-TIN Certificate
To provide a tax return certificate, the government needs the TIN or Tax Identification Number. This holds a 12-digit number, which is needed to complete the tax filings. A photocopy of the e-TIN certificate needs to be provided.
2. Photocopy of NID
A similar norm applies to the NID as the TIN certificate. The photocopy of the recent NID and the NID number needs to be submitted. This will also be included with your personal information as a verification of your identity.
3. Bank Statement
As most of the salaries are provided monthly by the banks, the taxpayers need to submit bank statements for tax returns. This acts as a proof of the salaried income.
Individuals can contact the respective bank branch to get the bank statement. They will guide you through the entire process. It is a non-negotiable part; and taxpayers must attach this to the tax return form.
4. Last Year’s Income Tax Return Copy
The citizens also need to provide a copy of the previous income tax return along with all the recent copies. This acts as proof of last year’s tax. This can’t be avoided as it proves compliance with tax laws.
5. Tax Challan and AIT Documents (If Any)
Tax challans are nothing but tax reports. This is issued with the date, purpose, and the paid amount. Formal proof of paid tax is required for tax credits, refunds, and official requirements.
On the other hand, AIT or Advance Income Tax documents show tax payments made in advance before the annual filing. This issues records and certificates and is mainly used by businesses and institutes to maintain detailed records. It helps them avoid double-taxing hassles.
Employment-Related Documents
After completing all the personal information, it’s time for employment details.
1. Salary Certificate from HR
A salary certificate is a statement that breaks down the gross salary, deductibles, and tax amounts. This not only provides the net income but also gives the entire inside-out of the annual income, including HRA, conveyance allowance, and other benefits.
This needs to be provided as a salary certificate for tax returns. Just by asking the employer or HR, anyone can get a salary certificate. But remember, it needs to follow the authorized salary certificate format in Bangladesh to submit the tax return.
2. Bank Statement
Taxpayers need to submit a bank statement for the income tax return. However, the date range matters a lot here. The bank statement should cover the entire tax year.
4. Provident Certificate
As proof of the provident fund, the taxpayers can show the provident certificate. This document will highlight the provident fund amount being deducted from the gross salary. Thus, it will help to complete the taxing calculation and give a clear percentage of the income tax returns.
5. TDS Certificate (For Non-Salary Income)
TDS (Tax Deducted at Source) is the document used to deposit the tax withheld. This applies to both businesses and individuals.
According to the Bangladesh jurisdiction, the rates of TDS can vary by transaction type. For example, the TDS rate for professional or technical services is 10%, while the transport service is 5%. Individuals must know the proper TDS rate and submit the document to complete the income tax return.
Business Information (If Any)
When an individual owns a business and has a running income coming from the source, they also need to file the business income for a tax return. In that case, some extra documents are required for tax returns in Bangladesh, such as a trade license, income, and asset-liability statement.
1. Trade License
A trade license is one of the required documents for income tax filing. It is a legal paper that allows businesses to operate in a specific field. It is more like a business permit.
While submitting the tax return, taxpayers need to ensure they have a trade license. This proves how accurately they maintain all the rules & regulations and how they comply with them. Failure to provide this not only declines the tax return submission but can also issue penalties.
2. Annual Purchase-Sales and Income Statement
The business’s income statement and annual purchase sales show revenues and costs. It also highlights the net amount, including the tax deductible. This document is required to show how much the entire income is and what taxes are mandated to pay by the taxpayer.
3. Financial Statement
Then comes another important document of the business – financial statement or balance sheet. This shows the exact amount of net income, assets and liabilities the individual’s business possesses. Usually, this has a timeline and mentions the details about this period. When filing a tax form, it is better to provide the asset and liability statement for the fiscal year. If anyone is paying taxes from July 2023 to June 2024, they should provide the business statement for that period.
4. Bank Statement
Similar to salaried income, business income also needs a bank statement when filing a tax return. As most of the transactions, revenues, and costs are associated with the bank account, a bank statement portrays the entire proof of income.
Taxpayers need to provide the bank statement of the period they’re paying the taxes. It increases the chances of being accepted for a successful tax return.
Investment Information (If Any)
Besides the employment details and business information, if the taxpayer owns an investment generating income, it is also crucial to mention it. The documents here can include D.P.S., insurance & saving certificate, and any share market investments.
1. D.P.S. (Deposit Pension Scheme)
Deposit Pension Scheme, more commonly known as D.P.S., is a savings scheme where people save a small amount of their income every month. With regular deposits, anyone can invest a good amount of savings for the future.
Taxpayers need to submit proof of the D.P.S, If they have any. This will help the officials understand the taxed amount while complying with local laws.
2. Insurance Certificate
If individuals have any insurance, proof of the amount is also required. For this reason, they need to apply for the insurance certificate. It is not a complicated job; asking the insurance company can easily solve the deal.
Take a photocopy of the insurance certificate and attach it to other required documents for the tax return. Without proof, chances are high that it will be rejected from the tax return.
3. Share Market Investment
Share market investment is another form of investment that must be mentioned in the tax return form. When anyone has any partial stake in a company and earns through this, they need to account for this.
The share market investments must be declared in the tax return while preparing the necessary documents. These will speak as proof and clear every type of misinformation.
4. Savings Certificates
Income from savings is also a type of investment as approved by the NBR. Therefore, this document is also mandated for taxpayers. Arrange proper saving certificates along with other documents required for tax returns. Ask this from the bank branch where the savings account is. This will help to keep all incomes and savings transparent.
Property and Asset Information (If Any)
That’s not all. Still, taxpayers need to provide the property information with the tax return if they own anything that is considered an income source.
1. House or Apartment Deed
Based on the location, citizens of Bangladesh need to provide 3 to 4% of the taxes on the house deed. This rate can be lower in some areas like Cantonments. However, it must show the deed on your tax return if any house or apartment is owned.
As per Bangladesh Tax Insights, the tax year is between the 1st of July and the 30th of June of the next year. For this reason, the deed must also be provided within this time frame.
2. Land, Car, Electronics
Taxpayers must submit documents for any income-generating assets like land, vehicles, or electronics. This will clarify all the income, assets, and investments. As a result, the officials also would get the clearest idea of the deductibles.
What Is the Minimum Tax Amount in Bangladesh?
According to the Income Tax Act, the minimum tax amount in Bangladesh is BDT 5,000, which applies to every resident citizen. In Dhaka and Chittagong metropolitan area. Outside the City corporation, this value ranges from 4000 to 3000 BDT. However, for non-residents, the taxing amount is 30%.
As stated by ICAB, individuals above the threshold salary of 300,000 BDT must pay the taxes. For women and senior citizens of 65 and above, the tax-free limit is 350,000 BDT. This tax limit can increase to 450,000 BDT for the physically challenged and more for freedom fighters.
What Tax Rebates Are Available in Bangladesh?
As cited in the government documents of NBR, many types of investments qualify for the tax rebate. The investment amount should be 30% of the total income or 1, 50, 00, 000 BDT (whichever is less). The tax rebate is 15% of the investment.
When Is the Tax Return Submission Deadline in Bangladesh for 2024-2025?
The tax return submission deadline in Bangladesh for the assessment year 2024-2025, originally set for November 30, 2024, has now been extended to December 31, 2024 for all taxpayers except companies. This extension, announced by the National Board of Revenue (NBR) on November 17, 2024, allows taxpayers to submit their returns without any fines in both offline and online modes until the new deadline.
For first-time assessments, the submission deadline remains June 30, and failing to file within the given time may result in penalties, such as a fine of 5,000 BDT for first-timers or 50% or 1,000 BDT of the last taxed amount, whichever is higher.
What Is the Difference Between the Fiscal Year and the Assessment Year?
Being interconnected, the fiscal year and the assessment year have some sheer differences. Generally, the fiscal year refers to the tax year between July 1 to June 30 of the following year. This is the fiscal year between which the income earned through business and salary is counted.
On the other hand, the assessment year refers to the part of the year when the tax returns are assessed. For example, the tax return for the fiscal year of 2023-2024 (01-07-2023 to 30-06-2024) has the assessment year of 2024-2025. This is when the NBR reviews the tax forms and calculates the deductibles and liabilities. They also help taxpayers clear their taxes and claim refunds.
How Can I Submit My Tax Return in Bangladesh?
For beginners, the process of submitting a tax return may be overwhelming. But it is just an hour’s work if anyone knows the nitty-gritty. Following the below steps can ease all the hassles.
- Get a TIN certificate and register to the E-Return system
- Log in to the system and provide personal information
- Provide tax assessment information and income details
- Give details of the additional income source, if any
- Attach the documents proving investments and assets
- Review and submit the form
This is the inside-out of everything that needs to be completed to submit the tax return. If you’re still confused, click here and learn in-depth about how to fill up tax return in Bangladesh.
Final Words
Income tax return is the mandatory tax form that every taxpayer must declare. It is used to declare income, assets, and investments. To do this, there are several documents required including personal information, employment details, and investment information. These are also applicable for the taxpayers who own any business or property.
Ultimately, all this needs to be submitted by the 30th of November of the tax year. Just by following the proper steps, anyone can get the tax return certificate in no time.
