Income Tax at a Glance Among direct taxes, income tax is the main source of revenue. It is a progressive tax system. Income tax is imposed on the basis of ability to pay. The more a taxpayer earns the more he should pay is the basic principle of charging income tax. It aims at ensuring equity and social justice. In Bangladesh, income tax is being administered under the tax legislation named “THE INCOME TAX ORDINANCE, 1984 (XXXVI OF 1984) an INCOME TAX RULES, 1984.”

(4) Tax Rate:

Other than Company: For individuals other than female taxpayers, senior taxpayers of 65 years and above, retarded taxpayers and gazette war-wounded freedom fighter, income tax is payable for the

For female taxpayers, senior taxpayers of age 65 years and above, income tax is payable for the

For Company:

If any non-publicly traded company transfers a minimum of 20% shares of its paid-up capital through IPO (Initial Public Offering) it would get 10% rebate on total tax in the year of transfer.

(5) Tax Rebate for investment: [Section 44(2)/only allowable for Resident/Non-Resident Bangladeshi]

(a) Rate of Rebate:

The amount of allowable investment is – actual investment or 25% of the total (taxable) income or Tk. 1,50,00,000/- whichever is less. The tax rebate amounts to 15% of the allowable investment.

Types of investment qualified for the tax rebate are:-

(6) Who should submit Income Tax Return?

If the total income of any individual other than female taxpayers, senior male taxpayers of 65 years and above, retarded taxpayers and war-wounded gazette freedom fighter during the income year exceeds Tk 3,50,000/-. If the total income of any female taxpayer, the senior male taxpayer of 65 years and above during the income year exceeds Tk 4,00,000/-.

(7) Time to submit Income Tax Return: [Section 75(2) of the Ordinance]

(8) Submission of withholding tax return and time to submit:

Person who makes any TDS (Tax deduction at source) on payment, must file a separate return of withholding tax under section 75A of the Ordinance.

15th day of October, January, April, and July. Or extended date up to 15 days by DCT. Statement of TDS, Copy of Treasury challan /pay-orders should be submitted with the return.

(9) Consequences of Non-Submission of Return and Return of withholding tax. (Section 124 of the Ordinance):

The imposition of penalty amounting to 10% of tax on last assessed income subject to a minimum of Tk. 1,000/-

(10) Consequences of using fake TIN:

DCT can impose a penalty not exceeding TK.20,000/-

For continuous use of fake TIN deliberately- 3 years imprisonment, up to TK. 50,000/- fine or both.

(11) Assessment Procedures:

For a return submitted under the normal scheme, assessment is made after giving an opportunity of hearing.

For returns submitted under Universal Self-Assessment Scheme, the acknowledgment slip is considered to be an assessment order of the Deputy Commissioner of Taxes. Universal Self-Assessment may be subject to “process and audit”.

Provided that a return of income filed under universal self-assessment scheme, shall not be selected for audit where such return shows at least twenty percent higher income than the income assessed or shown in the return of the immediately preceding assessment year and such return-

(12) An appeal against the order of DCT: (Under section 153 & 158 of the Ordinance)

A taxpayer can file an appeal against DCT’s order to the Commissioner (Appeals)/ Additional or Joint Commissioner of Taxes (Appeals) and to the Taxes Appellate Tribunal against an Appeal order.

(13) Tax withholding functions:

In Bangladesh withholding taxes are usually termed as a Tax deduction and collection at source. Under this system, both private and public limited companies or any other organization specified by law are legally authorized and bound to withhold taxes at some point in making payment and deposit the same to the Government Exchequer. The taxpayer receives a certificate from the withholding authority and gets credits of tax against assessed tax on the basis of such a certificate.