Author Topic: Income Tax: Pros and Cons  (Read 1409 times)

Offline Shamim Ansary

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Income Tax: Pros and Cons
« on: September 26, 2011, 11:39:12 AM »

Income Tax- What is it?

Among direct taxes, income tax is one of the main sources of revenue. In Bangladesh 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.

All individuals and companies in the country need to pay income tax if their annual income excess certain limit determined by the Government. There are some conditions for paying Income Tax which are controlled by Tax Laws and Amendments in Bangladesh.

Income Tax Return is a structured form where the Tax Payer mentions his/her income and expenditure, resources and credit information to submit them to the Income Tax Office. The form is different for the individual and companies. Tax payers need the Tax Identification Number as well as some endorsed documents (the description of salary, security money, housing property, business, partnership basis income, profit on capital, income tax pay order etc.) to submit the Tax Return Form. The Return Form is available in the website of National Board of Revenue (www.nbr-bd.org) which is downloadable with free of cost. All individual or company can have their Taxpayers Identification Number from respective income tax office.

Each class of tax payer has to submit their return form to the selected income tax circle.  National Board of Revenue of Bangladesh administers the tax system under Internal Resources Division (IRD). The website of NBR provides information about paying income tax including the tax rate.

Who should submit Income Tax Return?

    * If total income of any individual other than female taxpayers, senior taxpayers of 70 years and above and retarded taxpayers during the income year exceeds Tk 1,65,000/-.

    * If total income of any female taxpayer, senior taxpayer of 70 years and above and retarded taxpayer during the income year exceeds Tk 1,80,000/-.

    * If any person was assessed for tax during any of the 3 years immediately preceding the income year.

    * A person who lives in any city corporation/paurashava/divisional HQ/district HQ and owns a building of more than one storey and having plinth area exceeding 1,600 sq. feet/owns motor car/owns membership of a club registered under VAT Law.

    * If any person subscribes a telephone.

    * If any person runs a business or profession having trade license.

    * Any professional registered as doctor, lawyer, income tax practitioner, Chartered Accountant, Cost & Management Accountant, Engineer, Architect and Surveyor etc.

    * Member of a Chamber of Commerce and Industries or a trade Association.

    * Any person who participates in a tender.

    * A person who has a Taxpayer's Identification Number (TIN).

    * Candidate for Union Parishad, Paurashava, City Corporation or Parliament.

Consequences of Non-Submission of Return

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

    * In case of a continuing default a further penalty of Tk. 50/- for every day of delay.

 

                             ** [Source: National Board of Revenue (NBR) , Bangladesh http://www.nbr-bd.org/]
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