It can be hard to figure out how to file your income tax in Bangladesh because the rules and laws are always changing. This is especially true in 2024. This article tells you everything you need to know about the Documents for Income Tax you need to file your income tax, so you’ll be ready for tax season.
Understanding Income Tax in Bangladesh
The Income Tax Ordinance of 1984 governs income tax in Bangladesh, with updates over time to reflect shifting economic conditions. Taxpayers are required to file their income tax returns annually, and the process mandates specific documentation to ensure accuracy and compliance with the law.
Who Needs to File Income Tax Returns?
In Bangladesh, every individual or entity earning an income above the tax-free threshold must file income tax returns. This includes:
Individuals: Salaried employees, self-employed individuals, and professionals.
Companies: Corporate entities that generate income.
Partnership Firms: Partnerships engaging in business activities.
Understanding who is obligated to file is crucial for timely compliance and avoiding penalties.
Essential Documents for Income Tax Filing
The following is a detailed list of documents required for income tax filing in Bangladesh for the tax year 2024:
Personal Identification: National ID or passport for personal identification verification.
Income Statements: Salary slips, Form 16 (for salaried individuals), business income records, or bank statements showing income.
Tax Deduction Certificates: Documents showing tax deducted at source (TDS) such as Form 16A (for non-salary income).
Bank Statements: Annual bank statements or bank passbooks to track financial transactions and interest earned.
Investment Proofs: Documents showing investments in tax-saving schemes, mutual funds, fixed deposits, insurance, and other tax-deductible investments.
Rental Income Documents: Lease agreement and rent receipts for any rental properties, if applicable.
Interest Certificates from Banks/Post Office: Interest income from fixed deposits, savings accounts, or post office savings.
Home Loan Certificate: Proof of home loan principal and interest payments, which may be eligible for tax deductions.
Medical and Health Insurance Receipts: Premium payment receipts for health insurance policies to claim deductions under tax law.
Education Loan Documents: Proof of loan interest payments for tax benefits if you have an education loan.
Capital Gains Statements: Records of stock market or real estate transactions that led to capital gains or losses.
Property Tax Receipts: Proof of property tax paid, if applicable.
Donation Receipts: Receipts from donations to approved charities or organizations to claim deductions.
Business Expense Documents: For business owners, proof of expenses such as travel, rent, utilities, and other costs associated with business operations.
Other Deductible Expenses: Receipts for expenses like tuition fees, savings account interest, or any other deductible payments.
Filing Methods in Bangladesh
Here’s a paragraph-per-point summary of the filing methods and deadlines for income tax in Bangladesh:
Online Filing through the NBR Portal: The National Board of Revenue (NBR) has introduced an e-filing system, enabling taxpayers to submit returns electronically. This system allows individuals and businesses to upload necessary documents, submit returns, and make payments online. The online filing option improves efficiency, accessibility, and processing speed.
Manual Filing (Paper Filing): Traditional paper filing remains a widely used method in Bangladesh. Taxpayers can submit their returns manually by completing the required tax forms (like IT-11GA for individuals) and providing relevant supporting documents. These returns are submitted at the tax circle office, which handles tax collection and verification.
Using the Tax Fair: Each year, the NBR organizes a Tax Fair across various locations in Bangladesh to support taxpayers with filing. At the Tax Fair, taxpayers can file returns, seek assistance, and address any questions related to tax preparation. This service is especially helpful for individuals who may need guidance or hands-on help with the filing process.
Tax Advisor Assistance: Many individuals and businesses prefer to file their taxes with the help of tax advisors or certified representatives. Advisors ensure compliance with tax regulations and help taxpayers take advantage of allowable deductions and rebates, which is beneficial in more complex tax situations.
Filing Deadlines in Bangladesh
Annual Income Tax Filing Deadline for Individuals: The deadline for individual tax filings is November 30th each year, known as “Tax Day” in Bangladesh. This applies to salaried individuals, freelancers, and business owners who are required to submit returns within the calendar year to avoid penalties.
Corporate Tax Filing Deadline: Corporate entities have a filing deadline that typically aligns with their financial year. For most companies with a June 30th fiscal year-end, the tax return deadline is December 31st. Corporate tax filings also involve more detailed reports and additional financial disclosures.
Extension Requests: Taxpayers who cannot meet the deadline may apply for an extension by submitting a request to the Deputy Commissioner of Taxes (DCT) at least 15 days before the due date. If approved, this extension grants additional time for filing, though any outstanding taxes are still due by the original deadline.
Penalties for Late Filing: Filing late without an approved extension results in a penalty of BDT 500 per day of delay. Additional penalties may apply based on the tax liability, so timely filing is recommended to avoid unnecessary costs.
Quarterly Advance Tax Payments: Self-employed individuals and businesses with significant tax liabilities may need to make quarterly advance tax payments. These payments are typically scheduled for September, December, March, and June, allowing taxpayers to spread out their tax obligations over the year.
Common Mistakes to Avoid
Incomplete Documentation: Ensure all required documents are compiled before submission.
Incorrect Reporting: Double-check all figures and calculations to avoid discrepancies.
Missing Deadlines: Stay informed about filing deadlines to prevent penalties.
Final thought
Navigating the requirements for income tax filing in Bangladesh can seem overwhelming, but with thorough preparation and the right documentation, taxpayers can ensure compliance and potentially reduce their tax liabilities. Understanding the necessary documents and maintaining organized records throughout the year will facilitate a smoother filing process. For more information on the tax services available, visit ReCom Tax Services
