How to Calculate Tax Rebate in Income Tax of Bangladesh

Calculate Tax Rebate in Income Tax of Bangladesh
Calculate Tax Rebate in Income Tax of Bangladesh

Today’s discussion is for those browsing various websites to know about the tax rebate. Follow this article to get correct, updated, and accurate information about the tax rebate.

What is a tax rebate, how is a tax rebate calculated, and how much is a tax rebate, etc.? To answer these questions and find out the amount of tax rebate from your income, follow today’s discussion carefully. I hope today’s discussion will answer all your questions about it.

What is Tax Rebate?

A tax Rebate is a benefit on income tax given by the government, which means the total amount of salary you get in a year, including bonuses and other benefits, then a certain amount of annual tax will come on your total amount; You must file this tax at the end of the year.

But suppose you invest a certain amount from your gross salary somewhere or save in DPS or any such savings account. In that case, you will be given a certain amount of concessional benefits based on that total.

The amount of rebate you will get from this invested money after deducting this amount from your principal annual tax is the amount you will have to pay as tax. And this is the benefit of the tax rebate.

For more details and a complete understanding of these, follow the discussion below with full attention.

Tax Rebate Calculation of Income Tax

Now let’s know about how tax rebate is calculated. If you want to get tax rebate benefits, you must invest a certain amount from the amount you earn annually, including all bonuses and benefits. But how much tax rebate can you invest?

First, the benefit of the tax rebate was 30% of the total income was given to invest. But it was canceled, and the investment amount was reduced to 25%.

However, currently, according to the income tax rules, 20% of total income is allowed to be invested in getting tax rebate benefits. That means you can invest 20% of your total income and get a 15% tax rebate.

Tax Rebate Calculation Rules

Now let’s go to the main point. That is, let us know how to calculate the tax rebate.

If we calculate the tax rebate through an example, it will be much easier to understand, and you will understand very easily. So let us know how tax rebate is calculated through an example.

Think,

  • A person’s monthly income is 50,000 TK
  • Then his total income in 12 months is 600,000 TK
  • Think his annual bonus is 50,000 TK
  • Festival Allowance is 30,000 TK

Then the total annual income is 680,000 Tk

We know,

Normal and in men aged less than 65 years

  • Income up to 3,00,000 TK is exempt from tax
  • Above 3,00,000 up to 100,000 income tax will be paid at 5%
  • Next 3,00,000 income tax is to be paid at 10%
  • Next 4,00,000 income tax is to be paid at 15%
  • 20% income tax on the next 5,00,000
  • He will have to pay a 25% income tax on the excess income

For Ordinary women and men over 65 years of age

  • Income up to 3,50,000 TK is exempt from tax
  • Above 3,50,000 up to 100,000 income tax will be paid at 5%
  • Next 3,00,000 income tax is to be paid at 10%
  • Next 4,00,000 income tax is to be paid at 15%
  • 20% income tax on the next 5,00,000
  • He will have to pay a 25% income tax on the excess income

300,000 Tk will be deducted first tax-free from the person’s total income as per the above conditions. After that, he has to pay tax on the remaining 380,000.

We know,

5% tax on the first 100,000 TK above 300,000 TK
Then the value of 5% on the first 100,000 of 380,000 is 5,000

Remaining (380,000 – 100,000) = 280,000 Tk

We know that the tax on the next 300,000 is 10%.
Then the remaining 280,000 TKs will be 10% tax (280,000 x 10%) = 28,000 TK

Then the total tax payable by the above person is (28,000 + 5,000) = 33,000 TK

 Tax Rebate Calculation and Computation Rules

If he wants to get tax rebate benefits from his total income, he can invest 20% of the total income per the current rules and regulations of Bangladesh.

Then 20% of his total income is 136,000 TK; that is, he can invest this 136,000 taka of his total income.

A tax rebate benefit of 15% will be provided from the money he invests. Then the value of 15% of 136,000 is (136,000 x 15%) = 20,400 TK

Therefore he will get a total tax rebate benefit of 20,400 TK

Then his total income tax was 33,000. Then after deducting the tax rebate benefit of Tk 20,400 from this total tax, the remaining is (33,000 – 20,400) = Tk 12,600

After taking advantage of the tax rebate, he has to pay tax on his total income of only 12,600 TK. Therefore he has to pay tax only 12,600 instead of 33,000 TK. And this is the benefit of the tax rebate.

So this is the discussion regarding the tax rebate. I hope today’s discussion has answered all your tax rebate-related questions.

If you have difficulty understanding while calculating the tax rebate, then you can inform us through the comment box. We will try to answer you as soon as possible. Stay tuned to our website for more various tax-related information. Thank you.