Income Tax BD: Income Tax Return In Bangladesh

Income Tax BD - Income Tax Return In Bangladesh
Income Tax BD - Income Tax Return In Bangladesh

A citizen of any occupation has to pay income tax at a certain time of the year on a certain income. By paying income tax, the income of those citizens is validated and approved by the government.

Citizens of Bangladesh are also required to pay income tax at a fixed rate on their income at a certain time of the year. But those on tax-free income will not have to pay this tax.

Income Tax in Bangladesh

Income tax in Bangladesh is a type of tax that the government charges on the income earned by individuals and businesses operating in the country. It is collected every year based on the income earned in the previous fiscal year.

The National Board of Revenue is responsible for managing the income tax system in Bangladesh, which falls under the Ministry of Finance.

Income tax is an essential source of revenue for the government, which uses it for public welfare and development projects. A large part of Bangladesh’s revenue comes from this income tax.

Why Pay Income Tax?

The main purpose of paying income tax is to contribute to the government’s revenue and fund public welfare and development projects. The government uses the collected income tax to provide essential services such as healthcare, education, infrastructure, and social welfare programs that benefit the country’s citizens.

Besides, income tax helps maintain economic stability by reducing income inequality and promoting a fair distribution of wealth. By paying income tax, citizens and businesses also fulfill their civic duty to contribute to the betterment of their country.

Penalties and Fines for non-payment of Income Tax in Bangladesh

Non-payment of income tax in Bangladesh has a penalty and fine prescribed by law. If one does not pay income tax, all legally prescribed deportations, charges, and fines of more than lakhs will have to be paid on the property.

Also, the penalty may be paid if the notice is not received or the tax is not paid within the period specified, as may be prescribed by law.

If a valid reason is prescribed, the penalty need not be paid. But if you want to get rid of all kinds of penalties and fines, it is better to pay the income tax, and that must be within the specified period.

Failure to pay income tax can be treated as black money, on which you may have to pay a huge penalty. So considering all these things, paying income tax within the stipulated time is better.

How Much Should Income Tax Be Paid?

The Finance Act 2021 has amended the provisions for tax-exempt payable income tax and levy of surcharge on individual taxpayers, Hindu undivided families, partnership firms, private associations, and artificial persons created by law.

We need to know that income tax does not apply to every citizen. For income tax to be applicable, the citizen has to exceed the tax-free income. He does not have to pay income tax if he is on tax-free income.

The income tax exemption limit varies from person to person. Income tax-exempt income limits for men, women, freedom fighters, disabled, and age vary. Let us know the income tax limits.

  • 300,000 for men below the age of 65 years, 300,000 TK will be considered tax-free. If one earns up to 300,000 in this case, he will not have to pay any income tax.
  • 3,50,000 tax-free income limit for female and male taxpayers aged 65 years or above.
  • The tax-free income limit for those who are disabled is 4,50,000.
  • The income limit of gazetted freedom fighters has been raised to 4,75,000.

Income Tax Rate in Bangladesh

Income tax rates vary from person to person. The income tax rate is not fixed at the same rate for everyone. It works in different ways for different people. They are discussed below.

  • Tax up to 3,00,000 = 0%
  • Tax on the next 100,000 = 5%
  • Tax on the next 300,000 = 10%
  • Tax on the next 400,000 = 15%
  • Tax on the next 500,000 = 20%
  • And the tax over the remaining income = 25%

The minimum tax payable on income above the tax-free limit has been scaled down regionally.

  • Income tax also varies from region to region. The minimum tax for Dhaka North and South City Corporation and Chittagong City Corporation areas is Tk 5000; if the tax rate in those areas is less than Tk 5000, then the tax must be paid at least Tk 5000 in those cases.
  • The minimum tax rate for city corporation areas other than the said city corporation is 4000, and the minimum tax for residents in areas other than the city corporation is 3000.

How to Pay Income Tax Online?

You can pay your income tax online very easily. For this, you have to go to the income tax return website. After that, you have to create an account. After creating this account, you must provide detailed information about your income and cost.

To pay income tax online, you can follow the content below. Here is the full process by which you can pay your income tax.

Income Tax Payment Online

If the amount of income tax payable by a taxpayer having income above the tax-free limit is less than the amount of minimum income tax applicable to him or if the amount of income tax payable is less than or negative of the minimum income tax applicable to him after considering the investment tax rebate, he has to pay the minimum income tax applicable to him.

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