How to prepare and file Personal Income Tax Return in Bangladesh: Step-by-Step Guide

Personal Income Tax Return in Bangladesh
Author: Shibli zaman | September 29, 2024

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Filing your estimated income tax return is an essential process to stay compliant with the laws of Bangladesh. For individuals, the fiscal year in Bangladesh runs from July 1 to June 30, and income tax returns are typically submitted by November 30 of the following year. Whether a salaried individual income or a self-employed professional, this guide will help you understand how to fill out and submit your personal income tax return efficiently.

1. Understand Who Needs to File a Personal Tax Return

In Bangladesh, any individual earning an income above the minimum tax-exempt threshold must file an individual income tax return. For the assessment year 2023-2024, the income thresholds are:

  • BDT 350,000 for individuals
  • BDT 400,000 for women and senior citizens (above 65 years)
  • BDT 475,000 for disabled persons
  • BDT 500,000 for freedom fighters

Tax Slabs for the assessment tax year are as follows:

  • For the first BDT 350,000 tax rate is nil
  • For the next BDT 100,000, the tax rate is 5%
  • For the next BDT 400,000, the tax rate is 10%
  • For the next BDT 500,000, the tax rate is 15%
  • For the next BDT 500,000, the tax rate is 20%
  • For the balance amount, the tax rate is 25%

You also need to file if:

  • You have a single Taxpayer Identification Number (TIN).
  • You want to avail tax rebates.
  • You must submit a PSR to 51 types of services mentioned in ITA.

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2. Gather Necessary Documents

Before you start filling out the return, make sure you have the following documents ready:

  • TIN Certificate (Taxpayer Identification Number)
  • National ID Card (NID) for identification
  • Bank Statements for verifying interest income or investments
  • Salary Certificate (if you are a salaried individual)
  • Investment Documents for tax rebates (e.g., life insurance, provident fund, etc.)
  • Previous Year’s Tax Return (if applicable)
  • Utility Bills for tax rebate on housing rent (if applicable)
  • Proof of Payment of TDS and Advance Tax (if applicable)

3. Obtain the Income Tax Return Form

You can download the Income Tax Return Form (IT-11GA) from the official website of the National Board of Revenue (NBR) NBR Portal. Alternatively, you can collect it from your local tax office. Different return tax forms depend on your gross income type, but the most common form for salaried and self-employed individuals is Form IT-11GA.

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4. Fill Out the Income Tax Return Form

Filling out the tax return can seem complex, but here is a simplified breakdown of the key sections:

a. Personal Information

  • Enter your Name, TIN, National ID (NID), Address, and Contact Information.

b. Statement of Total Income 

This section covers all your adjusted gross income sources:

  • Salary: If salaried, enter your total annual salary per your salary certificate. If a person is employed in a non-government service, he/she will be eligible for an exemption of 1/3 of his total payment plan, with a maximum threshold limit of BDT 450,000/-. Government service holders will be tabled only against basic salary and festival bonus paid in a tax year.
  • Income from Business or Profession: If you are self-employed, include your business taxes.
  • Income from House Property: Include rental income if you own any property tax.
  • Income from Other Sources: Any interest income, dividends, or capital gains.

c. Calculation of Taxable Income

  • Deduct applicable allowances such as house rent, medical, or travel allowances from your total income to arrive at Net Taxable Income.

d. Investments for Tax Rebate

  • Fill in the details of your eligible investments (such as life insurance, savings certificates, provident funds, and investment in listed shares) to claim estimated tax rebates. These investments can reduce your taxable income.

e. Total Tax Liability

  • Calculate your total tax payable based on the applicable marginal tax rate.
  • Deduct any advance tax or withholding tax already paid.

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5. Verify and Sign the Form

Once you have filled out the form, carefully review all the entries to ensure accuracy. Any discrepancies could result in delays or penalties. After verification, sign the return form.

6. Submit Your Return

There are two ways to submit your personal income tax return in Bangladesh:

a. Manual Submission

  • Print the completed form and submit it physically to the tax circle office along with the required documents, such as your TIN certificate, investment proofs, bank statements, and salary certificate.

b. Online Submission (E-Filing)

  • Visit the NBR E-filing Portal and register using your TIN and other required details. Once registered, you can submit your return online by uploading the completed form along with any supporting documents.

Both methods will provide you with a submission acknowledgment slip.

7. Obtain the Tax Return Acknowledgment

After submission, you will receive a Tax Return Acknowledgment Slip. Keep this slip safe, as it proves you have filed your tax return for the year. It is crucial for future tax filings and for obtaining tax clearance certificates.

8. Pay the Tax (If Applicable)

Pay the due amount at a designated bank if you owe additional tax after deductions. Collect the tax payment receipt and attach it to your return submission.

9. Important Deadlines

  • Return Filing Deadline: Typically, November 30 each year. However, if you cannot file by the due date, you can request an extension from the NBR, subject to approval.

10. Penalties for Non-Compliance

If you fail to submit your tax return by the deadline or pay any due tax, the NBR may impose penalties and interest on the outstanding amount. Therefore, submitting your return on time is advisable to avoid any fines.

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Conclusion

Filing your personal income tax return in Bangladesh is a legal obligation and a way to ensure that you contribute to the country’s development. Following the steps outlined above can simplify the process and avoid penalties. If you are unsure about any aspect of the tax filing process, consider consulting with a tax professional advisor to ensure accuracy and compliance.

Stay informed, stay compliant, and secure your financial future by submitting your tax returns on time.

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