Are you ready to submit return of income to NBR in Bangladesh for the income year 2020-21? Do you know what documents require with return of income?
Income, expenses, assets and liabilities related documents are required to prepare tax return and then filing tax return to the tax circle.
From July 2020, submission of return of income has been started and it will continue till tax day i.e. 30 November 2020 except some exceptions.
You are thinking oh! There is a long way ahead. No tension.
But there is a lot of work to do before submission of return of income.
If you are a new taxpayer in this year then you have to do more work for the first time and it will take more time to arrange all the necessary procedures related with submission of return to NBR.
People sometimes confused as to whether they are eligible for the tax payment.
And they do not know who require to obtain TIN certificate and some are confused they have TIN certificate but whether they have to file return of income.
Somehow they may know that yes they have to collect TIN certificate as well as have to submit return of income to the NBR.
But don’t know how to calculate total taxable income. So all these workings have to be completed before your deadline i.e. 30 November 2020.
After completion of all the above procedures you have to collect all related supporting documents against your income and investment allowance on which you have claimed tax rebate.
So what are those documents?
The taxpayer who are submitting return of income regularly they are aware all about the procedures for filling return of income. But sometimes memory denies.
You will get all the information from here what types of documents require with return of income that have to be collected before submitting it to the NBR.
So let’s start!
Salary certificate from employer
The taxpayer whose income derived from salary have to collect salary certificate from his employer.
The responsible person transferred net salary amount to the employees’ bank account after deduction of tax at source, contribution to provident fund and any other deduction if any.
Area wise total salary received during the income year will be mentioned in your salary certificate. Suppose how much you have received for basic salary, house rent, conveyance, festival bonus and any payment from other areas.
Salary certificate may be issued by HR or responsible person who disburse salary to your bank account. It depends on your company practices. So communicate with respective person or department for salary certificate.
Bank statement to which salary transferred
As per Income Tax Ordinance 1984 all payments above BDT 15,000 should be paid through account payee cheque or bank transfer. So as you are paid more than that ceiling by your employer as monthly salary so it is mandatory to pay your salary through banking channel.
Your all income from salary normally transact though bank so as proof of your income from salary you require to attach your bank statement for the period from July to June of income year.
So you have to approach your bank to collect full income year’s bank statement.
Rent agreement, Bank statement of rent deposit
In case of rental of house property, rental agreement has to be submitted as a proof of advance taken from tenant and contractual monthly rental income.
As per income tax ordinance if monthly income from rental income of house property exceeds BDT 25,000 then the owner has to deposit rental income to the bank account. So as a proof of rental income whole income year bank statement has to be attached with return of income.
Housing loan statement from bank
Normally a land owner takes loan during construction of house property on which amount the owner get benefit for interest payment on loan amount. But to avail this facilities he has income from the house property.
So if any owner has income from house property and the construction of house property is made by availing loan from bank or any financial institution then he has to submit loan statement with his return of income.
Income from house property will reduce by the interest of housing loan. So how much amount is paid in the income year against housing loan which is claimed in return of income have to proof with loan statement.
So the house owner has to collect full income year loan statement from the bank or financial institute from which he has availed housing loan.
Land tax, utility bill
Land tax, utility bill are deductible expenditures from rental income from house property but as a proof of payment you have to attach all those expenditures related documents with your return of income.
If you live in the same house property then the expenditures will be deducted from rental income proportionately.
In that case if you have separate meter for utility bill for tenant then you do not require to do so but in the case of common expenditures then you have to claim expenditures proportionately.
But of course you have to submit all expenditures related documents with return of income against your each claim.
Bank statement for business income
In case of return for any business, bank statements should be included with return of income. Normally, businesses operated financial transactions through bank accounts.
So how much income generated by a business and how much income is reported in the financial statement is possible by reconciling the two documents.
A business may have more than one bank account with different banks. All the bank statements have to be attached with return of income.
A business prepares financial statements at the year end. All financial information for the year is reported in these statements.
What is the revenue or expenditures and what is the taxable profit of the business are reported in the business’s financial statements.
After preparation of financial statements by the management of a business it requires to complete statutory audit by Chartered Accountants firm. And the audited financial statements have to be enclosed with return of income.
The deadline for submission of return of income of a business to NBR is different than with individual taxpayer. So you have to follow the deadline for filing of return of income for business to comply the tax law.
You may buy or sale fixed assets during the income year. You have to maintain those documents to submit to the NBR with your return of income.
In case of any gain from sale of land/flat/car/home then you have to attach deed agreement of such transfer.
Other source of income
Besides the above classes of income you may have income from different sources which normally falls under the other source of income categories.
Suppose, to avail tax rebate you may have investment in shares, debentures, savings instruments etc. and after certain period you may have received dividend or interest from such investment. These incomes are taxable.
As a proof of such income you have to submit dividend certificate or dividend warrant or certificate of interest received on securities or debentures.
Everyone wants to reduce his tax liability. But only legal way to reduce tax liability is investment allowance on which he will get tax rebate. It significantly reduces tax liability.
But to avail the facility of tax rebate one requires to invest in particular sectors which are mentioned in the sixth schedule Part B of Income Tax Ordinance 1984.
You have to submit documents against your investment or donation for which amount you are claiming tax rebate.
When you have invested your money you have get receipt or any documents like in case of investment in listed companies shares you have to submit your BO account statement, bill/cash memo for purchase of computer/laptop, receipt of donation to Zakat fund, DPS statement from your bank or financial institute.
Your salary has been transferred to your bank account after deducting tax at source by the responsible person of your company. Each month a lump sum amount has been deducted from your monthly gross salary.
And all the deducted amount during the year is considered as tax paid to the NBR and when you will calculate your taxable income to find out tax liability then your total tax deducted at source from salary will be deducted from your tax liability.
After the deduction, your net tax liability will be appeared and it will be your final tax liability which will have to be paid to the NBR. The net tax liability may be paid through challan or pay order or bank draft.
During your submission of return of income you have to include this challan or pay order or bank draft with the above documents.
Communicate with the responsible person in the accounts department and asked your tax challan which has been deducted each month from your salary.
So we have discussed most of the documents that will be required during your submission of return of income.
It is better to maintain your personal tax file that will help you to prepare your next year’s return of income if you require any previous year’s information.
Or sometimes, if any dispute arise against you by NBR then your personal file will help you to resolve the dispute or it will help taxman to understand the actual scenario.