I have TIN certificate. Do I require submitting return of income to NBR in Bangladesh?
The most common question we heard every day.
The simple answer is, the Finance Act 2020 has enacted to file return by all the TIN holder except few exceptions.
As per Finance Act 2020, each TIN holder except few exceptions shall submit tax return mandatorily. In section 184A, the person requires to obtain TIN certificate is mentioned in details.
Guess you have read my last article “what to know all about TIN certificate issued by NBR in Bangladesh”.
In that article, you will get the full list that requires to obtain TIN certificate. You will also know, what will be the penalty for the person who will submit fake TIN? And what will be the penalty if the responsible person fails to verify the proof of authenticity of the TIN?
And in section 75, the person who requires to file return of income to NBR in Bangladesh is mentioned in details. We have uploaded a video on this topic in our YouTube channel. You may watch the video here.
In this article you will know about the person who will require to file return of income, the last submission day and penalty to failure to file return of income.
In future, you will also get another two articles about return of income where I will describe how to prepare return of income in one article. And what documents will be required with return of income in another article.
After reading this current article, you will understand that the persons who require to file return of income shall have to obtain TIN certificate but all TIN holder do not require to submit return of income to NBR in Bangladesh.
So now the question is who require to file return of income?
Yes, the answer you will get in the below of this article.
What is the last day to submit return of income?
You know from the last income year the tax day in Bangladesh is observed on 30 November of each Calendar year by the NBR.
If any person fails to file return of income to the NBR without any reasonable cause then the person will be liable for penalty under the income tax ordinance 1984.
Sometimes there may be a reasonable ground to delay in filing return of income.
In that case, the assesse has the option to submit an application to the DCT for extension of the date to file return of income.
After receiving the application from assesse, the DCT may extend the date to file return of income upto two months.
Moreover, the DCT may further extend the date for another two months with the approval from the IJCT.
If an individual being Government official engaged in higher education or training on deputation or leave or employed under lien outside Bangladesh shall file return or returns for the period of such deputation or lien, at a time, within three months from the date of this return to Bangladesh.
When the NBR will issue notice for filing return of income?
If any person requires to submit return of income but not submitted within prescribed time then the DCT will issue a notice to the person for filing return of income within the time set by the DCT.
But the period shall not be less than 21 days. The mention period in the notice may be extended by the DCT.
Sometimes, there may be error or mistakes or missing any information unintentionally during preparation of return of income.
In that case, if any person has already filed a return of income but discovered any omission or in new statement then he may file a revised return of income at any time before the assessment is made by the DCT.
What will be the penalty for failure to file return?
If any person without reasonable case failed to file return of income then the DCT will impose him a penalty amounting to 10% of tax imposed on last assessed income.
But the penalty will not be less than BDT 1,000.
If the person continuously default for filing return of income then a further penalty will be imposed by the DCT of BDT 50 for every day during which the default continues.
Provided that if the individual taxpayer is not assessed previously then such penalty shall not exceed BDT 5,000.
But if any individual assessed previously but failed to submit return then the penalty will be 50% of the tax payable on the last assessed income or BDT 1,000, whichever is higher.
If any person failed to furnish the return of income which he is required to furnish in due time or a notice has been issued to do so but failed then it is a punishable non-compliance by the person.
And the person is guilty of an offence punishable with imprisonment for a term which may extend to one year, or with fine, or with both.
Is there any format to submit return of income?
NBR has the prescribed format for taxpayers where he requires to input his information to file return of income.
Sometimes NBR may notify the manner in the official Gazette how the person shall file the return of income and then such person require to file the return by following the notification.
Following may notify the person by the NBR in official Gazette:
(a) specify that return shall be filed electronically or in any other machine readable or computer readable media;
(b) specify the form and the manner in which such electronic, machine readable or computer readable returns shall be filed.
Is there any exception?
Yes there are few exceptions where a return of income shall not be mandatory in the following cases:
(i) an educational institution receiving government benefits under Monthly Payment Order (MPO); or
(ii) a public university; or
(iii) a fund; or
(iv) any class of persons which the Board, by order in official gazette, exempt from filing the return.
The list of persons require to file return of income
A person shall file a return of income to the DCT of the income year:
(a) if the total income of the person during the income year exceeds the minimum tax threshold under this Ordinance; or
(b) if such person was assessed to tax for any one of the three years immediately preceding that income year; or
(c) if the person is-
(i) a company; or
(ii) a non-government organization registered with NGO Affairs Bureau; or
(iii) a co-operative society; or
(iv) a firm; or
(v) an association of persons; or
(vi) a shareholder director or a shareholder employee of a company; or
(vii) a partner of a firm; or
(viii) an employee of the government or an authority corporation, body or units of the government or formed by any law, order or instrument being in force, if the employee, at any time in the income year, draws a basic salary of BDT 16,000 or more; or
(ix) an employee holding an executive or a management position in a business or profession; or
(d) if the person, not being an institution established solely for charitable purpose or a fund, has an income during the income year which is subject to tax exemption or lower tax rate under section 44; or
(e) if the person, at any time during the relevant income year fulfills any of the following conditions, namely:-
(i) owns a motor car; or
(ii) owns a membership of a club registered under any law governing value added tax; or
(iii) runs any business or profession having trade license from a city corporation, a paurashava or a union parishad; or
(iv) has registered with a recognized professional body as a doctor, dentist, lawyer, chartered accountant, cost and management accountant, engineer, architect or surveyor or any other similar profession; or
(v) has registered with the Board as an income tax practitioner; or
(vi) has a membership of a chamber of commerce and industries or a trade association or body; or
(vii) runs for an office of any paurashava, city corporation, or a Member of Parliament;
(viii) participates in a tender floated by the government, semi-government, autonomous body or a local authority; or
(ix) serves in the board of directors of a company or a group of companies: Provided that any non-resident Bangladeshi may file his return of income along with bank draft equivalent to the tax liability, if any, on the basis of such return, to his nearest Bangladesh mission and the mission will issue a receipt of such return with official seal and send the return to the Board.