Have a TIN? Get ready to file tax return
Every year, the last week of November sees a mad rush of individual taxpayers at the tax offices and tax fairs. The reason is obvious: the final deadline to file annual income, expenditure and wealth statements without penalty is November 30, termed as Tax Day.
However, one can easily avoid the hassle of hurriedly filing a return as early preparation is the answer. One can furnish his or her tax return much earlier than November as the timeframe for submitting income statements to tax offices begins from July 1 and ends on November 30 every year.
Filing returns after the deadline is possible but with penalty. But who has to file tax returns? Is it only for those whose income crossed Tk 300,000 in the July-June period of fiscal 2020-21?
Not at all.
If you have a Taxpayer Identification Number (TIN) just for a credit card or to sell land but do not have any income at the moment, you are free from submitting tax returns.
Other than this though, if you have a TIN, you need to comply and file tax returns, according to the Income Tax Guidelines 2021-22 for individual taxpayers, released by the National Board of Revenue (NBR) recently.
The tax authority has made the filing of tax returns mandatory for persons in 22 areas, including individuals who have 12-digit TINs.
In addition, people working in the public sector with a basic salary of Tk 16,000 and above will also need to furnish tax returns.
Any individual who is a partner, shareholding director or shareholding employee of a business will also have to file tax returns.
Car owners, holders of trade licences issued by any local government authority, and other professionals will also need to comply with the rules.
Tax return submission is also mandatory for opening savings accounts of over Tk two lakh with the Post Office. Individuals who purchased more than Tk two lakh of national savings certificates will also need to file returns this fiscal year.
In addition, senior citizens, female and transgender taxpayers will have to file a tax return if their income crossed Tk 350,000 in the last income year.
And it is good to prepare for accomplishing the task of tax compliance early, said a senior official of the NBR.
"We have issued guidelines early this year so that taxpayers file returns early and avoid hurrying at the eleventh hour," he said.
As a part of the preparations, a person in general has to collect his or her salary, income or salary certificates, bank statement and statement of investment in savings and other designated instruments, insurance and stocks in order to submit them along with the tax return, he said.
"Without proof of investment, one cannot claim tax rebates," he added.
And one has to file a return in a prescribed form available on the website of the NBR.
Jasim Uddin Rasel, a tax consultant, who runs a blog on tax matters, said, "By paying tax, taxpayers are participating in developing the economy of the country."
There are other benefits too.
Tax clearance certificates are required to get travel visas to many countries or for higher education abroad. As a proof of solvency, along with bank certificates, tax clearance certificates also support the financial stability of the guardian.
But if anyone avoids filing income asset and expenditure statements, there are consequences.
Taxpayers will be liable to pay delay interest of 2 per cent per month on the tax payable starting from the end of Tax Day.
Additionally, the tax authority may impose a penalty of 10 per cent on last year's income but not less than Tk 1,000, and Tk 50 for each day during the period of delay, he added.
However, there is a limit of penalty. In case of a new taxpayer, the amount of penalty shall not be more than Tk 5,000. And in case of a taxpayer who has submitted a return in an earlier year, the penalty shall be higher between 50 per cent of tax payable on last year's income or Tk 1,000, Rasel said.