Tax Overview

Income Tax at a Glance Among direct taxes, income tax is the main source of revenue. It is a progressive tax system. Income tax is imposed on the basis of ability to pay. The more a taxpayer earns the more he should pay is the basic principle of charging income tax. It aims at ensuring equity and social justice. In Bangladesh, income tax is being administered under the tax legislation named “THE INCOME TAX ORDINANCE, 1984 (XXXVI OF 1984) an INCOME TAX RULES, 1984.”

Income Tax Authorities: (Section 3 of the Ordinance)

The National Board of Revenue;
Chief Commissioner of Income Tax;
Directors-General of Inspection (Taxes);
Commissioner of Income Tax(Appeals);
Commissioner of Taxes (Large Taxpayer Unit);
Director General (Training);
Director-General, Central Intelligence Cell;
Commissioners of Income Tax;
Additional Commissioners of Income Tax(Appeal/Inspecting);
Joint Commissioners of Income Tax(Appeal/Inspecting);
Deputy Commissioners of Income Tax;
Tax recovery officers;
Assistant Commissioners of Income Tax;
Extra Assistant Commissioners of Taxes; and
Inspectors of Taxes.

Heads of Income: For the purpose of computation of total income and charging tax thereon, sources of income can be classified into 7 categories, which are as follows :

Salaries.
Interest on securities.
Income from house property.
Agricultural Income.
Income from business or profession.
Capital gains.
Income from other sources.

Rate of Rebate:

The amount of allowable investment is – actual investment or 25% of the total (taxable) income or Tk. 1,50,00,000/- whichever is less. The tax rebate amounts to 15% of the allowable investment.

Types of investment qualified for the tax rebate are:-

Life insurance premiums up to 10% of the face value.
Contribution to Provident Fund to which Provident Fund Act, 1925 applies.
Self contribution and employer’s contribution to the Recognized Provident Fund.
Contribution to Superannuation Fund.
Contribution up to TK 60,000 to deposit pension scheme sponsored by any scheduled bank or a financial institution.
Investment in an approved debenture or debenture stock, Stocks, or Shares.
Contribution to Benevolent Fund and Group Insurance premium.
Contribution to Zakat Fund.
Donation to a charitable hospital approved by the National Board of Revenue.
Donation to philanthropic or educational institution approved by the Government.
Donation to socio-economic or cultural development institution established in Bangladesh by Aga Khan Development Network.
Donation to ICDDRB.
Donation to philanthropic institution-CRP, Savar, Dhaka.
A donation up to tk. 5 lac to (1) Shishu Swasthya Foundation Hospital, Mirpur, Shishu Hospital, Jessore and Hospital for Sick Children, Sathkhira run by Shishu Swasthya Foundation, Dhaka. (2) Diganta Memorial Cancer Hospital, Dhaka. (3) The ENT and Head-Neck Cancer Foundation of Bangladesh, Dhaka and (4) Jatiya Protibandhi Unnayan Foundation, Mirpur, Dhaka.
Donation to Dhaka Ahsania Mission Cancer Hospital.
Donation to Sylhet Diabetic Samity, Islamia Eye Hospital and MA Ispahani Institute of Opthalmology, Kidney Foundation, and National Heart Foundation of Bangladesh.
Donation to Asiatic Society of Bangladesh.

Donation to Muktijodha Jaguar.

Who should submit Income Tax Return?

If the total income of any individual other than female taxpayers, senior male taxpayers of 65 years and above, retarded taxpayers and war-wounded gazetted freedom fighter during the income year exceeds Tk 2,50,000/-. If the total income of any female taxpayer, the senior male taxpayer of 65 years and above during the income year exceeds Tk 3,00,000/-.

If total income of any retarded taxpayer during the income year exceeds TK. 3,75,000.
If the total income of any gazetted war-wounded freedom fighter taxpayer during the income year exceeds Tk. 4,25.000/-.
If any person was assessed for tax during any of the 3 years immediately preceding the income year.
A person who lives in any city corporation/paurashava/divisional HQ/district HQ and owns a motor car/owns membership of a club registered under VAT Law.
If any person runs a business or profession having a trade license and operates a bank account.
any professional registered as a doctor, lawyer, income tax practitioner, Chartered Accountant, Cost
& Management Accountant, Engineer, Architect, and Surveyor, etc.
Member of a Chamber of Commerce and Industries or a trade Association.
Any person who participates in a tender.
Candidate for Paurashava, City Corporation, Upazilla, or Parliament elections.
Any company registered under the Company Act, 1913 or 1994.
Any Non-government organization (NGO) registered with NGO Affairs Bureau.

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Tax Overview

Income Tax Authorities: (Section 3 of the Ordinance)

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