Tuesday, October 14, 2014

Income Tax at a Glance 2013-14

Income Tax at a Glance
Among direct taxes, income tax is the main sources 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. 

Income Tax Authorities: 
National Board of Revenue,  Chief Commissioner of taxes, Director General of Inspection (Tax), Commissioner of Taxes (Appeals), Commissioner of Taxes (LTU) Director General (Training), Director General Central Intelligence Cell (CIC), Commissioner of Taxes, Additional Commissioner of Taxes (Appeal/Inspecting), Joint Commissioner of Taxes(Appeal/Inspecting ), Deputy Commissioner of Taxes, Tax recovery officer, Assistant Commissioner of Taxes, Extra Assistant Commissioner of Taxes, Inspectors of Taxes. 

Sources 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 : 

, Interest on securities, Income from house property, Income from agriculture, Income from business or profession, Capital gains, Income from other sources.
Tax Rate (Assessment Year- 2014-15):

     Other than Company : For individuals other than female taxpayers, senior taxpayers of  65 years and above, retarded taxpayers and gazetted war-wounded freedom fighter, income tax payable for the 
            First 2,20,000/- Nil 
Next 3,00,000/- 10% 
Next 4,00,000/- 15%
Next 5,00,000/- 20%
Next 30,00,000/- 25%
Rest  Amount  30%
b   For female taxpayers, senior taxpayers of age 65 years and above, income tax payable for the 
           First 2,75,000/- Nil
           Next 3,00,000/- 10%
           Next 4,00,000/- 15%
           Next 5,00,000/- 20%
           Next 30,00,000/- 25%
          Rest Amount  30%

For retarded taxpayers, tax free income threshold limit is TK.3,50,000 For gazetted war wounded freedom fighters, the threshold limit is Tk. 4,00,000/-
For Individual:
Minimum tax for any individual assessee living in City Corporation area is Tk. 3,000 Minimum tax for any individual assessee living in District headquater is Tk. 2,000
.Minimum tax for any individual assessee living in any other area is Tk. 1,000. Non-resident Individual 30% (other than non-resident Bangladeshi) 

For Companies:
Publicly Traded Company          27.5% 
Non-publicly Traded Company        35%
Bank, Insurance & Financial Company (Except merchant bank) 42.5%
Merchant bank          37.5%
Cigarette manufacturing company                 45%
Publicly traded cigarette company         40%
Mobile Phone Operator Company        45%
Publicly traded mobile company           40%
If any publicly traded company declares more than 30% cash dividend, tax rate would be 24.75% and if declares less than 10% dividend, tax rate would be 35%. If any non publicly traded company transfers minimum of 20% shares of its paid-up capital  through IPO(Initial Public Offering) it would get 10% rebate on total tax in the year of transfer. 
Tax Rebate for investment : 
Rate of Rebate: Amount of allowable investment is - actual investment or 30% of total income or Tk. 150,00,000/- whichever is less. Tax rebate amounts to 15% of allowable investment. 
Types of investment qualified for the tax rebate are :-
Life insurance premium 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 Recognized Provident Fund. Contribution to Supper Annuation Fund. Contribution up to TK 60,000 to deposit pension scheme sponsored by any scheduled bank or a financial institution. Investment in approved debenture or debenture stock, Stocks or Shares Contribution to Benevolent Fund and Group Insurance premium Contribution to Zakat Fund Donation to charitable hospital approved by National Board of Revenue Donation to philanthropic or educational institution approved by the Government Donation to socioeconomic or cultural development institution established in Bangladesh by Aga Khan Development Network Donation to ICDDRB, Donation to philanthropic institution-CRP, Savar, Dhaka Donation up to five 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 Prtibandhi 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 Muktijudha Jadughar Donation to National level institution set up in memory of liberation war; Donation to National level institution set up in memory of Father of the Nation Any investment by an individual in Bangladesh Government Treasury Bond; Investment in purchase of one computer or one laptop by an individual assessee.
Who should submit Income Tax Return? 
If 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 2,20,000/-.     If total income of any female taxpayer, senior male taxpayer of 65 years and above during the income year exceeds Tk 2,75,000/-.
·    If total income of any retarded taxpayer during the income year exceeds TK. 3,50,000. ·   If total income of any gazetted war-wounded freedom fighter taxpayer during the income year exceeds Tk. 4,00.000/-. ·   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 motor car/owns membership of a club registered under VAT Law. If any person runs a business or profession having 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 or Parliament elections.  Any company registered under the  Company Act, 1913 or 1994. Any Non-government organization (NGO) registered with NGO Affairs Burea.

Time to Submit Income Tax Return: 

For Company Taxpayers 

By fifteenth day of July next following the income year or, where the fifteenth day of July falls before the expiry of six months from the end of the income year, before the expiry of such six months. 
For Other Taxpayers
. Unless the date is extended, by the Thirtieth day of September next following the income year. 
Time to submit return of withholding tax 15th  day of October, January, April and July Or extended date up to 15 days by DCT Statement of TDS, Copy of Treasury challan /pay-orders should be submitted with the return Consequences of Non-Submission of Return and Return of withholding tax.  imposition of  penalty amounting to  10% of tax on last assessed income subject to a minimum of Tk. 1,000/-     In case of a continuing default a further penalty of Tk. 50/- for every day of delay. 
Consequences of using fake TIN DCT can impose a penalty not exceeding TK.20,000/- For continuous use of fake TIN deliberately- 3 years imprisonment, up to TK. 50,000/- fine or both. 

                                                                                                     to be contenued......

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