Income Tax Return System in Bangladesh

Income Tax Return System in Bangladesh

The Income Tax Return (ITR) is a mandatory declaration of income, expenses, and taxes payable by individuals and entities under the tax laws of Bangladesh. The return must be filed annually with the National Board of Revenue (NBR), the central authority responsible for tax administration.

Governing Laws and Authorities

• Income Tax Act, 2023
• Finance Act (updated annually)
• National Board of Revenue (NBR) – www.nbr.gov.bd

The Income Tax Act, 2023 replaced the previous Income Tax Ordinance, 1984 and modernized the legal framework for tax assessment and compliance.

Who Must File Income Tax Returns?

Under the Income Tax Act, the following persons are required to file a return:

Individuals:

• Resident Bangladeshi with total income exceeding the tax-free threshold (currently BDT 3.5–4.5 lakh depending on category)
• Any person holding:
  • TIN certificate
  • Trade license
  • Motor vehicle
  • Membership of a club registered under VAT law
  • Credit card
  • Registered land ownership in city corporations
• Directors or shareholders of companies
• Non-residents with Bangladesh-source income

Entities:

• Companies (Private and Public)
• Partnership firms
• NGOs and cooperative societies
• Branches of foreign companies
• Trusts and associations

Types of Taxpayers and Applicable Forms

Taxpayer Type	Return Form (2023)
Individual (Resident)	Form ITR-1
Individual (Non-resident)	Form ITR-2
Firm/Partnership	Form ITR-3
Company	Form ITR-4
NGO/Trust/Other	Form ITR-5

Income Year and Assessment Year

• Income Year: July 1 to June 30 (financial year in which income is earned)
• Assessment Year: The year following the income year, during which tax return is assessed

Example: Income earned during July 2023–June 2024 is assessed in AY 2024–2025

How to File Income Tax Return

1. Obtain a TIN

• Apply online at https://etaxnbr.gov.bd
• Required for most types of filings

2. Calculate Total Income

Include income from all sources:

• Salary
• Business or profession
• Rent and property
• Capital gains
• Investments, interest, or dividends

3. Apply Deductions and Tax Rebates

Eligible deductions:

• Investment allowance
• Zakat or donation to approved funds
• Provident fund and insurance contributions

4. Determine Tax Payable

Use the slab rates applicable to the taxpayer’s category. For example, for AY 2024–25:

Individuals (Male/General):

• First BDT 3.5 lakh – Nil
• Next BDT 1 lakh – 5%
• Next BDT 3 lakh – 10%
• Then 15%, 20%, and 25% progressively

5. Pay Tax and Obtain Challan

• Taxes must be paid using Treasury Challan through Sonali Bank or online payment portals (A-Challan)
• Advance Tax or Tax Deducted at Source (TDS) is adjusted

6. File the Return

Returns can be filed:

• Physically at the tax circle office
• Online via the NBR e-return portal: https://etaxnbr.gov.bd

Upload required documents:

• Salary certificate
• Bank statements
• Property documents
• Investment proofs
• Challan receipts

Tax Return Filing Deadlines

• Individuals and non-audited firms: 30 November of the assessment year
• Companies and audited firms: Within 6 months of income year end (extendable on request)

Failure to file by the deadline may result in:

• Penalties and interest
• Disqualification from government tenders or services
• Restrictions on credit and licenses

Proof of Filing – Acknowledgment & Tax Certificate

Upon successful filing:

• Taxpayer receives Acknowledgment Receipt
• Can download Tax Clearance Certificate from the portal
• Required for:
  • Government job applications
  • Loan and credit card applications
  • Trade license renewals
  • Visa applications in some jurisdictions

Penalties for Non-Compliance

Offence	Penalty
Failure to file return	Up to BDT 5,000 or more
Filing false return	Fine plus imprisonment up to 1 year
Concealment of income	50% of tax evaded
Not maintaining books of account	Fine up to BDT 5,000