Submit Income Tax Return – In Bangladesh, the financial year closes at the end of June each year. We have already concluded the financial year 2023. With the close of the financial year, inquiries have arisen from all quarters regarding the deadline for submitting income tax returns for the year 2023. This question carries added significance due to the recent passage of new tax law in Bangladesh. Today, we will delve into the timeline for tax return submissions in detail.
For which period should income tax return be submitted in 2023?
As discussed earlier, the Bangladeshi government follows a financial year that spans from July to June. Consequently, Bangladesh’s budget is presented in Parliament every June. The government collects taxes from taxpayers based on the financial year, which runs from July to June. From a tax perspective, this financial year is referred to as an income year.
For the year 2023, individuals are required to file their income tax returns for the income they earned during the period from July 1, 2022, to June 30, 2023.
However, what if an individual’s income begins midway through the financial year, for instance, if they started employment in November 2022? In such a case, the income from employment will only be considered from the month of November onwards, while the income year for tax purposes will still cover the entire period from July 1, 2022, to June 30, 2023.
Who is required to submit income tax retrun
An assessee is required to submit their income tax return in accordance with Section 166 of the Income Tax Act 2023. If an individual has income exceeding the tax-free threshold or is mandated to provide Proof of Submission of Return (PSR), they are obligated to file their income tax returns. If you wish to know who must file an income tax return, please click on the link below:
Who is required to file income tax return in Bangladesh in 2023-2024
Deadline to Submit Income Tax Return
As taxpayers, we all should know the deadline for tax return submission. The timeline for filing tax returns is stipulated in Section 171 of the Income Tax Act 2023. According to Section 171, every assessee must submit their income tax returns on or before the Tax Day. In other words, all of us are required to file our returns on or before the specified Tax Day.
What is Tax Day?
(a) In case of Old Assessee
The definition of Tax Day is provided in sub-section 23 of Section 2 of ITA 2023. According to clause (ক) of section 2(23), for individual assessee, Tax Day falls on 30th November.
Based on the aforementioned section, our conclusion is that an individual, if he/ she is an Old Assessee (i.e. he/ she filed tax returns before), must submit their income tax return no later than 30th November. For the year 2023, tax returns must be filed by 30th November 2023.
(b) In case of New Assessee going to submit his very first tax returns
According to clause (গ) of section 2(23), for an individual assessee who has not previously filed income tax returns, the Tax Day is set at 30th June.
In other words, if you are a new assessee planning to submit your first income tax return this year, you have some additional time. There’s no need to rush; take the necessary time to gather all the required documents to accompany your returns, as you can file your tax returns on or before 30th June 2024.
Can the return be submitted after Tax Day?
Yes, you can submit your income tax return after the Tax Day. On 13th August 2023, the National Board of Revenue (NBR) issued an explanation in response to a report published in the Daily Prothom Alo newspaper regarding delayed submission of tax returns.
According to the NBR’s explanation (vide reference no. ০৮.০১.০০০০.০১.০৫.২০১৬.১৫, dated 13th August 2023), returns can indeed be submitted after the Tax Day. For Old Assessees, returns can be submitted after 30th November 2023, and for New Assessees, it can be submitted after 30th June 2024.
What is the implication if Tax Return submitted after Tax Day?
Section 174 of ITA 2023, outlined the process of determining tax payable where income tax returns are submitted after Tax Day.
As per Section 174 of ITA 2023, Tax will be determined by using below formula:
C = A × (1 + 0.04 × B)
Where,
C = Tax Payable when an assessee files income tax returns after the Tax Day
A = Tax payment if the assessee files their income tax returns within the Tax Day, but in this scenario, any tax exemption, if applicable, shall not be allowed. Moreover, investment tax rebates will not be allowed.
B = Number of months within which return has been submitted.
Based on the above, if an individual files income tax returns after the Tax Day, they will be subject to a 4% higher tax rate. Additionally, any tax exemptions and investment tax rebate will also be forfeited. Therefore, it is advisable not to choose to submit income tax returns after the Tax Day and always aim to file tax returns within the specified deadline.
Conclusion - Submit Income Tax Return
An assessee is required to file an income tax return within tax day. Please note tax day is different for an individual and an entity. In case anyone filed tax return after tax day is obliged to pay tax under Section 174 of Income Tax Act 2023.
Submit Income Tax Return - Source/ Reference:
- Section 166 – Filling of return
- Section 171 – Time of filling return
- Section 2(23) – Definition of “Tax Day”
- Section 174 – Computation of Tax in case of filing return after Tax Day.
- Section 76(5)(ক) – Tax Exemption not allowable
- NBR Explanation No. 08.01.0000.01.05.2016.15, dated 13 August 2023.
- National Board of Revenue (NBR).
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