Preparation of return of income

for individual taxpayers

Learning by doing
Presentation outline
 A few words on taxation

 Orientation with return of income for individual taxpayers

 Understanding the case

 Understanding the tasks

 Learning by doing
On taxation
 In this world nothing is certain but death and taxes—Benjamin Franklin

 Taxes are the cost of the public goods (such as defense, health, education,
infrastructure) and economic wellbeing (such as regulating the use of natural
resources)

 Social contract, fiduciary role of the state

 Graduation to MIC-SDG-DRM
On taxation

 From era enforcement of enforcement to era of transformation,

horizontalization

 Digital-NPM-Weberian Scenario

 Fundamentals of a tax system: efficiency, equity

On taxation

 Efficiency: low cost, small deadweight loss, small administrative burden

 Equity/fairness: benefits principle, ability-to-pay principle (vertical

equity/progressivity: earn more, pay more; horizontal equity: broader base)

 Tax policy: a trade off between equity and efficiency

What is a return of income
 A return of income (IT-11 GA) is a
statement of income & tax, assets &
liabilities, and lifestyle expenditure of a
taxpayer for an income year (starting
from July 1 and ending on June 30).
Who to submit a return of income

 All TIN holders must submit a return of income at the end of each
income year.

 A TIN holder taking TIN solely for the purpose of selling land and
having any non-taxable income, and a TIN holder taking TIN solely
for the purpose of taking a credit card and having income below
taxability are exempted from submitting a return of income.
When to submit a return of income

 A return of income is to be submitted at the end of each income

year.
 Return to be submitted between July 01 and Nov 30 following the
income year.
 NBR can extend the time of return submission through an official
order.
 DCT can extend the time for up to two months, and IJCT for
another two months upon submission of petition in the prescribed
format.
Consequences of failure to submit a return
of income
 Interest @ 2% per month shall be added to the payable amount of tax at the
time of return submission in case of extending time for submitting return.
 A taxpayer failing to file return may be imposed a penalty of ten percent of
tax imposed on last assessed income (minimum taka one thousand) and
additional taka fifty per day on a continuing default, or
 Fifty percent of the tax payable on the last assessed income or taka one
thousand, whichever is higher.
 If income is not assessed previously, amount of penalty shall not exceed
taka five thousand.
Different types of return of income for
individual taxpayers
 IT-11GA: eight page return (old version, not yet defunct)
 IT-11 GA 2016: twelve page return, latest and detailed,
online submission version
 IT-GHA 2020: one page return, for taxpayers having
taxable income and gross wealth not exceeding Tk
4,00,000 and Tk 40,00,000 respectively
 IT-11UMA: two page return, only for salaried individuals
What constitutes a return of income
IT-11GA 2016
 Part I: Cover page (basic info)

 Part II: Particulars of Income and Tax

Schedule 24A for salary income
Schedule 24B for income from house property
Schedule 24C for income from business or profession
Schedule 24D for tax rebate and credit
Statement of Assets & Liabilities (IT-10B2016)
Schedule 25 for statement of assets & liabilities
Statement of Lifestyle Expenses (IT-10BB2016)
What constitutes a return of income
IT-11GA 2016
 Part III: Instruction, Enclosures and
Verification

Acknowledgement Receipt
Learning by doing

 Filling up return of income of an individual

taxpayer earning government salary and also
having income from some other heads.
Learning by doing: the case
Income:
 Sources of income: govt salary, house property, agriculture, income from other sources (dividend,
bank interest, sanchaypatra interest, honorarium), share trading and fisheries
 Income from salary: Basic Tk 6,00,000 per annum, bonus tk 1,00,000, HR Tk 3,00,000, Transport Tk
18000, Medical Tk 18000, Telephone Tk 24000, Mobile Tk 12000, Baiskakhi allowance Tk 10,000,
RR Leave Tk 50,000, deduction for tax Tk 24000, contribution to PF Tk 120000
 Income from HP: owns a six-storied single unit residential building, one floor self-occupied, other
one 5 floors are rented, annual rent Tk 7,20,000, City Corporation Tax Tk 25000
 Income from agriculture: Tk 40,000 (net)
 Income from other sources: dividend Tk 60000, bank interest Tk 5000, sanchaypatra interest Tk
1,00,000, meeting and guest lecture honorarium Tk 25000
 Income from share trading: Tk 1,50,000
 Income from fisheries Tk 2,00,000 (net)
Learning by doing: the case

Asset
 Has a net asset worth Tk 3,25,00,000: building Tk 2,65,00,000 BF, 5 acres of cultivable
land and pond Tk 1000000 BF, sanchaypatra Tk 1000000, life insurance Tk 5,00,000, one
1500 CC car Tk 2500000 BF, furniture & electronic goods Tk 500000 BF, Jewellery 10
tola gold Tk 250000 BF, cash at bank Tk 50000, cash in hand Tk 200000, Liabilities 0
 Net asset value for previous year Tk 3,11,73,000
Investment:
 Invested Tk 500000 to purchase sanchayptra, Contributed Tk 1,20,000 to GPF, LIP paid Tk
60000
Learning by doing: the case

Lifestyle expenses
 Food, clothing and other essentials: Tk 120000, Transportation Tk 240000, HP maintenance Tk 11000, Maid & Security
120000, Electricity Tk 18000, Gas Tk 13000, Water Tk 4000, Telephone Tk 6000, Education for children Tk 60000,
Contribution to GPF Tk 120000, Festival and other special expenses including medical Tk 60000, LIP Tk 60,000, Advance
tax (car) Tk 15000, advance tax (salary) Tk 24000, source tax (sanchaypatra) Tk 10000, source tax (bank interest) Tk 500,
source tax (dividend) Tk 6000, source tax (meeting fee/honorarium) Tk 2500, tax paid with last return Tk 10000
Delay interest
 Took time extension for two months and submitted return on 16/01/2022
Advance tax/source tax
 Salary Tk 24,000, Car Tk 15000, Dividend Tk 6000, Bank Int Tk 500, Honorarium Tk 2500,
Sanchaypatra Tk 10000
Surcharge
 Net wealth exceeds Tk 3 cr
Learning by doing: the tasks
 Task 1: Providing basic information
 Task 2: Preparing the schedules according to heads of income
 Task 3: Calculating taxable and tax exempted income
 Task 4: Calculating tax (gross, rebate, net, surcharge, TDS, AIT, tax with return, interest
etc.)
 Task 5: Filling up the statements of assets & liabilities, and lifestyle expenditure
 Task 6: Filling up the verification & enclosure part
 Task 7: Filling up the acknowledgement part
Task 1

 Providing basic information

Task 2 & 3

 Preparing the schedules

according to heads of income
 Calculating taxable and non-
taxable income
Task 2 & 3: Income from salary: govt
employee
 Basic salary: taxable
 Festival bonus: taxable
 Any other bonus called by whatever name: taxable
 House rent allowance: tax exempted
 Medical allowance: tax exempted
 Transport allowance: tax exempted
 Rest and recreation allowance: tax exempted
 Bangla new year allowance: tax exempted
 Any other allowance or benefit provided: tax exempted
 Lump grant: tax exempted
Task 2 & 3: Income from house property

 HP income is the annual value deriving from letting out of the property both for
commercial and residential purposes.
 House property income is to be proportionate to the share of the owner in that property.
 Portion of the property used or occupied by the owner for his personal, or business or
professional purposes is exempt from calculation of income.
 If monthly rent exceeds Tk 25000, transaction is to be made through banking channel and
a register is to be maintained.
 Vacancy related information should be communicated to the concerned Circle Officer
(DCT) immediately after it so takes place.
Task 2 & 3: Income from house property

 Annual value of the property

 Less: Land development tax/annual charge/rent/any other levy to be paid to the
government or the local government(except income tax)
 Less: Premium payment against insurance of the property
 Less: Interest against any mortgage or borrowed capital to construct, reconstruct,
renovate, repair the property
 Less: Allowance for maintenance and provision of basic services (25% for residential and
30% for commercial use)
 Less: Vacancy allowance
 Net taxable income from house property according to ownership ratio
Task 2 & 3: Income from agriculture

 Income deriving from use of any land by means of agriculture, basic processing of
agricultural produce or granting any person the right to use the land for any period is
termed as agricultural income.

 Proceeds from sale of agricultural produce at market value

Less: 60% of the value as expenses
Net taxable agricultural income

 Note: Agricultural income deriving from arrangements like adhi, bhag, barga is
considered as net taxable agricultural income.
Task 2 & 3: Income from other source

 Dividend [up to Tk 50000 is exempt from taxation]

 Interest
 Royalty, fees for technical services
 Letting of machinery, plants and appurtenant inseparable building
 Unexplainable/concealed deposit, asset, investment, expenditure
 Salami or premia received from any lease
 Goodwill money/compensation/damage/agreement cancellation/termination money
received
 Benefit from cancellation of indebtedness
Task 2 & 3: Income from other source

 Winning from lottery/games

 Individual not receiving loan or gift exceeding Tk 5 lac through
banking/formal channel
 So much of the difference of income subject to tax exemption or tax
at a reduced rate between the revised/amended return and the
original return
 Any other income not defined
Task 2 & 3: Special tax treatment for certain
income
 Income arising for an individual from trading on securities in the Stock Exchange: exempt
from taxation through an SRO
 Sanchaypatra interest: source tax to be charged @10%, final settlement
 Income from dairy farm: tax @ 5% on income up to taka 10 lac, 10% on next slab of
income up to taka 20 lac, 15% on rest of the income
 Income from poultry farm: no tax for income up to taka 20 lac, tax @ 5% on next slab of
income up to taka 10 lac, 10% on rest of the income
 Income from fishery: no tax for income up to taka 10 lac, tax @ 5% on next slab of income
up to taka 10 lac, 10% on next slab up to taka 10 lac, 15% on rest of the amount
Task 2 & 3: Preparing the schedules

 Schedule for salary income

 Schedule for HP income
 Schedule for investment rebate
Task 4: Calculation of tax

 Calculating tax (gross, rebate, net, surcharge,

TDS, AIT, tax with return, delay interest)
Task 4: Tax exemption ceiling

Male taxpayers below the age of 65 Tk 3,00,000

Male taxpayers above the age of 65 Tk 3,50,000
Female taxpayers Tk 3,50,000
Physically challenged individuals Tk 4,50,000
Wounded freedom fighters Tk 4,75,000
Any one of the parents/guardian of a physically challenged
person[additional] Tk 50,000
Individual having income from agriculture alone [additional] Tk. 2,00,000
Task 4: Rate of tax for individual
taxpayers
Income Rate Tax payable (Tk)

Tk 3,00,000 0% 0
Tax exempted
Next Tk 1,00,000 5% Tk 5,000

Next Tk 3,00,000 10% Tk 30,000

Next Tk 4,00,000 15% Tk 60,000

Next Tk 5,00,000 20% Tk 1,00,000

Rest of the income 25% ------

Task 4: Investment ceiling for rebate

Actual investment
or
25% of taxable income [excluding income liable for minimum tax (u/s 82C),
tax-free income and income on which reduced/special tax rate applies]
or
Tk 1,00,00,000
Whichever is lower
Task 4: Eligible investments for rebate

 DPS up to 60,000 per annum in any bank or financial institution

 Life insurance premium
 Contribution to recognized provident fund
 Contribution to group insurance and welfare fund
 Investment in sanchaypatra
 Investment for buying shares, stocks, mutual fund of companies listed in
the stock exchange
 Charitable contribution to organizations approved by the competent
authority of the government
Task 4: Rate of rebate
 For total income up to Tk 15,00,000 [total income includes tax-free
income, income liable for minimum tax (u/s 82C) and income for which
reduced or special rate of tax rate applies]: @ 15% on allowable amount
of investment

 For total income exceeding Tk 15,00,000: @ 10% on allowable amount

of investment
Task 4: Surcharge on net tax payable
Net asset worth Rate of surcharge
Up to Tk 3,00,00,000 [except for those who 0%
own a house property within a city
corporation the plinth area of which exceeds
8,000 square feet, and/or individuals who own
more than one motor vehicle]

From Tk 3,00,00,001 to Tk 10,00,00,000 10%

From Tk 10,00,00,001to Tk 20,00,00,000 20%
From Tk 20,00,00,001 to Tk 50,00,00,000 30%
Up to Tk 50,00,00,000 35%
Manufacturer of tobacco products Additional 2.5% surcharge on income derived
from such trade
Task 4: Giving credit

 Advance tax

 Source tax

 Arriving at net tax payable with return

Task 4: Delay interest for not filing
return on or before the Tax Day
 Applies in case of failing to file a return of income on or before the
Tax Day

 Rate of delay interest is @ 2% per month

 On the difference between the assessed tax on total income for the
assessment year and the tax paid in advance for the assessment year
including the tax deducted or collected at source
Task 4: Minimum tax for individual
taxpayers
Area/locality Minimum tax

Dhaka/CTG City Corporation Tk 5,000

Other City Corporations Tk 4,000

Other areas Tk 3,000

Advance tax on vehicles

Vehicle Type Advance Tax

Up to 1500 CC Tk 25,000
From 1501 to 2000 CC Tk 50,000
From 2001 to 2500 CC Tk 75,000
From 2501 to 3000 Tk 1,25,000
From 3001 to 3500 CC Tk 1,50,000
3500 CC Plus Tk 2,00,000
Microbus Tk 30,000
Task 5

 Filling up the statement of lifestyle

expenditure

 Filling up the statement of assets &

liabilities, Schedule 25
Task 6

 Filling up the verification and enclosure part

Task 7
 Filling up the acknowledgement part
 We’re done!
 Thank You
 Q/A