Income Tax Series - 01 (CA Certificate Level)
1. What
is Tax Day?
Tax day is different for
individual and company: Section 2(23)
TAX Day for Individual: Individual assesses are required to pay income tax on their total income and submit their
tax return each year within November 30,
which is also celebrated as Tax Day in Bangladesh.
TAX Day for Other than
Individual: Tax day for a company in
Bangladesh is the 15th day of the seventh month after the income year ends.
Usually this date is 15th January, where the income year for company
ends at 30th June.
N.B: When
this 15th days of 7 month will come before the 15th days
of September. In that case the tax day
will be the 15th day of September following the end of the income year
2. TAX Cycle in Bangladesh
There
are almost 17 steps of TAX cycle in Bangladesh. The steps are as follows:
Step
1: Determination of Income Year & Assessment Year
Step
2: Determination of Residential Status
Step
3: Classification of Income under Different heads according to ITA 2023
Step
4: Exclusion of Income not chargeable to TAX
Step
5: Computation of Income under each head
Step
6: Clubbing of Income of Spouse, Minor child etc.
Step
7: Set-off or Carry forward of losses
Step
8: Computation of Gross Total Income
Step
9: Deductions from Gross total income
Step
10: Deriving at Total Income
Step
11: Application of the rates of Income tax on the total income to compute Gross
Income TAX Liability
Step
12: Deduction of TAX credit/Rebate on Tax Free Income and Investment Allowance
to compute Net Tax Liability
Step
13: Surcharge
Step
14: Computation of Net TAX Liability and Surcharge
Step
15: Adjustment of Advance tax, TDS and Refund
Step
16: Obtaining the TAX Identification Number (TIN)
Step
17: Submission of Income TAX return and payment of TAX.
3. Determination
of Residential Status
According
to Section 2(45) of Income Tax Act-2023, an individual will be a resident in
any income year if he fulfills any of the following two conditions:
·
If
he stays in Bangladesh for a period of at least 183 days or more within that
year. or,
·
For
a period of at least 90 days or more in that year plus 365 days or more during
the 04 (four) years preceding that year.
4. Heads
of Income
There
are main 07 (Seven) heads of Income: (According to Section 30 of ITA 2023)
i.
Income
from Employment (Section 32)
ii.
Income
from Rent (Section 35)
iii.
Income
from Agriculture (Section 40)
iv.
Income
from Business (Section 45)
v.
Capital
Gain (Section 57)
vi.
Income
from Financial Assets (Section 62)
vii.
Income
from Other Sources (Section 66)