Income Tax

Topics: Tax, Income tax, Taxation Pages: 8 (2565 words) Published: August 27, 2013
INCOME TAX
Introduction :
The income tax is administrated Income Tax Ordinance, 1984 and the Income tax Rules, 1984 as well as notification made under the Ordinance. The charge of tax of a person depends on its resident ship. Total world Income of a resident is charged to tax in Bangladesh. Where as a non-resident's Bangladesh income is only charged to tax in Bangladesh. There are seven heads of income. The are salary, interest on security, house property, agriculture, business and profession, capital gain and other sources.

Submission of income tax returns are generally due by 30th September in case of non-companies and by 31st December in case of companies.

Assessment is made in several procedures. They are self-assessment, presumptive assessment, spot assessment, pre-audit based assessment. Certain percent of self-assessment cases are selected for audit.

The assessee can prefer appeal if aggrieved by his assessment. There are three primary forums for appeal. They are to the Appellate Commissioner/Additional Commissioner/Joint Commissioner or to the Commission for reviews. The decisions of Appellate Commissioner/Additional Commissioner/Joint Commissioner can be challenged to the next Appellate Court named as Appellate Tribunal.

Withholding tax is leviable on a number of items including contractors, imports, transfer of urban land/building, bank deposits etc.

Bangladesh has Agreement on Avoidance of Double Taxation with 20 countries. Negotiation with some other countries are on way. Definition:
A tax that governments impose on financial income generated by all entities within their jurisdiction. By law, businesses and individuals must file an income tax return every year to determine whether they owe any taxes or are eligible for a tax refund. Income tax is a key source of funds that the government uses to fund its activities and serve the public. Income Tax Laws in Bangladesh:

Income-tax in the Indian subcontinent had its origin in the year 1860 when Mr. James Wilson, the first Finance Member in India, introduced the Income-tax Bill entitled “An Act for imposing Duties on Profits arising from Property, Professions, Trades and Offices”. The Bill sought to raise additional finances in order to replenish the revenue deficit caused by the Sepoy Mutiny of 1857. However, the tax levied was eventually discontinued in 1865. In 1867, the tax was reimposed in an improvement form in the name of a certificate tax. In 1869, the certificate tax was converted into regular income-tax on a wider coverage of assessees. In 1873-74, when there was a comfortable budgetary surplus, income-tax was altogether abolished. Five years later, the tax was again revived in the form of licence taxes and continued till the year 1885-86. In 1886, the Government of India enacted the Indian Income-tax Act, 1886. In 1916, compelled by the necessity to replenish the finances damaged by the War of 1914-18, the Government made some enhancement in the rates of income-tax in the graduated scale. In 1918, the Income-tax Act 1886 was substantially amended to consolidate the law relating to income-tax. In 1922, based on the recommendations of the All-India Income-tax Committee appointed in 1921, the Income-tax Act, 1922 (Act XI of 1922) was passed. A Board of Inland Revenue was created under the Act, which was to be the highest authority for income-tax. The concept of ‘previous year’ as the basis of assessment of income, profits and gains, the taxpayer’s choice of the system of accounting, total income, and adjustment of losses contained in the Act. It was the annual Finance Act which was to set out the rates of taxes and set the machinery into motion. The Act of1922 was amended in 1924 to substitute the Central Board of Revenue for the Board of Inland Revenue. It was further amended and substantially so in 1939 to provide inter alia for the Income-tax Appellate Tribunal (TEC, 1979: 75-77).

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