Taxpayers will not be able to enjoy tax exemption or reduction in rate on any eligible amount that appear in the revised or amended income tax returns.
They have to pay income tax at regular rates on the income that appear later, intentionally or unintentionally.
Income tax law allows the taxpayers to file revised or amended income tax returns within six months of filing original returns if they find any mistakes in the returns.
On the other hand, tax officials can also ask the taxpayers to file revised returns if they detect any errors, concealment of income and evasion of tax during scrutiny and audit of the returns.
Officials of the National Board of Revenue told New Age on Monday that the provision was included in the Income Tax Ordinance-1984 to prevent misuse of the facility of filing revised returns.
Both individual and corporate taxpayers, intentionally or unintentionally, may hide or not show the income which is tax free or eligible for reduced rate in the original tax returns.
They may show such additional income in the revised or amended returns to avail tax benefit, they said.
According to the new provision of the tax law, taxpayers will not be allowed to enjoy the tax exemption or reduced rate on the additional portion of income which they will show in the revised or amended returns.
The additional income shown in the revised or amended returns as tax exempted or reduced tax rate will be treated as income from other sources which will face tax at regular rates ranging from 10 per cent to the highest 30 per cent.
The provision will be applicable on the revised and amended tax returns submitted after July 1, 2017.
The revenue board clarified the applicability of the provision with example in the Income Tax Paripatra (circular) for the fiscal year 2017-2018 which was published last week.
For example, if a taxpayer newly shows Tk 1 lakh tax-free or reduced rate income in the revised returns but no such income was shown in the original returns, then Tk 1 lakh will be treated as income from other sources, even if the information is accurate, and will be taxed, a high official of the NBR said.
On the other hand, if he shows any additional amount of tax-exempted or lower tax rate income then only additional income will be taxed, he said.
Tax free income limit for individual taxpayers is Tk 2.50 lakh while regular tax rates are 10 per cent on Tk 4 lakh after Tk 2.50 lakh tax-free threshold, 15 per cent on next Tk 5 lakh, 20 per cent on next Tk 6 lakh, 25 per cent income next Tk 30 lakh and 30 per cent for the remaining income.
On the other hand, income tax rate for corporate taxpayers ranges between 25 per cent and 45 per cent based on nature of business and status of listing with stock exchanges.
Taxpayers enjoy tax exemption fully or partially on different types of income such as income from investment in different sectors, agriculture, fish farms, pension income of retired public servants, gratuity receipts up to Tk 2.50 crore, provident fund, income from ICT business, poultry firms and some other income specified in the income tax law.
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