Existing bank accounts to be allowed for rent deposit

The revenue board is set to relax the rules for house rent transaction through bank accounts by allowing house-owners to use their existing bank accounts for depositing the monthly rent exceeding Tk 25,000.
The National Board of Revenue (NBR) made the change to ease the rules as a few questions relating to the maintenance cost of separate bank accounts by the house-owners surfaced.
The house-owning taxpayers will have to furnish with the tax returns the accounts with details on income from house rents that they would be receiving during the current fiscal year (FY).
In the FY 2014-15, the NBR incorporated the provision of opening a separate bank account on transaction of monthly house-rents if the aggregate house rent income exceeds Tk 25,000.
The income tax wing of the NBR is likely to issue an order Tuesday (today) incorporating the changes and clarifying some other issues that have created confusion among house-owners and tenants.
Many have found the need for more explanation on a few important issues that may arise during collection or payment of monthly house rents.
Some house-hold owners said they have found the provision quite difficult to comply with on the basis of existing order due to lack of clarity on procedures. Tenants have also raised questions on a few issues that have not been clarified in the law.
It should be made clear as to who will open a bank account if anyone collects house-rents obtaining 'power of attorney' of any house-property, said Shamsul Huq, a house-owner of the city's Mirpur area.
In that case, it is not clear who will be held responsible for opening the bank account, he said.
There is also confusion over collection of house rents by joint-owners of houses, he added.
The NBR rule also did not clarify whether the bank account maintenance cost will be treated as allowable expenditure for a taxpayer, he added.
Salma Chowdhury, a tenant of a fully-furnished flat of the city's New Eskaton area, said she pays separate rents for spaces and furniture.
 "It is not clear whether rents for furniture would be considered as house rent or not," she said.
Following the confusions, the NBR has framed rules to give a clear guideline on house rent collection. The income tax policy wing has discussed the matter with the top income tax officials and sought their suggestions in a bid to resolve the confusions.
According to the NBR order, house-hold owners will have to pay penalty at 50 per cent of taxes payable on house property income or Tk 5,000, whichever is higher, in case of non-compliance with the order.
The penal provision has been incorporated in the Finance Act-2014.
 "Where any person, having income from house property, has, without reasonable cause, failed to comply with the provisions of any order or rule made in pursuance of, or for the purposes of section 35(2), the Deputy Commissioner of Taxes, shall impose upon him a penalty of fifty per cent of taxes payable on house property income or five thousand taka, whichever is higher," said the Finance Bill-2014.
Tax officials said trend of concealing the house-rent income will be checked with the measure.
Existing taxpayers, who will show house-rent receipt above Tk 25,000 will easily be identified, they said.