House rent docs to be tagged with tax returns

Household owners will have to submit documents on deposit of aggregate monthly house rents above Tk 25,000 through banking channel with individual tax returns in the current fiscal year (FY).
The time for submission of individual tax returns for income year 2014-15 started from July 01, 2015 and is scheduled to expire on September 30, 2015.
The National Board of Revenue (NBR) introduced  the income tax provision in the budget for FY 2014-15 that taxpayers need to comply with for FY 2015-16, tax officials said.
A senior income tax official said the individual taxpayers will have to furnish receipts and bank deposit documents with the tax returns on their income from house rents for 2014-15 assessment year.
"The house owners will have valid documents on house rent collection if they comply with the tax rules. They will easily face taxmen's scrutiny on house rent income," he added.
The income tax rule will help the household owners defend themselves on queries of taxmen regarding their income from house rents, he added.
However, the Deputy Commissioner of Taxes (DCT) is empowered in the income tax ordinance to examine 'practical application' of furnished information in the tax returns.
According to the NBR order, household 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 penalty provision was 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 percent 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 through the measure.
Existing taxpayers, who have already shown house-rent receipts above Tk 25,000, will easily be identified, they said.
Tax officials said there should be a minimum house rent on the basis of area in the income tax ordinance to check concealment of income from this head.
"We have tried to plug holes of tax-evasion by introducing the tax measure but due to some implementation complexities, the government could not materialise its plan," the income tax official said.
In the budget, the tax authority incorporated condition of depositing monthly house rents above Tk 25,000 in dedicated bank accounts. Later, it relaxed the condition by allowing taxpayers' deposit of house rents in existing bank accounts.
However, taxpayers will have to show and mention the house rent deposit in the tax returns. If monthly house rents exceed Tk 25,000 from both single and multiple units, household owners will be responsible to deposit it through banking channels.
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