No separate bank account, tenant register required

The National Board of Revenue (NBR) Tuesday issued guidelines on house-rent collection that relieved householders of the compulsion for having separate bank accounts and tenant registers for paying the rents from the current fiscal year.
In the original provision, it was made mandatory for householders, including individuals, companies, firms or other organisations, to maintain a register and a separate bank account by the householders, including individuals, companies, firms or other organisations.
With effect from July 1, the measure applies to house-owners having monthly aggregate income above Tk 25,000 from house-rents.
According to the guidelines, taxpayers having income from businesses and professional structures, offices or shops must have to pay rents for the spaces through banking channel.
In failure, taxmen would not consider the paid rents as income of the taxpayers instead of 'allowable business expenditure'. Taxpayers will have to pay tax on the rents as their income.  
The taxpayers, however, can maintain a separate register to keep details on tenants. The NBR will give a prescribed format shortly for facilitating taxpayers on maintenance of the data.    
According to the guideline, householders can keep tenants' names, addresses, date of payment of house rents and its amount in the register.
The taxpayers will also have to furnish the accounts' details on income from house rents to the taxmen that they receive in the current fiscal year with the tax returns.
The NBR issued the guideline for smooth implementation of its new measure, officials said.
Framing the guideline was prompted by the NBR's finding of confusion among the house-owners, tenants and taxmen following the announcement of the new step.
The relaxed provision allows taxpayers to use the existing bank accounts for depositing house rents.
The government step for relaxation came as many house-owners had raised question over the additional cost they would have to bear for maintenance of a separate bank account under the original provision of the rent rules.
The income-tax wing of the NBR has also clarified some issues regarding house-rent collection by power of attorney, in case of joint-ownership of a house, for full-furnished flats and payment by tenants in cash.
Under the guidelines, the holder of power of attorney on a house will be held responsible for opening a separate bank account for receiving house rents through banking channel.
In case of joint-ownership of a house, bank account should be opened by the partner who is receiving house rents above Tk 25,000.
According to the guidelines, tenants can pay house rents in cash if he doesn't have any bank account but the householder will have to deposit the money in his bank account.
For full-furnished flats, rents for both spaces and furniture would be considered as house-rent.
In case of non-compliance, house-owners will have to pay penalty at 50 per cent of taxes payable on house property income or five thousand taka, whichever is higher.
The penalty provision has been incorporated into the proposed Finance Act-2014.
"Where any person having income from house property has, without any 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," says the Finance Act-2014.