Tax burden to add up, if return deadline missed

Taxes will be imposed on the entire income of a taxpayer without any exclusion, if the return is submitted after the Tax Day, the deadline for return filing.
A provision in this connection has been incorporated in the new tax law and has been made effective from the current fiscal year for individual, non-resident and corporate taxpayers, officials said.
Under Section 2.26 of the new law, taxpayers are entitled for certain tax rebate, tax holiday, exemptions, reduced tax rates or exclusion of any income from total tax computation.
The facilities will not be considered, if returns are filed after expiry of the deadline, the law stipulates.
Some senior tax officials said the new provision would entail a heavier tax burden on an individual or corporate taxpayer, if the deadline is missed.
The interest rate on penal taxes was 2.0 per cent for up to 12 months in the previous tax law. The rate has been doubled to 4.0 per cent in the new act for up to 24 months. In case of a fraction, the entire month will be considered for imposition of the penalty.
The penal tax rate would be added with the entire income of a taxpayer in case of missing the deadline.
Businesses enjoying the tax holiday facility or individuals entitled for investment-related tax rebate or tax credit, will not get  the benefits, if they miss their respective deadline for return submission.
As per new Income Tax Act-2023, the last date for submission of tax return by individual taxpayers is November 30. The time for tax return submission this year started on July 1, 2023 and the period will continue until November 30, 2023.
Taxpayers get five months' time to prepare their tax returns. So the provision is not 'unjustified' and it will help bring discipline in tax payment, tax officials said.
Tax returns that would be submitted after expiry of the timeline would be assessed without exclusion of the tax-free income of the taxpayers.
"Tax will be imposed on entire income of a taxpayer along with a 4.0 per cent monthly rate of interest for the taxpayers who would miss the deadline," said a senior tax official.
The new law has not kept any 'grace period' as was earlier, for the taxpayers, if they apply for time extension for availing the tax benefits on their income, he said.
However, taxpayers would be able to submit tax returns under the self-assessment method anytime in the year, he added.
Under the new measure, taxpayers would not be entitled for the tax exemptions such as waiver on one-third of the total income or Tk 4,50,000, whichever is lower.
Following the changes in law, tax now will be imposed on house rent, medical and conveyance allowances as well as fiscal bonus, if the return filers miss the deadline.
Tax rebate on investment in securities would not be considered for the waiver in this case, he added.
As per new law, investment rebate on government securities has been allowed up to Tk 0.5 million and for Deposit Pension Scheme (DPS) it is up to Tk 60,000.
Under the new law, private recognized provident fund, private approved provident fund and Superannuation Fund will have to submit tax returns within the deadline to reap the exemptions.
Reduced tax benefit for agricultural income, poultry, fisheries or tax exemptions on ICT businesses would not be valid, if the concerned corporate taxpayers submit tax returns after the deadline, the tax official said.
Deadline for corporate taxpayers varies on the basis of nature of their business. Basically, there are two deadlines for corporate taxpayers---June 30 and December 31.
Earlier, individual taxpayers could avail the tax benefits even after expiry of the deadline by submitting applications to the tax commissioners.
A former tax official has said the measure seems harsh for taxpayers as their tax liability would increase to a great extent, if the entire income is deemed to be taxable.
"The government should consider allowing the grace period for taxpayers, at least for this year, to help them adapt with the new measure," he said.
Majorities of the taxpayers usually file tax returns at the last moment while many miss deadlines.
There are no provisions for time extension in the new tax law.
However, it is a common practice for the National Board of Revenue (NBR) to extend the time twice or thrice in a year for submission of tax returns following requests from trade bodies and a cross section of people.
"The new law should keep some breathing space for taxpayers," said Md Abdul Matin, president of Dhaka Taxes Bar Association.
The government could consider the socio-economic condition in Bangladesh in view of imposition of the provision, he said.
However, he said the measure would ensure discipline in taxpayment and prompt them to submit tax returns timely.
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