Taxing tenants and patients

The National Board of Revenue (NBR) issued a statutory regulatory order (SRO) on July 1 last proposing some changes in the Income Tax Rules, 1984, and sought suggestions or objections, if any, within 15 days.
In the SRO, a new rule, 8A, was proposed. Under the sub rule 1 of it, it was proposed: "...... Where any person ......, receives any sum or aggregate sums exceeding Tk 25,000 per month on account of any rent of a house property or it's unit, the person shall operate a separate bank account in a scheduled bank for the purpose of depositing the rent.."
Now it can be easily understood that if any owner of a property receives rents from more than one tenant and the sum or aggregate sums exceed Tk 25,000 per month, the property owner is to pay tax, deposit such rents in a bank account and he is to maintain a register.
Then what will happen, if a property owner rents out four units of a house and the rent per month is Tk 7,000? The total rent will be Tk 28,000 per month. Or what will happen, if a person rents out 10 units of a house at Tk 2,600 per month and receives Tk 26,000 in total? Then he is to deposit the amount in a bank account and maintain a register.
It will invite unnecessary hazards for the small rent earners, who also may face harassment at the hands of some unscrupulous taxmen.
About the harassment, the finance minister in his last budget speech mentioned: "there are some complaints of harassment ...........", and to minimise or reduce the harassment he proposed some remedial steps.
But if the aggregate amount of rent is Tk 25,000 per month from more than one tenant, it will invite harassment, which the government and the finance minister did not like and proposed some steps to reduce it.
Moreover, the finance minister in his budget speech mentioned a measure "to ensure payment of monthly house rent amounting to more than Tk 25,000 through banks."
Here the minister did not mention the aggregate amount and also did not mention that the rent could be paid by more than one tenant. So, the proposition in the SRO was against the spirit of the budget speech of the finance minister. As the proposition is new, it needs to be seen how the taxmen behave. Moreover, if the proposition of the SRO is passed, it will also whip up public annoyance with the government.
So, we propose introduction of the same for the rent exceeding Tk 25,000 from one single tenant, not from more than one tenant and there should be no aggregate amount.
On the other hand, the rule 33I in the SRO bearing the serial no. 9 relating to medical allowance should be amended. It was proposed in the SRO that any medical allowance exceeding 10 per cent of one's basic pay or Tk 60,000 annually, whichever is less, should be included in his income.
This proposition will put an extra burden on the salaried persons and amount to injustice to them, who have to spend more than Tk 60,000 or more than 10 per cent of their basic pay.
The salaried taxpayers will have to face an extra tax burden this year, because the tax-free slabs for other assesses were raised, even by Tk 180,000, Tk 50,000 and Tk 25,000 in three categories-war-wounded freedom fighters, physically-handicapped people and women, and persons aged 65 years and above respectively-in consideration of practicality and inflation. But the slab for other groups was kept unchanged at Tk 220,000.
We all know that due to formalin and other health hazards, medical expenses increased a lot and it was admitted by the finance minister in his budget speech-article no.180, Para nos. (i) and (j), page no. 96. It was mentioned that "treatment of kidney disease is very expensive in our country.........." And I propose to exempt medication service from the payment of VAT."
So, we propose to keep medical allowance tax-free up to the amount that is attested to by the genuine bill or money receipt provided or enclosed by an assesses. The finance minister and the NBR should consider the issues and thus save the small rent earners and patients from unnecessary harassment at the hands of taxmen and also relieve them of the extra tax burden.
habibur40@yahoo.com