Filing income tax online: How do you do it?

Tax season is upon us once more, as it is every year between 1 July and 30 November. 

Like previous years you can file your taxes online if you have the required paperwork ready.

It is important to get this done before the 30 November deadline, as this year there is a 4% penalty as interest for every calendar month unpaid. 

This is calculated the instant the month passes, so even if you filed your taxes on 1 December at 1am, you will still be charged.

What are the rules?

According to the rules of the National Revenue Board(NBR), if your income exceeds a certain threshold then you are liable to pay taxes on your income. 

However there are some special categories that have higher limits before taxes must be paid on them.

By default if your income exceeds 3.5 lakh in a year you will need to file income tax. 

For women and senior citizens, the amount is raised to 4 lakh and if you are a war-wounded gazetted freedom fighter then you are allowed 5 lakh of tax-free income.

Your previous tax assessments, urban residence, car ownership, business ownership, and participation in tenders and elections are also required for tax filing. 

If your income is below any of the threshold, you are still required to file income tax, but they must be filed as 'zero return', or fines and penalties may apply.

What do you need to get started?

Before you begin, it is important to have all the required paperwork ready and in hand to ensure the process goes smoothly and you do not run afoul of the relevant tax laws.

The important documents to have on hand are:

• eTIN
• NID copy
• Home address
• Previous years return
• Investment details(if any)
• Property details(if any)
• Tax-free income certificates(if any)

If you are employed then you also need:

• Salary certificates
• Bank statements

Registering for the e-return system

Once you have gathered all relevant documentation along with your Tax Identification Number(TIN) and a phone number under your own NID, it is time to register at (www.etaxnbr.gov.bd).

The first step is to click on the eReturn button in the top center of the site, and then click on the register button beneath the log in options below it. You will then need to input your TIN and your NID registered phone number (excluding the first 0). Verify your phone with the provided OTP and set your password.

Now that you've got all your paperwork and set up your account, it is time to do your taxes.

Step 1 - Logging in

Simply go back to the previously listed website and put in your TIN, password and captcha  and sign in. Once inside you will see a dashboard with a 'Return Submission' option on the left. Click that to continue.

Step 2 - Tax Assessment information

To begin with, you will be shown a page where you will be asked for your tax assessment information. Here you will need to provide details about your year of income, any return schemes, and the sources of that information. 

If you are tax exempt, you can fill in the appropriate amounts as well as your resident status.

Step 3 - Income details

This page will require you to declare your revenue streams, such as salaries, income from house rent, interest on securities, capital gains,  businesses and agricultural income and any other additional sources you may have.

Once done, click 'save and continue' to move on.

Step 4 - Additional information

This section is unsurprisingly for additional information, such as the location of your primary source of income. You will be able to select from a drop down menu which has options like Dhaka North City Corporation, Dhaka South City Corporation, Chittagong City Corporation, Other City Corporation, or Any Other Area. 

This is also where you can indicate any special exemptions you have.

Step 5 - IT10B requirements

If your total assets are valued at Tk40 lakh or more, then you are required to fill out the IT10B form. If you fall below this threshold then you don't have to complete this form however you are required to include your annual personal and family expenses in full. 

Step 6 - Income details

Here is where you will need to provide details on any additional income from other sources such as foreign income or tax-exempt income. These are all listed under drop down menus for ease of use. After selecting an relevant option you will be asked to provide further details which will then be used to calculate your net income which will be displayed automatically on screen.

Step 7 - Investment Categories

This is where you will have to declare your investments such as stocks and shares, general provident funds, savings certificates and so on. Like before after selecting an option you will be required to provide additional information such as your bank details. 

Your total allowable investment for rebate will be calculated as you fill in your information.

Step 8 - Expenditures

Here is where you will need to declare all your expenditures for the year. There will be multiple categories to fill out, with additional comments if needed. These cover things such as food, clothing, accommodation(cars, transport,  household and utilities), children's education and any other expenses.

Step 9 - Taxes and Payments

Here you can input any source or advance taxes you have already paid, which will automatically be deducted from your total tax. If there is no tax due on your income then the Payable Amount is zero.

Step 10 - Final Review

This is the final step of the process, all of the information you have inputted so far wil be displayed along with the tax calculations. It is very important to review all the information given, as once you select 'Yes' under the Verification and Signature section no further changes will be allowed as your returns will be submitted. If you wish to review or revise the provided information simply select 'No' and make the needed changes. 

Step 11 - Downloading the receipt

Once the tax return has been submitted you will get a confirmation message and the option to download a Reference ID and Acknowledgement Receipt. 

At this point you've completed the process and your income tax return is finished. 

You will either need to file the return electronically or print a copy of the form to mail to the income tax department.

If this procedure seems too complicated to handle yourself, it is better to hire assistance from a tax lawyer to help. 

Otherwise congratulations! You are done until next year.