Personal income tax reductions

It is that time of the year when we have to file our tax returns. I hope all of you remembered from one of my previous articles the tips about being prepared for it. Since the tax year is from 1 July of one year to 30 June of the following year I am sure everyone is busy getting statements and bank certificates to calculate the tax we need to pay on our income.

First of all and most importantly we have to acquire the knowledge as to how best we can invest, get good returns on our investments and at the same time to know what kind of investments will give us tax rebates.  

Investing in Paribar Shanchaya Patras (family bonds), Five Years Bangladesh Shanchaya Patras (BSP), not only give you good interest earnings but also help you in paying less income tax. I was pleasantly surprised to learn this year when I was sitting with my tax advisor that I was going to pay less tax than the previous year.  This happened for three reasons - I had invested in Government Bonds (Paribar Shanchaya Patras), the reduction in the tax rate on my earnings as per the new budget, having invested a certain amount in the share market, which is non-taxable.

Please remember to submit your e-TIN certificate to banks and non-banking financial institutions where you have invested in fixed deposits. This is important as otherwise there will be a 15 percent deduction on your interest instead of 10 percent. 

We should all endeavour to be law-abiding citizens and file our tax returns on all our earnings. It would be advisable to get a good tax consultant who can help you not only in doing your tax returns but also giving you good advice on how you will benefit most.

There was a time in the early years of my banking career where we had to do our own tax returns. Being a total novice in this I had hired a young man (like many of my colleagues) to assist me. Unfortunately he turned out to be a fraud and for two years he tricked me into confirming that he was submitting my returns and taking money from me for his services. Whenever, I asked him for the income tax certificate he told me he was keeping it with himself in a file under my name. 

This was the level of my naivety till the day I got a letter from the tax office imposing a huge fine on me for not paying taxes for the past years!  Today I am wiser and I would like to advise all my readers to be the same.