Certain definitions are included in the Income Tax Ordinance accompanying the Financing Act 2012.
Again, some definitions have been changed. These matters have to do with income tax.
Recently, the National Tax Authorities (NBR) released the Circular Income Tax, which brings together the various changes in the income tax area in the budget for the financial year 2022-2023. Circular 2022-23 Income Tax lists the definitions included and amended in this document.
Section 12 of the Income Tax Ordinance contains the definition of bank transfer by adding Section 12. It states that ‘Bank Transfer’ also includes crossed checks, mobile financial services or any other method approved by Bangladesh Bank.
The definition of ‘charitable purpose’ has been changed in Article 2 of the Income Tax Ordinance, Article 16. Charitable Purposes means aid to the poor, educational aid, medical aid and the promotion or advancement of any purpose of general public benefit. Provided that the improvement or extension of any purpose in the public interest is not considered a charitable purpose unless approved by the National Board of Revenue. Apart from this, no activity of commerce, trade or business is deemed to be for “charitable purposes”. Any service rendered in exchange for goods and the total value of such goods in any income year exceeds Tk 20 lakhs does not qualify as ‘charitable purpose’.
Article 28 of the Income Tax Regulation contains the definition of export. Export means the supply of goods or services from Bangladesh outside the geographical borders of Bangladesh. Apart from this, the export also includes the supply of locally produced raw materials and other materials under domestic back-to-back LC.
Research and development
The definition of ‘research and development’ is included in Article 54 of the Income Tax Ordinance. It means systematic, exploratory and experimental studies, which should be new or involve technical risks and should be in the field of science and technology and should be conducted to acquire new knowledge or to use the results of the study for the development of production or materials, machinery, agricultural products or processes.
Delivery of goods
Article 61 of the Income Tax Regulation includes the definition of ‘supply of goods’. It states that by ‘delivery of goods’ is meant the sale, exchange or otherwise transfer of ownership of goods. Also sale and delivery of goods under hire purchase agreement or financial lease.
A new paragraph in Article 62-A of the Income Tax Ordinance has included a new provision in the definition of tax day. According to the new provisions, 30 June after the end of the income year will be treated as a tax day for a natural person who is liable to tax, who has never filed a tax return before. The case is explained by means of examples. Let’s say that Sumin Hasan has to file a return for the first time in FY 2022-23. He can file income tax returns every day until June 30, 2023 through the universal self-assessment system. On the other hand, Nargis Akhtar is required to file returns from the 2019-20 tax year. But he hasn’t filed a tax return yet. He decided to file all returns together in fiscal year 2022-23. In that case, he can file the return by June 30, 2023 only for the tax year 2022-23 through the universal self-assessment mode. Returns for tax years 2019-20, 2020-21 and 2021-22 can be filed in normal mode. By the way, Tax Day usually falls on November 30th. Individual taxpayers are required to file returns for the previous income year by that date.