in income-tax system: an observation
regular income-tax system involves filing of a return
of income with the income-tax Department along with the
statement of accounts maintained, if any, production and
examination of books of accounts, determination of total
income, issue of a demand notice for payment of tax and
finally its payment. As this regular procedure is a lengthy
and cumbersome one especially for assessees of low-income
groups, the National Board of Revenue (NBR) in 1964- 65
introduces an alternative method, which is known as self-
assessment procedure in our income tax system. This procedure,
however, proves unsuccessful and ceases to run. After
the evolution of Bangladesh it is reintroduced in 1981.
The sections 83A, 83AA and rule 38 of the Income Tax Ordinance,
1984 provide all about self-assessment procedure.
a self-assessment system a person is required to file
his/her return along with the evidence of payment of tax
payable by him/her, assessed by himself/herself. If the
assessee does the assessment and files required documents
carefully following the guidelines laid down in sections
83A, 83AA of Income Tax Ordinance, 1984 and rule 38 made
there-under, the Deputy Commissioner of Taxes (DCT) or
any other official authorised by him/her shall receive
the return and will issue a receipt of the return with
his/her signature and official seal affixed thereon and
the said receipt shall constitute an order of assessment
which means the income of and the tax payable by the assessee
have been duly assessed.
can carry out self-assessment?
Every assessee, whose income is chargeable to tax under
any head, may avail of the benefit of the self-assessment
procedure. The returns should be filed on or before-
*By an individual assessee by the 30th of September next
following the income year.
*By a company by the 15th of July next following the income
year or, where 15th July falls before the expiry of 6months
from the end of the income year, before the expiry of
such 6 months. [Section 75(2) C].
of paying tax under the self-assessment scheme
Where the assessee is not a Private Limited Company
The assessee has to-
*Super-scribe 'Self-assessment' on the top of the return
*File it by the 30th of September next following the income
*Pay on or before the date the tax amount calculated at
the rates applicable to the total income shown in the
*If he/she is an individual assessee with a statement
of assets and liabilities in the form specified in rule
*Where income is derived from business or profession and
books of accounts have been maintained, the return shall
accompany a copy of the trading, profit and loss account
and balance sheet.
*Where no books of account have been maintained, the return
shall accompany a statement showing the particulars of
income and expenditure and a bank certificate from a schedule
bank confirming maintenance of an account either in the
name of the assessee or in the name of the business or
profession in the year of commencement of the business.
*Where income is derived from any head other than business
or profession, the return shall accompany a statement
showing particulars of income.
*The return is to be duly verified by the assessee and
found to be correct and complete in all respects.
the self-assessment return will not be accepted if it
*Loss or less income than last assessed income or income
below the taxable limit.
*Making or accepting gifts or any tax-free income.
the receipt of any return submitted in accordance with
these provisions shall be deemed to be an order of assessment.
However, nothing in this rule shall apply to a new assessee
deriving income from business or profession whose return
shows an income less than 15% of the capital invested
in business or profession.
for Private Limited Companies
A private limited company also may file return under the
self-assessment scheme .The self-assessed return will
be accepted if the following conditions are satisfied:
*The returns should be filed on or before 15th July next
following the income year or, where 15th July falls before
the expiry of 6 months from the end of the income year,
before the expiry of such 6 months. [Section 75(2) C].
*Income shown in the return is higher by not less than
10% of the last assessed income and has also increased
by at least a further 10% for each preceding assessment
year in respect of which the assessment is pending.
*Tax is paid on the basis of the declared income or on
fifty thousand taka, whichever is the higher, on or before
the date on which return is filed.
*The return shall accompany a copy of the accounts of
the company audited by a Chartered Accountant.
the DCT shall assess total income of the assessee on the
basis of the return and communicate the assessment order
to the assessee within 30 days next following.
a taxpayer-friendly procedure
Self-Assessment procedure proves a simple and easy one
in the sense that the assessee was assessed on the basis
of his return submitted. There is no provision for further
audit or enquiry. In other words, there is little chance
to get harassed. The DCT, however, shall make an audit
only when a return filed by an individual shows the income
as 15% higher, and in case of a private limited company,
20% higher than the last assessed income.
measures in Self-Assessment
Indeed, a member of a civilised society takes paying taxes
as a moral responsibility, and feels that it augments
his social dignity. Regrettably, in our country, the mentality
to pay taxes as a civil responsibility has not grown up
yet. The more one can evade taxes, the cleverer one feels
oneself to be. And more regrettably, such evading or avoiding
tax does not cast any social stigma on them, rather they
in course of time become leaders of the land. The penalty
provisions in Self-Assessment system, therefore, bears
rationale. According to penalty provisions, if any definite
information regarding concealment of income comes to the
DCT, he usually orders for fresh assessment, and the penalty
for such concealment of income or furnishing inaccurate
particulars of income is five times the tax sought to
having the stern penalty measures, an honest assessee
should not feel uncomfortable with the self-assessment
scheme. As a matter of fact, this scheme of self-assessment
has been taken to relieve the assessee of procedural formalities.
If understood properly, taxpayers certainly will embrass
it cordially. Undoubtedly it deserves that welcome.
Zahidul Islam, a legal researcher, is currently working
for ERGO (Legal Counsels), Dhaka.