Bangladesh: NBR finalises rules for house rent collection thru banks today

Dhaka, June 30 (New Age): The National Board of Revenue is going to finalise by today rules for the house owners having income more than Tk 25,000 from their house property to deposit house rent through banks, officials said.
The rules will describe the procedure how the house owners will maintain bank accounts for receiving house rent through banks, they said.
The revenue board has recently introduced a system under which a landlord will have to receive house rent through banks if his or her total income from house property crosses above Tk 25,000 a month.
The provision which will be effective from July 1 has been introduced to ensure transparency in the process of house rent collection in order to widen tax net and prevent tax evasion by the house owners.
According to the proposed rule, a house owner will have to maintain a separate bank account to deposit his/her income from house property.
Tenants can directly deposit the house rent to the dedicated account or the house owner will deposit the money collected in cash or cheques, officials said.
According to the Finance Bill-2014 approved by parliament on Saturday, the revenue board will impose penalty on the house owners at the rate of 50 per cent of taxes payable on income derived from house property or Tk 5,000, whichever is higher, for not transacting the house rent through banks.
‘The responsibility of depositing house rent to the account will go to the house owners and if they do not do so, the NBR will impose the penalty,’ a high official said.
Initially, the revenue board had planned to include a provision authorising banks to deduct tax at source on income derived from house rent before making payment to the house owners.
But the idea was dropped later considering issues like the house owners may not have taxable income after payment of bank interest on loan taken for construction of the house.
Now, house owners will pay the tax during submission of their income tax returns.