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Collection of tax from travel agent under Section 95 of the Bangladesh Income Tax Act 2023 explained with tax rates, compliance requirements, and practical guidance. |
Collection of tax from travel agent under Section 95 | Bangladesh Income Tax Act -2023
As per section-95(ITA-2023),
Collection of Tax from Travel Agents
(1) Notwithstanding anything contained elsewhere in this Act, any person responsible for making a payment to a resident by way of commission, discount, or any other monetary or money-convertible benefit, by whatever name called, for the sale of passenger tickets or the carriage of air cargo, shall deduct or collect advance tax at the rate of 0.3% (zero point three percent) of the total value of the passenger tickets or the air cargo carriage charges at the time of making such payment.
(2) Where an incentive bonus, performance bonus, or any other benefit, by whatever name called, is payable in connection with the sale of passenger tickets or air cargo services in addition to the amount referred to in sub-section (1), the person responsible for making such payment shall deduct tax equal to:
A/B × C
Where—
- A = the amount of the incentive bonus, performance bonus, or other benefit referred to in this sub-section;
- B = the amount of the commission, discount, or other benefit referred to in sub-section (1); and
- C = the amount of tax deducted or collected at source on the commission, discount, or other benefit referred to in sub-section (1).
(3) For the purpose of computing the value of passenger tickets or air cargo charges under this section, any amount paid towards embarkation fees, travel tax, flight safety insurance, security tax, or airport tax shall be excluded from such value or charge.
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Frequently Asked Question (FAQ):
1. What is Collection of tax from travel agent under Section 95?
Section 95 of the Bangladesh Income Tax Act 2023 requires the collection of tax from travel agents at prescribed rates on specified payments or transactions. The collected tax is deposited with the government and may be adjusted against the taxpayer's final income tax liability.
2. Who is responsible for collecting tax under Section 95?
The person or organization making the specified payment to a travel agent is responsible for collecting tax under Section 95 before making the payment, following the applicable rules and rates.
3. What is the tax rate for Collection of tax from travel agent?
The applicable tax rate under Section 95 depends on the latest provisions of the Bangladesh Income Tax Act 2023 and any subsequent government notifications or SROs. Taxpayers should verify the current rate before processing payments.
4. Is the tax collected under Section 95 adjustable?
Yes. In most cases, the tax collected under Section 95 is treated as an advance tax and can generally be adjusted against the taxpayer's final income tax liability, subject to the provisions of the Bangladesh Income Tax Act 2023.