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Deduction of Tax at Source (TDS) from Employment Income under Section 86 of the Bangladesh Income Tax Act, 2023. |
Deduction of tax at source from “income from employment” under Section 86 | Bangladesh Income Tax Act -2023
As per section-86(ITA-2023) ,
Deduction of Tax at Source from Income from Employment
(1) Any person responsible for paying income under the head "Income from Employment" shall, at the time of payment, deduct tax from the amount payable. The tax shall be calculated at the average rate or rates applicable to the employee’s estimated total income under that head.
(3) Where a Government official acts as a Drawing and Disbursing Officer (DDO), or prepares or signs a salary bill for himself or any subordinate official for the purpose of drawing salary from the Government or any authority, he shall, at the time of preparing or signing the bill, deduct tax at the average rate applicable to the estimated total income of the concerned official, provided that the annual salary subject to tax exceeds the tax-free threshold for the relevant income year.
(4) While making deductions under sub-sections (1) and (3), any surplus or shortfall arising from previous deductions shall be adjusted by increasing or decreasing the current deduction accordingly.
(5) Where tax has already been deducted or paid at source under this section, including any advance tax paid under this Act, and the total tax deducted or paid is approximately equal to the tax likely to be payable on the employee’s estimated total income, the Deputy Commissioner of Taxes may, upon application by the employee and after considering the supporting evidence, issue a certificate for the remainder of the income year authorizing either:
(a) no further tax deduction from the employee’s income; or
(b) deduction of tax at a reduced rate.
You may learn more-
Duties and functions, and jurisdiction of income-tax authorities under Section 08
Special agricultural income under Section 41 | Bangladesh Income Tax Act -2023
Frequently Asked Question (FAQ):
1. What is the deduction of tax at source from income from employment under Section 86?
Under Section 86 of the Bangladesh Income Tax Act, 2023, employers are required to deduct tax at source from an employee's salary, allowances, bonuses, and other taxable employment income before making payment.
2. Who is responsible for deducting tax from employment income in Bangladesh?
The employer is responsible for calculating, deducting, and depositing tax at source from an employee's taxable income in accordance with the provisions of Section 86 of the Bangladesh Income Tax Act, 2023.
3. Which types of employment income are subject to tax deduction at source?
Tax deduction at source generally applies to salaries, bonuses, allowances, benefits, perquisites, and other taxable payments received by an employee from an employer.
4. Why is tax deducted at source from employment income?
Tax is deducted at source to ensure timely collection of government revenue and to help employees meet their income tax obligations gradually throughout the tax year.