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Collection of Tax on Account of Purchase of Power under Section 114 of the Bangladesh Income Tax Act, 2023 |
Collection of tax on account of purchase of power under Section 114 | Bangladesh Income Tax Act -2023
As per section-114(ITA-2023),
Collection of tax on purchase of power
(1) Notwithstanding anything contained elsewhere in this Act, the Bangladesh Power Development Board, any other person engaged in the distribution of power, or any specified person purchasing power from a person engaged in captive power generation shall collect, deduct, or pay tax at the rate of 3% (three percent) of the amount payable for the purchase of power at the time of payment.
(2) Where a person is exempt from tax on income derived from the generation of power for an income year, the Board may, upon an application made by the assesses, issue a certificate in writing authorizing payment for that income year—
(a) without any deduction or collection of tax;
(b) with deduction or collection of tax; or
(c) with deduction or collection of tax at a proportionately reduced rate.
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Frequently Asked Question (FAQ):
1. What is the collection of tax on account of purchase of power under Section 114?
Section 114 of the Bangladesh Income Tax Act, 2023 requires the collection of tax on payments made for the purchase of power according to the prescribed rate and conditions. The collected tax must be deposited with the government following applicable tax regulations.
2. Who is responsible for collecting tax on the purchase of power?
The person or entity responsible for making payment for the purchase of power is generally required to collect tax under Section 114 before making the payment, subject to the provisions of the Bangladesh Income Tax Act, 2023.
3. When is tax collected under Section 114?
Tax is collected at the time the payment is made or credited for the purchase of power, whichever occurs first, unless otherwise specified under the Income Tax Rules or government notifications.
4. Why is Section 114 important for taxpayers?
Section 114 helps ensure proper tax compliance, improves government revenue collection, and reduces the risk of penalties for organizations involved in purchasing power in Bangladesh.