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Deduction of Tax at Source from Rent under Section 109 of the Bangladesh Income Tax Act 2023 – Complete guide to TDS rules, compliance, and tax obligations. |
Deduction of tax at source from rent under Section 109 | Bangladesh Income Tax Act -2023
As per section-109(ITA-2023),
Deduction of Tax at Source from Rent
1. Every specified person who pays rent for any of the following shall deduct tax at source at the rate of 5% (five percent) from the rent at the time of payment:
· (a) any house property;
· (b) a hotel or guest house;
· (c) vacant premises, plant, machinery;
· (d) any water body; or other than a Government-owned water body.
· (e) Any building that is used entirely as a warehouse."
2. If, after the assessment for the relevant tax year, it is determined that—
· (a) no income tax was payable by the owner of the house property, the entire amount of tax deducted at source shall be refunded; or
· (b) the tax deducted exceeds the amount of tax payable, the excess amount shall be refunded.
3. Where the Deputy Commissioner of Taxes, upon application by the owner of a house property, issues a certificate in the prescribed form stating that, to the best of their knowledge, the owner is not likely to have any assessable income during the year or that such income is exempt from income tax under this Act, no tax shall be deducted under sub-section (1) while the certificate remains valid. Payments shall continue to be made without deduction until the certificate is cancelled.
4. For the purposes of this section, "rent" means any payment, by whatever name called, made under a lease, tenancy, or any other agreement or arrangement for the use of any house property or hotel accommodation, including any furniture, fittings, and the land appurtenant thereto.
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Frequently Asked Question (FAQ):
1. What is the deduction of tax at source from rent under Section 109?
Section 109 of the Bangladesh Income Tax Act, 2023 requires tax to be deducted at source from eligible rent payments made to landlords, subject to the applicable tax rates and legal provisions.
2. Who is responsible for deducting tax from rent in Bangladesh?
The person or organization paying the rent is generally responsible for deducting tax at source, depositing it with the government, and complying with reporting requirements under the Income Tax Act, 2023.
3. When should tax be deducted from rent payments?
Tax should generally be deducted at the time of payment or when the rent is credited to the recipient's account, whichever occurs first, according to the applicable tax provisions.
4. What happens if tax is not deducted from rent under Section 109?
Failure to deduct or deposit tax may result in penalties, interest, or other legal consequences under the Bangladesh Income Tax Act, 2023. Taxpayers should comply with the prescribed rules and deadlines.