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“Deduction at Source from Compensation Against Acquisition of Property under Bangladesh Income Tax Act 2023” |
Deduction at source from compensation against acquisition of property under Section 111 | Bangladesh Income Tax Act -2023
As per section-11(ITA-2023),
Deduction of Tax at Source from Compensation for Acquisition of Property-
Any person responsible for making payment of any compensation, by whatever name it may be called, for the Government’s acquisition of any immovable property shall deduct tax at the time of making such payment at the following rates:
(a) 6% (six percent) of the total any compensation, amount, if the acquired immovable property is located within a City Corporation, Paurashava, or Cantonment Board area;
(b) 3% (three percent) of the total any compensation, amount, if the acquired immovable property is located outside any City Corporation, Paurashava, or Cantonment Board area.
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Frequently Asked Question (FAQ):
1. What is deduction at source from compensation against acquisition of property under Bangladesh Income Tax Act 2023?
Answer:
Deduction at source from compensation against acquisition of property means tax
deducted by the person or authority responsible for paying compensation when a
property is acquired. The deduction is made according to the provisions of the
Bangladesh Income Tax Act 2023 before releasing the compensation amount to the
property owner.
2. Who is responsible for deducting tax from compensation paid for acquired property in Bangladesh?
Answer:
The authority, organization, or person responsible for paying compensation for
acquired property is generally responsible for deducting tax at source under
the applicable provisions of the Bangladesh Income Tax Act 2023 and depositing
the deducted amount to the government treasury.
3. How is tax deduction calculated on compensation against acquisition of property in Bangladesh?
Answer:
Tax deduction on compensation against acquisition of property is calculated
according to the prescribed rate and conditions under the Bangladesh Income Tax
Act 2023. The applicable rate may depend on the nature of payment, authority
making the payment, and relevant tax rules issued by the government.
4. Why is deduction at source applicable on property acquisition compensation?
Answer:
Deduction at source is applicable on property acquisition compensation to
ensure timely tax collection by the government and improve compliance. It
allows tax to be collected at the payment stage before the compensation reaches
the property owner.