How to Prepare an Income Tax Return in Bangladesh

Preparing an income tax return is mostly about the numbers behind the form. The Income Tax Act 2023 return for individuals asks for income, tax, assets, liabilities and living costs, and these must agree with each other. When people prepare their return in a hurry, the wealth statement is where things go wrong, and that is also what Taxes Circles look at most closely.

This page is a preparation method for salaried people, professionals, landlords and small business owners who want to understand or check their own working papers. It is deliberately practical: how to organise the file, how to reconcile, and what to look for. For our end-to-end return preparation service see the tax return preparation page.

Step one: build income schedules by head

Start with a separate working schedule for each head of income you have. Keep source documents next to each figure so anyone checking can trace it.

• Salary: annual salary certificate showing basic, allowances, perquisites, bonuses and tax deducted
• Rent from house property: rent received, municipal tax, interest on loan for the property and repairs allowance
• Business or profession: profit and loss summary and supporting bank statements
• Financial assets: interest on savings certificates, FDRs and bank deposits, dividend income, with the tax deducted on each
• Capital gains: sale of land, buildings or shares, with purchase cost and sale deed
• Other sources: honorarium, freelance or foreign income

Step two: reconcile your wealth statement

The statement of assets and liabilities shows your net wealth at the end of the income year. The key test is simple: closing net wealth minus opening net wealth should equal total income for the year, plus exempt and tax-free receipts and gifts, minus tax paid and family living expenses. If the closing figure is higher than this formula allows, the difference looks like unexplained income.

Use last year's filed closing figures as this year's opening figures without changing them. If last year's statement was wrong, correct it openly through the proper procedure rather than silently adjusting the opening balance.

Step three: prepare the living expenses statement

Family expenditure is often underestimated. A realistic figure should cover food, rent or utilities, school fees, transport, travel, medical costs, social and festival spending, and tax paid. If you report a modest living cost while your bank statements show large card spending or foreign travel, the wealth reconciliation will not hold. Bank statements are the best starting point for estimating real spending.

Step four: compute tax, rebate and credits

With income totals ready, apply the tax-free threshold and slab rates in the current Finance Act, compute the investment tax rebate on eligible investments, and deduct tax already paid through TDS, AIT and advance tax. If tax deducted at source on a particular income is treated as final or minimum tax, separate that income in the computation. Our calculate income tax and rebate calculation pages explain these parts in detail.

Preparation mistakes we often correct

• Bank balances in the wealth statement that do not match year-end bank statements
• Savings certificates or FDRs encashed during the year but still shown as assets
• Loans from relatives shown without documentation or not shown at all
• Property recorded at market value instead of cost
• Cash in hand used as a balancing figure to make the reconciliation work
• Jointly owned assets shown in full by both spouses

How the process works

1. Collect last year's returnWe start from your previously filed return so opening wealth figures are fixed and consistent.
2. Build schedulesIncome schedules are built head by head, each linked to a source document.
3. Reconcile wealthAssets, liabilities and living expenses are reconciled and any gap is investigated with you.
4. Compute taxTax, investment rebate and credits for TDS and AIT are calculated under the current Finance Act.
5. Review with youWe go through the working papers together and fix anything unclear before the form is filled.
6. Hand over the fileYou receive a completed return and a working file ready for online or paper submission.

Typical timeline: Preparing a return usually takes a few working days for salaried individuals and one to two weeks where there are properties, business income or reconciliation gaps, depending on documents.

How Tax & VAT Associates helps

• Document checklist tailored to your income sources
• Head-wise income schedules with source references
• Statement of assets and liabilities and living expenses prepared and reconciled
• Tax, rebate and credit computation under the current Finance Act
• Review meeting to explain each figure before filing
• Organised working file you can keep for future audits

Frequently asked questions

Related services

Last reviewed: 6 October 2026. Bangladesh tax and regulatory rules change with each Finance Act, SRO and authority circular. This page is general guidance; confirm current requirements for your case before filing.