Failure to file tax returns may lead to disconnection of gas, electricity

A penalty of 10 percent of the last assessed income will be imposed if a return is not filed without “reasonable” cause

Only 12 days remain before the expiry of the second extension granted by the National Board of Revenue (NBR) for individual taxpayers to file their income tax returns.

A failure to submit income tax returns or statements for the 2025-26 assessment year within the NBR-mandated timeframe may result in the disconnection of essential services, such as gas, electricity, water, and internet.

Tax officials are vested with the authority to take such actions.

This power is granted to tax officials under existing income tax laws; consequently, they may disconnect any service connection in the event of a legal breach.

Furthermore, taxpayers will be liable to pay penalties, additional taxes, and other associated fees.

LEGAL PROVISIONS UNDER THE LAW

Fines under Section 266: The law stipulates that if a taxpayer fails to file a return without reasonable cause, a penalty of 10 percent of their last assessed income may be imposed.

The fine, however, will not be less than Tk 1,000.

In addition, if the failure to file persists, the relevant deputy tax commissioner can also levy a daily fine of Tk 50.

There are two specific conditions regarding these penalties:

For those whose tax has never been assessed before, the maximum fine is Tk 5,000.

For those previously assessed, the penalty will be either 50 percent of the tax payable on their last assessed income or Tk 1,000, whichever is higher.

Reduction of tax exemptions under Section 174: As a punitive measure, the tax exemptions an individual would typically receive against various investments will be reduced.

In addition to fines, a taxpayer will face an extra tax burden of 2 percent per month on the unpaid amount.

Tax officials are also empowered to disconnect any essential service connections under this provision.

Failure to file a return may also lead to complications in receiving salaries and allowances.

The deadline for submitting income tax returns for the current assessment year is Jan 31.

The original deadline was Nov 30, which was first extended to Dec 31 before the NBR granted this extension.