1.0 PAYROLL TAX RULE

Tax rule is maintained by the Taxpayer category.

Here is an example of the tax rule for a category.

Different rules are explained below:

1.1 Taxpayer category

• Male
• Female
• 65 years old
• Disabled
• Gender diversified
• Freedom fighter

Tax residency

The options are Bangladeshi resident, Bangladeshi non-resident, Foreigner resident and Foreigner non-resident

1.2 Income year

The income year and assessment year are defined and linked

Min tax applicable

Check this option if the minimum tax is applicable for the category. However, if the minimum tax varies from region or region then

Min tax by region

User-definable tax region and company's operating location mapped with the minimum tax. Employees are mapped to minimum tax through respective operating locations.

1.3 Disable dependent allowance

Check this option if there is any deductible allowed from total income during the assessment year. When checked, a field will appear to enter the amount. Disable dependent allowance is deducted from the total income to calculate the taxable income.

1.4 Income exemption rule

Income exempt

Check this option if the rule for income exemption from income tax is applicable.

Exempt type

Option: "Portion of total income and max amount smaller" The rule works as follows: The total income of the assessee is divided by the "Income portion devisor" value you enter but the max amount would be from "Max exempt amt"

1.5 Employee self-service update

Each employee may have a self-service menu access to update the following information directly. This information will be then used to update employees related information.

Tax identification and other personal information related to income tax

Investment to recognized fund

Employees will have the option to update Tax recognized investment and upload the image of the document in pdf file format.

1.6 Tax rate table

Table to define respective 0 (zero) tax slab and incremental taxable income with the respective rate of tax.

1.6 Investment tax credit/rebate rule

Check if the Investment tax credit/rebate is applicable when this rule is used in any tax rules

Calculation: Whichever is lower from the following three

1. "Total income" x "Invest max percent on inc" / 100 x "Tax credit percent"
2. "Total income" x "Income percent as base" / 100
3. "Max rebate amount"

As per the income year 2023-24/assessment year 2024-25 the calculation is as follows:

1. 20% of total income x 15% (actual investment in recognized category of investment which is max 20% of income).
2. 3% of total income
3. Max rebate amount of BDT10,00,000

whichever above is lower to be deducted from the calculated tax but the tax amount will not go below the respective employee's minimum tax applicable.

Last month calc invest base

Use this option to select the following two options:

1. Investment is considered in full with the assumption that the respective employees are investing in full without capturing employee-wise details of investments
2. Actual investment - in this case, every employee's actual investment has to be updated. During the last month's tax calculation, the tax engine will take only the extent of actual investment by respective employees (not exceeding the max amount). Accordingly, the investment tax credit amount will be adjusted if applicable.

2.0 INCOME AND TAXABLE INCOME CALCULATION

Tax estimate configuration helps managing different allowances to keep in / outside the payroll tax calculation.

You have complete control over the allowances being created in payroll module while your tax expert is managing the tax strategies for employees within the income tax module.

When you calculate Tax, systems first checks if there are pending configuration related to new allowances as follows:

• Checks if there is any new Allowances created but not included in Tax estimate configuration or
• Allowances automatically included but it has not yet been validated by the tax admin.

The system shows such records in highlighted colour indicating those allowances require validation.

2.1 Total income calculation

Total income comprises Salary, Bonus, and other allowances as may be selected for tax purposes as below:

Go to the "Tax estimate config" menu. You can select what are the allowances and deductions to be part of the total income calculation. If you select all from the radio button then you do not need to select from the table. Otherwise, you can select item by item.

The same is to bonuses, you can select which bonuses are to be part of income calculation.

2.2 One-time income (Actual only)

When you have some components of income which are not paid every month and you do not want to distribute the related income tax amount across 12 months but calculate and deduct the income tax during the month when paid then you select the following option:

For example, performance bonus, special incentives etc.

How it works?

1. Taxable income calculation is based on the actual salary from the Salary processed and payment created + Estimated income for the rest of the months of the year.
2. When you process the salary, actual income of the allowances marked for actual income only is added up to the total earnings and income tax is calculated.
3. The difference between 2 and 1 above is added to the tax deduction of the current month

3.0 TAX CALCULATION

3.1 Empl tax identification

First "refresh" the list of employees for which you want to calculate the income tax for the year from menu path: INCOME TAX Bangladesh > Empl tax identification.

When you click on the refresh button, you will be prompted with a withdrawal to enter minimum income. AFter you enter the amount and click OK, the system will add all the employees whose monthly salary is more than the amount entered.

3.2 Fixed tax

You can define any employee whose tax is fixed or calculated outside the payroll system.

When you indicate fixed tax and process computation, they will skip detailed calculation of income tax for the employee and update only what is pre-determined.

3.3 Tax computation

After you have finished step 3.1 as well as your tax rules are upto date, you can click "ReCalculate" to calculate income and all other related information. Then the system will complete the calculation of income tax, rebates, tax payable, and monthly deduction amount.

The monthly tax computation amount will be automatically captured by the systems in payroll processing and deducted accordingly.

4.0 TAX DEDUCTION FROM PAYROLL (TDS)

Income tax will be calculated every month, especially when the team is not busy with payroll calculations.

4.1 TDS by external authorities

Any TDS paid by the employee during the income year, information will be updated in the following user screen ("Empl Tds external").

There is an option to upload the payment certificate in pdf file format.

5.0 TDS Deposit / TREASURY CHALLAN

Record the treasury challan when the TDS income tax is deposited into the central bank. When created, after selecting the company and the income year,

1. the system will automatically calculate the total amount collected from employees salary as income tax deduction, total amount paid to the treasury for the income year and net amount payable.
2. Load employees and their respective TDS amount, paid amount etc.

Paid amount is automatically distributed across employees.

The auto distribution has following control and functionalities:

• Option to pay in full for selection of employees
• Refund amount, if any, is also populated in the screen to ensure data integrity

6.0 Refund of excess deduction

At the financial year end, when the new tax rule is published after the salary is processed, an option to recalculate tax and refund, if any, to employees outside payroll.

Recalculate tax after the year-end (if the salary is already processed for the last month of the income year) and generate refund advice for excess tax deducted, if any. Short-deduction will not be adjusted. This refund will be paid outside the payroll, but the tax amount will be netted off to calculate payment to the treasury. this refund calc will be done before the last payment to the treasury for the income year

6.1 Calculate refund

Create a Tax refund document and save. In List screen select the refund document line and click on "Calculate refund" to have the refunds calculated automatically:

6.2

Display the detail screen to check or filter different employees having such refunds and payment status.

7.0 RETURN SUBMISSION

7.1 Proof of submission of return

Option to update the return submission information.

7.2 List of employees not submitted the return

This tab shows the list of tax payers not submitted the tax return submission information yet with the company. When submitted this list is updated automatically.

8.0 TAX CERTIFICATE AND REPORTS