5 mistakes to avoid when filing tax returns for the first time

When filing an income tax return for the first time, one must proceed with caution. Many individuals do not file correctly or strategically, which later causes difficulties.

A number of first-time filers are unaware of what exactly must be declared. Submitting incorrect information initially often results in significant penalties.

Please note that this year you will be declaring your income and expenditure for the period from July 2024 to June 2025.

The following are five mistakes that must not be made when submitting a first return:

Whatever amount of cash you have in hand, declare it in full. Many believe that declaring a larger amount of cash may cause complications. This assumption is incorrect. If your income is legitimate, there is no cause for concern. In the tax return form, declare the amount under ‘Cash in Hand’. 

Even if you did not previously have a Taxpayer Identification Number (TIN) and have never filed a return, but have invested for several years in savings certificates, deposit pension schemes (DPS), fixed deposits (FDRs), or shares, these must now be declared in your return. Such assets must be shown under the “Financial Instruments” section of the return form.

If you own property such as land or flats in your name, you must disclose this to the National Board of Revenue (NBR). Even if the property was received by inheritance, as a gift, or by donation, it must still be declared in the return. It should be noted that if the total value of your assets exceeds 5 million (50 lakh) taka, you are required to submit a separate statement of assets. Form IT-10B must be used for this purpose.

If you own a car, motorbike, or similar asset in your name, you must include it in your tax documents. This is because advance income tax is paid annually on vehicles. At the end of the year, when you submit your return, this advance payment may be adjusted against your payable tax. Declaring a vehicle is therefore also advantageous.

When filing a return for the first time, all taxpayers, whether male or female, must declare gold ornaments and valuable jewellery. This includes jewellery received as a gift. Many female taxpayers possess diamond or other precious stone jewellery in addition to gold. These must not be overlooked in the first return.

Alongside cash, any assets declared in the first return must be supported by an explanation of how they were acquired. The sources of income must also be detailed. Appropriate documentary evidence should be maintained in support of these assets.