Why income tax return needs details of travel, tuition fees, credit bill including 9 expenditure

Throughout the year, you may make purchases and pay bills using your credit card for various purposes, spending a substantial amount of money in this way.

At the end of the year, when submitting your income tax return, you are required to declare these credit card expenses. You must also disclose how much you spent on travel, both within the country and abroad.

When submitting the annual income tax statement or return, taxpayers are required to disclose their lifestyle.

This includes reporting expenses such as travel and credit card usage. For this purpose, the National Board of Revenue (NBR) requires information under nine categories.

Taxpayers must submit a statement of lifestyle-related expenditure in Return Form IT-11C (2023). In this statement, expenditures must be shown category-wise.

Where any part of such expenditure is borne by another family member, this may also be mentioned in the remarks column.

The National Board of Revenue has divided annual expenditure into nine categories, details of which must be included in the income tax return. These are as follows:

The NBR defines this as personal and family maintenance expenses. Household expenditure is given primary importance.

Taxpayers must disclose how much they spent throughout the year to run their household. Tax officials use this information to assess a taxpayer’s standard of living.

This refers to housing expenses. All information related to rent must be provided, including how much was spent annually on rent and on the maintenance of the residence.

If the taxpayer owns a house or flat, maintenance costs must be declared. This is used to assess whether housing expenses are consistent with the taxpayer’s salary or income.

If the taxpayer owns a car, details of expenditure related to it must be disclosed. This includes fuel, maintenance, taxes and other charges.

If a driver is employed, the driver’s salary and allowances must also be reported. Tax officials assess whether the taxpayer’s income is sufficient to purchase and maintain a car.

Taxpayers pay monthly bills for electricity, gas, water, telephone, mobile phone and internet services. Records of these expenses must be maintained, as they must be shown when filing the annual return.

In many cases, taxpayers reported income does not appear consistent with their children’s education expenses, particularly where children attend expensive schools.

To assess this discrepancy, education-related expenditure must be disclosed. Overall, taxpayers should maintain records of education expenses for all family members.

Travel has become common among urban middle-class families. Many people travel both within the country and abroad. Expenditure is often incurred not only in cash but also through credit cards.

Staying at high-end resorts with family and friends is also common. Tax officials seek details of such expenses to determine how much a taxpayer spends on travel annually.

Many people purchase new clothes and other items during festivals, including Eid, Puja and the Bengali New Year, leading to increased expenditure.

During Eid, taxpayers may receive bonuses in addition to their regular salary, resulting in higher spending on shopping for family members as well as relatives.

 Taxpayers should be aware that Eid and other festival-related expenses must be declared in their income tax records under the festival expenditure section.

Throughout the year, tax may be deducted at source on various expenditures. These amounts must be recorded. In addition, tax deducted on profits from savings certificates must be declared.

The amount of income tax and surcharge paid in the previous year based on the filed return must also be reported.

Taxpayers often take loans from banks, financial institutions or other sources for various purposes and must pay interest on these loans. The total amount of interest paid during the year must also be disclosed.