I get this question more than almost any other.
“Rifat bhai, my income is below the taxable limit. Can I just file a zero return to stay compliant?”
I understand why people think this way. For years, there was a grey area. Some tax offices accepted minimal returns without much scrutiny. Taxpayers assumed that as long as they submitted something, they were safe.
That assumption is now legally dangerous.
The National Board of Revenue has made its position clear: there is no provision for a zero return under the Income Tax Act 2023. Filing one is not just incorrect. Under the law, it can be treated as a false or incomplete declaration.
Let me explain exactly what the law says, why this matters, and what you should do instead.
What Is a Zero Return and Why Do People File It?
A zero return is when a taxpayer submits an income tax return showing zero income, zero assets, and zero liabilities. Everything blank. Everything zero.
People file zero returns for various reasons:
- They have a TIN but believe their income is too low to matter
- They need to satisfy a PSR (Proof of Submission of Return) requirement for a bank, government tender, or trade license
- They think it is better to submit something rather than nothing
- They genuinely do not know what they are supposed to declare
The intention is usually not to deceive. Most people filing zero returns are trying to stay out of trouble, not create it. But the law does not distinguish between intent and outcome when it comes to the accuracy of a return.
What Does the Income Tax Act 2023 Actually Say?
This is the part that most taxpayers and even some practitioners have not fully absorbed yet.
Section 166 of the Income Tax Act 2023 requires every taxpayer to submit a return containing a true and complete statement of:
- Total income from all sources
- Total expenditures
- All assets, wherever located
- All liabilities
The phrase that matters here is “true and complete.” A return with all fields at zero is not true and complete for anyone who has a bank account, owns a mobile phone, holds any property, earns any income, or has any financial existence at all.
The NBR has explicitly stated that there is no legal provision for a zero return under this act. Filing one is treated as a failure to comply with Section 166.
What Are the Legal Consequences?
This is where people need to pay close attention.
Filing a false or incomplete return is not a minor administrative issue under the Income Tax Act 2023. Two sections are directly relevant here.
Section 312 deals with tax evasion. If a taxpayer deliberately suppresses income or conceals assets to avoid paying tax, this section applies. Penalties under this section can be significant, including financial charges calculated on the evaded amount.
Section 313 covers providing false information to the tax authority. A zero return filed by someone who clearly has income, savings, or assets falls squarely into this category.
In serious cases, both sections provide for criminal prosecution. That means not just financial penalties, but the possibility of imprisonment.
Even if it never reaches that level, an inaccurate return flags your file for scrutiny. Once flagged, the NBR can examine all your previous returns, demand supporting documents, and issue formal notices. If you have ever received one of those, you know the stress it creates. If you have not, this guide on handling NBR notices explains what to expect and how to respond.
“But My Income Is Below the Taxable Threshold. Why Does It Still Matter?”
This is the most common pushback I hear. And it is a fair question.
Here is the answer: the return is not just a tax payment document. It is a legal declaration of your financial position.
Even if you owe zero tax, you are required by law to truthfully report what you earned, what you own, and what you owe. The tax calculation is one part of the return. The financial disclosure is another. Both are mandatory.
There is a second reason this matters. The NBR uses return data to track consistency across multiple years. If your returns show zero assets for three consecutive years and you then declare a significant property or bank balance in year four, that inconsistency triggers a review of all prior years. Explaining a sudden jump becomes your problem.
Filing accurately every year, even when your income is modest, creates a clean and consistent financial history. That protects you in the long run far more than a zero return ever could.
Who Is Most at Risk from This?
In my experience, the following groups are most commonly caught in the zero return trap:
TIN holders who opened it for specific purposes. Many people in Bangladesh get a TIN because it is required for a bank account, trade license, land registration, or government contract. They are not active business operators. Their income may be small. But they still have financial activity, and that activity must be declared.
Freelancers and part-time earners. Someone earning BDT 20,000 per month from freelance work might think their income is too low to bother with. But BDT 20,000 per month is BDT 2,40,000 per year. That is a real income figure that belongs in a return, even if it falls below the taxable threshold.
Small farmers and traders. Agricultural income has specific exemptions under Bangladesh tax law, but those exemptions apply to declared income, not hidden income. We will cover this in detail in an upcoming post on poultry and hatchery tax exemptions.
Employees whose employer handles withholding. Some salaried employees assume that because their employer deducts tax at source, they have no further obligation. That is not correct. You still need to file a personal return that reflects your full financial position.
What Should an Accurate Return Actually Include?
Even if your income is genuinely small and you owe no tax, your return should reflect your real financial situation. Here is what a typical individual return should cover:
Income sources: Salary, freelance income, rental income, agricultural income, business profit, interest from savings accounts. All of it, even if small.
Bank balances: All accounts in your name, including savings accounts, current accounts, and fixed deposits.
Property: Any land, apartment, or building registered in your name, including inherited property.
Vehicles: Cars, motorcycles, or other registered vehicles.
Investments: Shares, bonds, savings certificates, DPS accounts.
Liabilities: Loans from banks, financial institutions, or individuals.
None of this means you will be taxed on all of it. It simply means your return is honest and complete. If everything genuinely adds up to a modest picture, that is fine. An honest modest return is entirely valid. A zero return almost never is.
What If You Have Already Filed Zero Returns in the Past?
This is the situation I deal with most often when new clients come to me.
They filed zero returns for two, three, sometimes five years. Now they are worried. They have heard about stricter enforcement. They want to fix it but are not sure how or whether fixing it will make things worse.
Here is my honest advice: act proactively, not reactively.
Bangladesh’s tax law allows for corrected and revised returns in certain circumstances. The earlier you address the issue, the more options you have and the lower the risk of a serious consequence. Waiting until the NBR contacts you significantly limits your position.
I have helped many clients regularise years of incorrect filings. In most cases, when approached early and handled professionally, the outcome is manageable. But when people wait until a notice arrives, the process becomes more complex and more expensive.
If you have already received a notice related to your returns, this guide walks you through exactly what to do next. If you have not received a notice yet but know your past returns were not accurate, now is the right time to act.
The Right Way to Reduce Your Tax Is Not to Hide Income
I want to be clear about one thing. There is a perfectly legal way to reduce your tax burden in Bangladesh. It is called tax planning, and it involves using the exemptions, deductions, and rebates that the law explicitly provides.
You can significantly reduce what you owe by investing in life insurance, provident funds, DPS accounts, government securities, and other approved instruments. The law rewards these choices with direct rebates on your tax liability. This guide on tax rebates and investment breaks down exactly how the rebate system works and how much you can save legally.
Tax planning is smart. Tax evasion is a risk no one should take.
Filing a zero return when you have real income and real assets is evasion, even if unintentional. The Income Tax Act 2023 and the National Board of Revenue are both very clear on this. The enforcement is getting more systematic, not less.
Final Word
The zero return era in Bangladesh is over.
The Income Tax Act 2023 sets a clear standard: your return must be true and complete. That standard applies whether your income is BDT 50,000 or BDT 50,00,000. The threshold determines whether you pay tax. It does not determine whether you need to disclose.
If you have a TIN, you have a filing obligation. Meet that obligation honestly.
If you are unsure what to include in your return, how to handle prior incorrect filings, or how to structure your finances to minimise your legal tax burden, I am here to help.
You can book a consultation or visit the income tax services page to understand how I work with individual taxpayers across Bangladesh. Getting it right is always easier and cheaper than fixing it later.