Many taxpayers in Bangladesh often feel anxious upon receiving a notice that their income tax return has been selected for an audit. The term “audit” commonly triggers concerns of potential tax evasion accusations, increased tax liabilities, or contentious interactions with tax authorities.
However, it is crucial to understand that an audit is primarily a verification process where tax authorities scrutinize disclosed income, expenses, assets, liabilities, investments, and financial transactions to ensure accuracy, consistency, and supported evidence.
Recently, the National Board of Revenue selected over 90,000 income tax returns filed for the 2023–24 assessment year for audit using an automated random-selection method, drawing significant public attention. In response, the NBR cautioned taxpayers about scammers falsely claiming audit selection and demanding money to remove names from the process.
The audit process is outlined in Section 182 of the Income Tax Act 2023. Upon selection for audit, the Deputy Commissioner of Taxes must inform the taxpayer of the reasons for the audit under Section 182(4). If discrepancies are found, the Deputy Commissioner will send an audit report to the taxpayer, requesting a revised return with explanations and supporting evidence per Section 182(5).
If the revised return aligns with audit findings and all tax obligations are met, the Deputy Commissioner will conclude the audit. However, unsatisfactory revisions or non-compliance may lead to assessments under Section 183 or 184.
Additionally, there is a two-year time limit for audits from the tax year-end when the return was filed. Taxpayers must verify the authenticity of audit notices, ensuring they are issued through official channels with specific details such as assessment year, tax circle, required documents, and submission deadlines.
Payments should only be made through approved channels, not personal accounts or mobile services like bKash, Rocket, or Nagad. Suspicious communications should be reported, preserving all related information for evidence.
Preparing a detailed response is essential, especially for individual and business taxpayers who must gather various documents such as bank statements, investment records, property deeds, and financial statements. Bank transactions are scrutinized closely, requiring explanations and supporting evidence for deposits.
A structured and evidence-based response to audit queries is crucial. Taxpayers should address each question, provide numbered supporting documents and retain copies for reference. Professional assistance may be sought for complex cases, but taxpayers should remain actively involved in the process.
Timely and accurate responses to audit notices are key to resolving discrepancies and avoiding penalties or legal issues. The audit process should be fair, transparent, and objective, fostering voluntary compliance and public trust. Ultimately, an audit presents an opportunity to ensure return accuracy and compliance, emphasizing the importance of preparation, documentation, and confidence in factual accuracy.
