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Tax Filing:

Every business or company must file the tax returns (FORM BIT-2 for BIT payers and FORM CIT-2 for CIT payers), on a self assessed basis to the RRCO of registration before 31st March following the end of the income year.

Taxpayer Number (TPN):

TPN is a system generated alpha numeric number allotted to the taxpayers by the RRCO at the time of registration. It is issued in order to identify all tax transactions relating to a particular tax entity. TPN must be quoted as a reference in all the correspondences with the department to identify the taxpayer.

Personal Income Tax:

What is Personal Income Tax (PIT)?

PIT is a tax levied on the personal income of an individual from any or more of the six sources namely; salary income, rental income, dividend income, cash crop income, interest income and income from other sources i.e. hire of privately owned vehicles, plants, machinery and from intellectual property rights.

Who is liable to pay Personal Income Tax?

Bhutanese citizens
Residents
Any other persons earning income in Bhutan from the six sources mentioned above shall be liable to pay PIT

Who should register for Personal Income Tax?

All citizens above 18 years of age and residents having personal income from one or more of the six sources during an income year shall register by filling the registration FORM PIT-1. The duly filled registration form shall be submitted to the RRCO where you prefer to be registered as the taxpayer. In case of married couples, both the spouses must choose the same RRCO for registration.

How many regional offices are there to choose the most convenient RRCO for registration?
SI.No RRCO Dzongkhags

1 Thimphu Thimphu,Punakha,Wangdue Phodrang and Gasa
2 Paro Paro and Haa
3 Phuentsholing Chukha
4 Samtse Samtse
5 Gelephu Sarpang,Tsirang,and Dagana
6 Samdrup Jongkhar Samdrup Jongkhar and Pemagatshel
7 Mongar Trashigang, Lhuentse, Tashi Yangtse and Mongar
8 Bumthang Bumthang, Trongsa and Zhemgang

What are the primary documents required at the time of Registration?

A copy of the Citizenship Identity (CID) number for a citizen and Registration Permit Number (issued by the Department of Immigration and Census) for a resident is compulsorily required to enable you to register as the PIT Payer.

How often can the registration be changed?

There is no restriction imposed on the frequency of the change in registration. Anyone can change the registration as many times as you desire provided a written application is submitted to the RRCO of registration no later than 2 months before the end of the income year.

Who should file the tax return?

All citizens and residents having taxable income exceeding Nu. 100,000 per annum must file the tax return as per the FORM PIT-2 with the RRCO of registration before 1st March following the income year. An authorized representative can also file the tax return on behalf of the taxpayer
What are the main supporting documents required at the time of filing?

Salary Income

Complete TDS Certificates from the employer with proof of PF and GIS deduction

Rental Income

Complete TDS Certificates
Ownership Certificate (one time unless the ownership is changed)
Loan Statement for Interest paid on loans
Receipt for Insurance premium, municipal taxes (Land and House tax) paid

Dividend Income

Complete TDS Certificates
Loan Statement for Interest paid on Loans

Interest Income

Complete TDS Certificates

Income from Other Sources

Complete TDS Certificates

General Deductions

Proof of Insurance Premium paid
Proof of donations made
Proof of educational expenses claimed

Other requirements

A copy of CID for first time filers
Saving Bank Account Number
Authorization letter if filed by representative

Tax Deducted at Source:

TDS is a preliminary estimate of tax liability payable on a �Pay as You Earn� basis. It is not a separate or new form of tax, but a mode of collection on a current income basis, to ease the burden of tax payment at the end of the year. It is deducted at source by a withholding agent and deposited to RRCOs for adjustment with the final tax liability.

Purpose:

To ease the burden of tax payment
Ensure effective collection of taxes
Timely mobilization of internal revenue
To provide information on assessment

Liability to TDS:

Contractors under Full Tax Liability 2% of the gross amount
Contractors under Limited Tax Liability 3% of the gross amount

Tax Clearance Certificate (TCC):

A Tax Clearance Certificate (TCC) is a written confirmation certifying that a persons tax affairs are up to date and that no taxes are due to the department as at the date of issue of the certificate.


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