A notification signed by the Finance Minister Namgay Tshering notified all the ‘real’ property owners to declare the annual rental income correctly while filing the PIT returns for the Income Year 2021.
It said the Ministry shall cross verify the rental income declared against the information gathered during the year from relevant stakeholders as well as with the rental information collated during the physical verifications conducted by the regional offices.
Lyonpo said the Regional Revenue and Customs Office (RRCO) shall carry out physical verification of the rental income declared at any point of tie after the tax filing. Discrepancies shall be dealt seriously as per the provisions for the Income Tax Act, 2001.
The notification from Lyonpo said as required under Rule No.35(2)(c), Part III of the Rules on the Income Tax Act of the Kingdom of Bhutan 2001 (fifth edition), the property owners must issue money receipts for the rental or lease income received.
It said the Ministry would like to urge all the concerned property owners to continue issuing money receipts not only for tax purpose, but also to facilitate proper accounting of the income at the time for tax filing. The receipt must be serially numbered and printed in duplicate copies.
Original copy should be issued to the tenant and the duplicate copy must be retained by the property owner for verification by the RRCO at any point of time.
Property remaining vacant should be informed in writing within 15 days to the RRCO where the landlord is registered as a taxpayer. This is in accordance with Rule No. 35(2)(b)(ii) of the Rules on the Income Tax Act of the Kingdom of Bhutan 2001 (fifth edition).
The Ministry said it would like to urge all the property owners not to solicit unlawful support from the tenants in misinforming the Department of Revenue and Customs (DRC) on the monthly rent waiver or discount.
The property owners are requested to declare the actual rent collected and if there are any waiver or discounts granted, maintain a proper documentary proof with signatures of the tenants for submission to the RRCO at the time of filing.
It said noncompliance with this notification shall attract fines and penalties as per Chapter 5 and could face prosecution as per Section 36, Chapter 5, General Provisions of the Income Tax Act, 2001.
The letter was copied to the DRC and RRCO offices in Bumthang, Gelephu, Mongar, Paro, Phuentsholing, Samtse, Samdrupjongkhar and Thimphu for information and compliance.
This notification comes as there have been complaints from the public that landlords have not given the waivers, and also as the government in increasingly short of revenue.