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1. Income from business & profession
U/S 28,29,30,30A
“Definition of “Business” u/s 2(14)
“Business” includes –
Trade, commerce or manufacture or
Adventure or concern in the nature of trade, commerce or
manufacture
Definition of “Profession” u/s 2(49)
“Profession” includes a vocation.The term vocation refers to any
activity on which a person spends a major part of his time in order
to earn his livlihood.

2. Scope of Income from Business or Profession
Scope of ‘Income from Business or Profession’: u/s 28
•Profit or gains of any business or profession carried on or deemed to be carried
on by the assessee [u/s 28(1)(a)].
•Income derived by any trade or professional association or other association of
like nature on account of specific services performed for its members [u/s
28(1)(b)].
•Value of any benefit or perquisite, whether convertible into money or not, arising
from business or profession [u/s 28(1)(c)].
•Deemed income from business or profession
•Partially ‘income from business or profession’
Partially ‘income from business or profession [u/s 26(3) and Rules 30, 31 and
32]:
(i) 40% of income from sale of tea [under rule 31]
(ii) 40% of income from sale of rubber [under rule 32]
(iii)Tobacco, sugarcane or other agricultural produce used as raw materials in any
industrial production process the income of which is to be computed under the head
‘Income from Business or Profession’ as follows [under rule 30]:
Business income = (Sale value of the concerned agricultural produce recorded in the
accounts of the business) – (Market value of the agricultural produce used as raw
materials).

3. Deemed income in Business or profession
•Deemed income from business or profession u/s 19:
•Subsequent receipt back of any loss, bad debt or expenditure [u/s 19(15)(a) and 28(1)(d)].
•Interest on loan from commercial or specialised banks or share of profit to Islamic bank
unpaid for two years [u/s 19(15)(aa) and 28(1)(d)].
•Benefit received from any trading liability [u/s 19(15)(b) and 28(1)(d)].
•Trading liability unpaid for three years [u/s 19(15)(c) and 28(1)(d)].
•Revenue gain/balancing charge or depreciation recovery from disposal of any building,
machinery or plant used for business or profession [u/s 19(16) and 28(1)(e)];
Maximum amount = Original Cost – Written down value (WDV).
•Insurance, salvage or compensation money received on discarding, demolishing or
destroying any building, machinery or plant used for business or profession [u/s 19(18) and
28(1)(f)];
Maximum amount = (Original Cost – WDV) – Scrap value.
•Sale proceeds of any capital expenditure on scientific research which is allowed as a
deduction u/s 29(1)(xx) [u/s 19(20) and 28(1)(g)].
•Export value of garments exportable against the export quota which has been transferred
[u/s 19(23) and 28(1)(h)]. Under rule 30A, an amount equal to 3% of the export value of the
garments exportable against the export quota transferred by the assessee shall be
deemed to be his income u/ 19(23).
•Profits and gains from any insurance business carried on by a mutual insurance
association the income of which is to be computed under paragraph-8 of Fourth Schedule
[u/s 19(14)].
•Profits and gains from any discontinued business [u/s 19(6), see also sec. 89].

4. Allowable Deductions to Determine Taxable
‘Income from Business or Profession’
•Rent for the premises used for business or profession [u/s 29(1)(i)].
•Repair expense incurred by the assessee: For the hired premises in which
the business or profession is carried on [u/s 29(1)(ii)]. For the buildings,
machinery, plant or furniture used for business or professional purposes
[u/s 29(1)(vi)].
•Interest payment or profit shared with an Islamic bank in respect of capital
borrowed for business or profession [u/s 29(1)(iii)].
•Amount credited to any person’s profit sharing account or deposit with an
Islamic bank by way of distribution of profit by that Islamic bank [u/s
29(1)(iv)]. (Applicable for only islamic shariah based banks.)
•Amount up to 5% of total income carried to any special reserve (the
aggregate amount in which does not exceed the paid up share capital)
created by Government approved financial institutions for any approved
purposes [u/s 29(1)(v)].

5. Allowable Deductions to Determine Taxable
Income from Business or Profession
•Insurance premium on buildings, machinery, plant or furniture, stocks or stores
used for business or professional purposes [u/s 29(1)(vii)].
•Depreciation on the assessee’s building, machinery, plant or furniture used for
business or professional purposes as per Third Schedule [u/s 29(1)(viii)]:
Initial depreciation allowance: From assessment year 2002-03, under paragraph
5A of the Third Schedule, initial depreciation allowance is allowed for the first year
at 10% on the cost of building and 25% on the cost of machinery or plant (other
than ships or motor vehicles not plying for hire or any machinery or plant which has
previously been used in Bangladesh).
Accelerated depreciation allowance: From assessment year 2006-07, under
paragraph 7 of the Third Schedule, 50%, 30% and 20% of cost of machinery is
admissible as accelerated depreciation allowance for first, second and third years
respectively, for new industrial undertakings in cases of prescribed sectors.
Normal depreciation allowance: The normal depreciation allowance under
paragraph 3 of the Third Schedule is allowed at the specified rates on ‘written down
value’ of the concerned asset.

6. Allowable Deductions to Determine Taxable Income
from Business or Profession
•Obsolescence allowance [equal to excess of written down value (WDV) over sale
proceeds or scrap value] :
•Allowance for disabled or dead animals: Write-off allowance [equal to the
difference between the original cost of the animal and the money from sale or
other disposition of the carcass]:
•Land development tax or rent, local rates or municipal taxes for the premises
used for business or professional purposes [u/s 29(1)(xiii)].
•Bonus including festival bonus and commission paid to employee
(Bonus other than festival bonus and commission is reasonable with reference to
general practice of similar business or profession, profit of the organization and
the pay and other conditions of service of the employee) [u/s 29(1)(xiv)].
•Bad debts:Bad debts actually written off in the income year as an established
irrecoverable item [u/s 29(1)(xv)].
•Old bad debts:Bad debts prematurely written off but allowed as a deduction in
subsequent year when established to have been irrecoverable [u/s 29(1)(xvi)].
•Additional bad debt: If DCT satisfies debt become irrecoverable in earlier year
but not proceeding four years

7. Allowable Deductions to Determine Taxable
Income from Business or Profession
•Provision for bad debts :
•Provision for bad and doubtful debts by and interest thereon made by a Commercial
Bank, BSRS,Shilpa bank for 5% and 1% for RAKUB, Karma Shastanbank and Krisi
bank
•Expenditure on Scientific research or for research institute :
•Revenue expenditure on scientific research in Bangladesh related business [u/s
29(1)(xix)].
•Capital expenditure on Scientific research in Bangladesh related to business [u/s
29(1)(xx)].
•Donation to research body: Amount paid to approved Scientific Research
Institute, Association or other body or to approved University, College, Technical
School or other Institute for the purpose of Scientific research or technical training
related to relevant business – class [u/s 29(1)(xxi)].
•Payment to educational institution or Hospital:
Expenditure laid out or expended on any Educational Institution or Hospital
established for the benefit of assessee’s employee’s their families and dependents
or on the training of industrial worker

8. Allowable Deductions to Determine Taxable
Income from Business or Profession
•sDonation to educational institution or Hospital:
Expenditure laid out or expended on any Educational Institution or Hospital
established for the benefit of assessee’s employee’s their families and
dependents or on the training of industrial worker
•Expenditure on training of Bangladeshi citizens in connection with a
scheme approved by NBR [u/s 29(1)(xxiv)].
•Expenditure (not being capital or personal) on visits abroad as a member
of a trade delegation sponsored by the Government [u/s 29(1)(xxv)].
•Annual membership subscription to a registered trade organization or to
a professional institution [u/s 29(1)(xxvi)].
•Other Revenue expenditure:

9. List of Deductions Inadmissible u/s 30
•Payment of salary, if tax thereon has not been deducted at source u/s 50 [vide u/s
30(a)].
•Any payment subject to deduction of income tax or VAT (value added tax), but
these taxes are not deducted at the time of payment [u/s 30(aa)].
•Payment of interest, salary, commission or remuneration made by a firm or an
AOP (association of persons) to its partners or members [u/s 30(b)].
•Payment of brokerage or commission to a non-resident person without deduction
of tax at source u/s 56 [vide u/s 30(c)].
•Payment to employees’ provident fund or other funds unless effective
arrangement has been made for deduction of tax at source while making the
payments from the fund which are taxable under the head “Salaries” [u/s 30(d)].
•Payment of perquisites or other benefits to an employee in excess of Tk. 2,50,000
[u/s 30(e)]. But this provision is not applicable to employer where perquisites or
other benefits were paid to an employee according to Government decision
published in the official Gazette to implement the recommendation of a Wage
Board constituted by the Government [Proviso to sec. 30(e)].

10. List of Deductions Inadmissible u/s 30
Profits, income and gains before
considering entertainment expenditure
Admissible deduction
a) First Tk. 10 lakh 4% of the above profit, income and gains
b) On the balance 2% of the above profit, income and gains
•Entertainment expenditure exceeding the limits specified below as per Rule 65
[vide u/s 30(f)(i)]:*
•Expenditure on foreign travels of employees and their dependents (spouse and
minor children including step and adopted children) for holidaying and recreation
exceeding the limit under Rule 65A [vide u/s 30(f)(ii)]: 3 months’ basic salary, or ¾
th of the actual expenditure, whichever is less and the foreign travels shall not be
oftener than once in every 2 years.
Publicity and advertisement (illegal and capital type) [u/s 30(f)(iii

11. List of Deductions Inadmissible u/s 30
Turnover
Deduction for expenses for free sample as
% of turnover
Pharmaceutical
Industry
Other Industry
Up to Tk. 5 crore 2 % 1.5%
Exceeding Tk. 5 crore, but up to
Tk. 10 crore
1 % 0.75%
Exceeding Tk. 10 crore 0.5% 0.375%
•Distribution of free samples exceeding the following limit as per Rule 65C [vide
u/s 30(f)(iv)]:

12. List of Deductions Inadmissible u/s 30
•Head Office expenses: Expenditure exceeding 10% of the profit under the head
of ‘Head Office expenses’ by a company, not incorporated in Bangladesh under
the Companies Act 1994 [u/s 30(g), inserted by the FA 2003]. Here, the profit will
be profit before charging this expenditure.*
•Royalty or technical expenses: Payment by way of royalty, technical services
fee, technical know how fee or technical assistance fee exceeding 8% of the profit
[u/s 30(h), inserted by the FA 2003]. Here, the profit will be profit before charging
this expenditure.*
•Salary not through bank: Payment by way of salary or remuneration made
otherwise than by crossed cheque or bank transfer by a person to an employee
having gross monthly salary of Taka 15,000 or more [u/s 30(i), inserted by the FA
2006].
•Incentive bonus: Expenditure by way of incentive bonus exceeding 10% of the
disclosed net profit [u/s 30(j), inserted by the FA 2006].
•Overseas traveling: Expenditure by way of overseas travelling exceeding 1% of
the disclosed turnover [u/s 30(k), inserted by the FA 2006].
•These three types of expenses are to be computed as a percent of profit
before charging all these three expenses.

13. Income from Business or Profession at a glance
Description Tk Tk
Net income as per the profit and loss Account
Add: Expenses that are not allowed
Add: Income under the head of business and
profession that are not included earlier
Less: Expenses that are allowed(not debited in
P/L account)
Total income
Less: Income that are not from business or
profession(already credited tin P/L account)
Taxable income from business or profession
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