This document summarizes key aspects of income tax in Bangladesh. It outlines different types of taxpayers and their tax-free income limits. It then describes various types of income that are taxed, including salary income and the treatment of items like bonuses, allowances, and retirement contributions. It also discusses taxation of income from property, agriculture, capital gains, and exempted capital gains. The document concludes by covering tax avoidance in Bangladesh and strategies to prevent tax evasion and avoidance.

1. Bangladesh Income Tax

2.  Sohag Alam Suman ID-1330565
 Md. Rakibul Hasib ID-1330442
 Mithila Farjana ID-1330988
MEMBERS:

3.  “Tax means the income tax payable under the
ordinance & includes any additional tax, excess profit
tax , penalty, interest, fees payable under this
ordinance”- Section 2(62) of the ITO 1984.
Introduction

4. Type of Taxpayers Tax free Income Limit
Individual 250,000
Woman & 65 above aged taxpayers 300,000
Retarded taxpayers 375,000
Freedom fighters 425,000
Individual Tax Free Income

5. Personal Taxation scenario of Bangladesh

6.  “Income from Salary” is the first one. Generally “salary” means
periodical payment made for work to an employee from an
employer for the services rendered to him
 Basic Salary: The yearly increment is also computed on the basis
of basic salary. Total amount of basic salary in a year is fully
taxable.
 Dearness Allowance: The total amount of dearness allowance is
taxable and therefore included under the head of income from
salary.
 Bonus: It’s meant the payment of extra salary based on the basic
salary or otherwise for festival like EID, Christmas or rewards for
good performance.
Income from salary

7.  Medical Allowance: The amount of 10% of the basic salary or
taka.120000 annually, whichever is less shall be included in his
income.
 House rent Allowance: Amount exceeding 50% of basic salary or
TK 25000 per month whichever is lower, shall be added with
salary.
 Conveyance facility: Higher up 60,000 or 5% of the basic salary
will be added with salary income.
 Employer’s contribution to Recognized Provident Fund: only the
employer’s contribution will be added with salary, not the
employees’ contribution.
 Interest on Recognized Provident Fund: Interest exceeding
14.5% or 1/3rd of basic salary will be added with salary.

8.  Life insurance premium up to 10% of the face value.
 Investment in savings Certifies.
 Employer’s & Employee’s Contribution to Recognized Provident
Fund.
 Self contribution and employer’s contribution to Recognized
Provident Fund.
 Contribution to Zakat Fund
Investment qualified for the tax rebate

9.  “Income from house property” is the 3rd head of income
among the heads mentioned in annual valve of property
consisting of any building or lands thereof
Admissible expenses of house property
 Land development
 Insurance premium
 Interest on mortgage loan
 Annual tax
 Ground rent
 Repair & maintenance:
25 % of the annual value of the property residential
purpose.
30% of the annual value of the property commercial
purpose.
Income from house property

10. “Agriculture” refers to the production of goods though the
growing of plants, animal & others life forms.
Other agricultural income
 Income from cattle rearing
 Income from sale of palm juice and date juice
 Income from sale of seeds and grass.
 Income from land leased for agricultural purpose
 Herbal or medical plants
 Income from cultivation of flower and fruits
 Income from fisheries
 Income from ferry ghat, mooring terminal and fishing
Income from agriculture

11.  Products cost
 Land development
 Insurance premium
 Maintenance Cost for Irrigation Plant
 Interest on mortgage loan
 Depreciation
Admissible expenses of agricultural

12.  The income the head “Capital Gains” shall be computed after
making the following deduction from the full value of the
consideration received or accruing from the transfers of the
capital asset or the fair market value thereof.
 Any expenditure incurred solely in connection with the transfer
of the capital asset such advertisement, brokerage, stamp duty,
registration fees, legal expenses.
Income under Capital Gain

13.  Tax payable on the total income excluding capital
gains as per applicable rate.
 Tax at the rate of 15% on the whole amount of such
capital gains.
 On disposal of capital assets within 5 years of
acquisition, the amount of capital gain will be
included with total income and taxed accordingly at
regular rate.
 Capital gains or tax at the rate of 15% on the capital
gains, whichever is lower.
Capital Gain shall be taxed at the rate

14.  Capital gain arising from the transfers of capital asset
used for the purpose of business.
 Capital gains arising from the transfer of government
securities.
 Capital gains arising from the transfer of capital being
building or land to a new company.
 Capital gains arising from the transfer of its capital
asset to a new company.
 Capital gains arising from the transfer of Securities
approved by SEC & traded in Stock Exchanges in
some specific cases
Tax Exempted Capital Gains

15.  Tax avoidance is the minimization of tax liability by the tax payer
or his agent by efficient tax planning. Tax is avoidance is high in
Bangladesh now a days.
 Common methods of tax evasion: Cash sales, False expenses,
Concealment of additional sources, Forgery in documents,
Maintenance of duplicate records .
 Common methods of tax avoidance: Transfer of property with
bad motive, Transfer of property to trust, Setting up private
limited company for tax avoidance, Window dressing
transactions
Tax Avoidance In Bangladesh

16.  Social awareness program
 Broad band tax net
 Special watch-dog for excise and turnover taxes
 Reengineering custom duty net
 Simplified income tax system
 Penalty and reward
 Standardization of public utility price
 Updating anti evasion provision in the ITO, 1984
Strategies to prevent tax evasion and
avoidance

17. Thank You