Bangladesh Income Tax hand note_Ranjan sir lecture details (updated in light of Finance Act 2015), Bangladesh Tax hand note for ICAB & ICMAB

Updated (Finance Act 2015)
Md. Ibne Nayeem Hasan, ibnenayeem@gmail.com
Khaled Mahamud Sujon, sujonais@gmail.com
Page 1 of 171
Study Material
Taxation
(Without VAT)
(With Finance Act 2015)
Initiated by:
Asif Ahmed
Deputy Manager
Finance & Accounts
Impress-Newtex Composite Textiles Ltd
Updated by:
Md. Ibne Nayeem Hasan
Khaled Mahamud Sujon
Sami Mymoon Akash
Mahee Al Islam Niloy
Assistant, Audit and Advisory
KPMG in Bangladesh
Rahman Rahman Huq
Chartered Accountants
This study material is mainly an accumulation of the lectures of Mr. Ranjan Kumer Bhowmik,
FCMA with the update of ‘Finance Act 2015’. Note that, we tried our best to incorporate the
recent changes of the FA 2015, but some mistakes may be there and we are cordially sorry for
that. Mr. RanjanKumerBhowmik, FCMA is not concern about this study material; hence do
not responsible for any mistakes or misrepresentation of laws (if any) mentioned here. So
reader awareness is being advised.
.

Page 2 of 171
Contents
Part One: Income tax authority, types of taxes, some important definitions, tax rate, reduced tax rate.............. 5
Some Important Definitions: ...................................................................................................................................... 6
Resident vs. Non-Resident: ...................................................................................................................................... 10
Tax Rate: .................................................................................................................................................................. 13
Part Two: Income from Salary.................................................................................................................................. 17
Definition of Salary:................................................................................................................................................. 17
Pay and Allowances totally exempt from Tax: (Sixth Schedule, Part-A)................................................................. 19
Salaries exempt from payment of tax (as per S.R.O.): ............................................................................................. 19
Information regarding payment of salary (Section 108 read with rule 21, 22 and 23) ............................................. 20
Investment Tax Rebate:............................................................................................................................................ 21
GPF Vs RPF Vs UPF: .............................................................................................................................................. 22
Practical Problems.................................................................................................................................................... 24
Part Three: Income from Interest on Securities ...................................................................................................... 40
Important sections: ................................................................................................................................................... 40
Part Four: Income from House Property:................................................................................................................ 42
Part Five: Agricultural Income:................................................................................................................................ 47
Important sections of Agricultural Income:.............................................................................................................. 47
Section 35 - Method of accounting:.......................................................................................................................... 49
Sixth Schedule (Part A):........................................................................................................................................... 50
Third Schedule: Computation of Depreciation Allowance:...................................................................................... 50
Part Six: Capital Gain ................................................................................................................................................ 51
Important sections of Capital Gain:.......................................................................................................................... 51
Second Schedule: Para 2 (Tax payable on capital gain):.......................................................................................... 52
Sixth Schedule (Part A): (Exclusion from income):................................................................................................. 53
Special tax rates on Capital Gain from sale of share ................................................................................................ 53
Part Seven: Income from Business and Profession.................................................................................................. 54
Definitions:............................................................................................................................................................... 54
Rules:........................................................................................................................................................................ 55
Deemed Income:....................................................................................................................................................... 56
Sixth Schedule (Part A); Exclusion from income;.................................................................................................... 58
Section – 35; Method of accounting:........................................................................................................................ 60
Third schedule; Tax Depreciation: ........................................................................................................................... 63
Tax Holiday.............................................................................................................................................................. 65
Company Tax Assessment........................................................................................................................................ 69
Corporate Tax Rate................................................................................................................................................... 72
Corporate Social Responsibility ............................................................................................................................... 75
Part Eight: Income from other sources..................................................................................................................... 94
Important sections of income from other sources:.................................................................................................... 94
6th
Schedule (Exemption); ........................................................................................................................................ 95
Section – 36: Allocation of income from royalties, literary works, etc:................................................................... 95
Section – 19; Un-explained investments, etc., deemed to be income;...................................................................... 95

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Part Nine: Set off and Carry Forward Losses........................................................................................................ 105
Important sections related to set off and carry forward losses................................................................................ 105
Carry forward of loss from business: Section 38.................................................................................................... 105
Carry forward of loss in speculation business: Section 39 ..................................................................................... 106
Carry forward of loss under the head ―Capital Gains‖: Section 40 ........................................................................ 106
Loss of Agricultural Income: Section 41................................................................................................................ 106
Set-off of loss in the case of succession in business: Section: 42........................................................................... 107
Carry forward of depreciation allowance: Section 42(6)........................................................................................ 107
Advance Payment of Tax ....................................................................................................................................... 108
Part Ten: Income Tax Return.................................................................................................................................. 109
Part Eleven: Table of Withholding Tax.................................................................................................................. 114
Part Twelve: Assessment of Partnership Firm....................................................................................................... 127
Sixth Schedule (Part A) Para – 18.......................................................................................................................... 127
Section – 30(b); Deduction Inadmissible: .............................................................................................................. 127
Section – 43(3); Computation of total income: ...................................................................................................... 127
Section – 85; Special provisions regarding assessment of firms: ........................................................................... 127
Practical Problems:................................................................................................................................................. 128
Part Thirteen: Assessment ....................................................................................................................................... 130
Assessment:............................................................................................................................................................ 130
FINAL SETTLEMENT OF TAX LIABILITY (SEC. 82C): ................................................................................. 131
Penalty and Prosecution: ........................................................................................................................................ 135
Prosecution (Imprisonment for punishable offence)............................................................................................... 138
Penalty for not maintaining accounts in the prescribed manner (section 123). ...................................................... 139
Penalty for failure to file Income Tax Return (Section- 124)................................................................................. 140
Penalty for concealment of income (section 128)................................................................................................... 140
Penalty for default in payment of tax (section-137) ............................................................................................... 140
Part Fourteen: Appeal.............................................................................................................................................. 141
Appeal: ................................................................................................................................................................... 141
Panel of Facilitators................................................................................................................................................ 148
Part Fifteen: Double Taxation Avoidance Agreement........................................................................................... 150
Double Taxation Avoidance Agreement (Sec. 144 read with 7th Schedule): ........................................................ 150
The Bangladesh model of Agreement on Avoidance of Double Taxation consists of 29 Articles that are as follows:
................................................................................................................................................................................ 150
Part Sixteen: Transfer Pricing................................................................................................................................. 153
Important Definitions: ............................................................................................................................................ 153
Important sections related to transfer pricing: ........................................................................................................ 154
Penalty:................................................................................................................................................................... 156
Income Tax Rules 1984.......................................................................................................................................... 157
Part Seventeen: Statutory regulatory orders (SROs) ............................................................................................ 164

Page 4 of 171
Acknowledgement
Without help of the below mate this sheet might not be prepared. gratitude goes to:
Sami Mymoon Akash(RRH)
Mahee Al Islam Niloy(RRH)
Khaled Mahamud Sujon(RRH)
Mohammd Ahsanullah(RRH)
Md.Riad Hossain (RRH)
Mariam Rabeya(Acnabin)

Page 5 of 171
Part One: Income tax authority, types of taxes, some important definitions, tax rate,
reduced tax rate
Coverage:
1. Income Tax Ordinance 1984
2. Income Tax Rules 1984
3. SRO (Statutory Regulatory Order)
4. Circular of NBR
5. Case References
a. ITR (Indian Tax Report)
b. BTD (Bangladesh Tax Decisions)
Direct Tax Vs Indirect Tax:
Impact and incidence of the direct tax are on the same person, but in case of indirect tax impact and incidence can be
shifted to others, which are ultimately borne by the final consumer.
Direct tax – Income tax, travel tax, gift tax etc.
Indirect Tax – VAT, turnover tax, SD.
Income Tax Laws:
 Section (sub section)
 Section Clause (sub clause)
 Rule (sub rule)
IT Ordinance Vs IT Rules:
Tax Ordinance – made or changed by the parliament
Tax Rules – made by NBR
Govt. can reduce tax burden through SRO but cannot imposetax. Power to impose new tax rested on the parliament.
Income Tax Authority (Section –3):
Section – 3:
There shall be the following classes of income tax authorities for the purposes of this Ordinance, namely:-
1. (1) The National Board of Revenue,
2. [(1A)]Deleted. F.A. 1995
3. [(1B) Chief Commissioner of Taxes;]Added F. A. 2011
4. (2) Directors-General of Inspection (Taxes),
5. (2A) Commissioner of Taxes (Appeals),
6. (2B) Commissioner of Taxes (Large Taxpayer Unit),
7. (2C) Director General (Training);
8. (2D) Director General, Central Intelligence Cell ;
9. (3) Commissioners of Taxes,
10. (3A) Additional Commissioners of Taxes who may be either Appellate Additional Commissioner of
Taxes or Inspecting Additional Commissioner of Taxes,
11. (4) Joint Commissioner of Taxes who may be either Appellate Joint Commissioners of taxes or
Inspecting Joint Commissioner of Taxes,
12. (5) Deputy Commissioners of Taxes,
13. [(6) Tax Recovery Officers nominated by the Commissioner of Taxes among the Deputy
Commissioner of Taxes within his jurisdiction;]Subs F. A. 2011
14. (7) Assistant Commissioners of Taxes,
15. (8) Extra Assistant Commissioners of Taxes; and
16. (9) Inspectors of Taxes

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Income tax authority is as follows –
1. NBR – Supreme authority headed by ‗the Chairman‘.
2. Chief Commissioner of Taxes (not yet appointed anyone)
3. Commissioner of Taxes (CT);
a. DG (Central Intelligence Cell, CIC);
b. DG (Inspection);
c. CT (Appeal);
d. DG (Training);
e. CT (Large Taxpayer Unit);
4. Additional Commissioner of Taxes (ACT);
a. Appellate Additional Commissioner of Taxes (AACT);
b. Inspecting Additional Commissioner of Taxes (IACT);
5. Joint Commissioner of Taxes (JCT);
a. Appellate Joint Commissioner of Taxes (AJCT);
b. Inspecting Joint Commissioner of Taxes (IJCT)
6. Deputy Commissioner of Taxes (DCT)
a. TRO – Tax Recovery Officer;
b. TPO - Transfer Pricing Officer
7. Assistant Commissioner of Taxes;
8. Extra Assistant Commissioner of Taxes; and
9. Inspector of Taxes
Types of Taxes:
Some Important Definitions:
NBR
Customs & VATIncome Tax
Income
Tax
Foreign
Travel Tax
Gift
Tax
Value
Added Tax
Turnover
Tax
Supplementary
Duty
Income; (section 2(34)):
Income" includes--
1. (a) any income, profits or gains, from whatever source derived, chargeable to tax under any provision of
this Ordinance under any head specified in section 20;
2. (b) any loss of such income, profits or gains;
3. (c) the profits and gains of any business of insurance carried on by a mutual insurance association
computed in accordance with paragraph 8 of the Fourth Schedule;
4. (d) any sum deemed to be income, or any income accruing or arising or received, or deemed to accrue or
arise or be received in Bangladesh under any provision of this Ordinance:
Provided that the amount representing the face value of any bonus share or the amount of any bonus
declared, issued or paid by any company registered in Bangladesh under ক োম্পোনীআইন, 1994 (1994
সননর 18 নংআইন) to its shareholders with a view to increase its paid-up share capital shall not be
included as income of that shareholder;
Why taxes???
Because they (officers) deal with
three taxes: income tax, gift tax
and travel tax.

Page 7 of 171
6th
schedule, Part A, Local government are not taxable entity.
Income Year and Assessment Year:
TAX; (section 2(62)):
"Tax" means the income-tax payable under this Ordinance and includes any additional tax, excess profit tax,
penalty, interest, fee or other charges leviable or payable under this Ordinance;"
Assessee; (section 2(7)):
"Assessee", means a person by whom any tax or other sum of money is payable under this Ordinance, and
includes -
1. (a) every person in respect of whom any proceeding under this Ordinance has been taken for the
assessment of his income or the income of any other person in respect of which he is assessable, or of
the amount of refund due to him or to such other person;
2. (b) every person who is required to file a return under section 75, section 89 or section 91;
3. (c) every person who desires to be assessed and submits his return of income under this Ordinance; and
4. (d) every person who is deemed to be an assessee, or an assessee in default, under any provision of this
Ordinance;"
Person; (section 2(46)):
"Person" includes an individual, a firm, an association of persons, a Hindu undivided family, a local authority, a
company and every other artificial juridical person;
Assessment Year; (section 2(9)):
"Assessment year" means the period of twelve months commencing on the first day of July every year; and
includes any such period which is deemed, under the provisions of this Ordinance, to be assessment year in
respect of any income for any period;
Income Year; (section 2(35)):
"Income year", in respect of any separate source of income, means--
(a) the period beginning with the date of setting up of a business and ending with the thirtieth day of June
following the date of setting up of such business;
(b) the period beginning with the date on which a source of income newly comes into existence and ending with
the thirtieth day of June following the date on which such new source comes into existence;
(c) the period beginning with the first day of July and ending with the date of discontinuance of the business or
dissolution of the unincorporated body or liquidation of the company, as the case may be;
(d) the period beginning with the first day of July and ending with the date of retirement or death of a participant
of the unincorporated body;
(e) the period immediately following the date of retirement, or death, of a participant of the unincorporated body
and ending with the date of retirement, or death, of another participant or the thirtieth day of June following the
date of the retirement, or death, as the case may be;
(f) in the case of bank, insurance or financial institution the period of twelve months commencing from the first
day of January of the relevant year; or
(g) in any other case the period of twelve months commencing from the first day of July of the relevant year;";
(Amended FA 2015)
Income Year Assessment Year
July 1, 2013 – June 30, 2014 2014 – 2015
January 1, 2013 – December 31, 2013 2014 – 2015
August 1, 2012 – July 31, 2013 2014 – 2015

Page 8 of 171
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Page 9 of 171
Resident and Non-Resident:
For Individual–182 days; or 90 days + 365 days in previous 4 years
For Company and Firm –
Difference between resident and nonresident:
Firm Company
Partial Control & Management Resident Non-Resident
Full Control & Management Resident Resident
Resident Nonresident
Taxed on Global income Local income
Investment allowance Allowable Not allowable
Tax rate Normal rate Direct tax rate
Resident; (section 2(55)):
"Resident", in respect of any income year, means -
1. (a) an individual who has been in Bangladesh -
1. (i) for a period of, or for periods amounting in all to, one hundred and eighty two days or more in that
year; or
2. (ii) for a period of, or periods amounting in all to, ninety days or more in that year having previously been
in Bangladesh for a period of, or periods amounting in all to, three hundred and sixty-five days or more
during four years preceding that year;
2. (b) a Hindu undivided family, firm or other association of persons, the control and management of whose
affairs is situated wholly or partly in Bangladesh in that year; and
3. (c) a Bangladeshi company or any other company the control and management of whose affairs is situated
wholly in Bangladesh in that year;

Page 10 of 171
Resident vs. Non-Resident:
Not only the rate of tax depends upon the residential status of the assessee but also the category of income to be
included in computing total income depends upon the residential status of the assessee. So, in income tax viewpoint
firstly the residential status of the assessee is to be determined. As per section 2(55) a person will be resident if he
fulfills the following conditions:-
Sl.
No
Category of person Condition for being
resident
Analysis
1. Individual
(Bangladeshi or
foreigner)
Stay in Bangladesh for at
least 182 days in aggregate
during the income year.
OR
Stay in Bangladesh for at
least 90 days in aggregate
during the income year
+
An aggregate stay of at least
365 days in Bangladesh in
the course of 4 years
preceding the income year.
The test of residence here are alternative not
cumulative. Each of the 2 tests requires the personal
presence of the assessee in Bangladesh during the
income year. If the assessee is continuously out of
Bangladesh during the whole year, he must be
treated as non-resident in that year.
If the 1st criteria of 182 days has fulfilled he is
to be regarded as resident irrespective of any other
consideration. If anybody resides here for less than
90 days then obviously he is non-resident. Thus a
man may be resident in 2 different countries in the
same year, although he can have onlyone domicile.
2. (i) Hindu Undivided
Family (HUF)
(ii) Partnership firm
(iii) Association of
Persons (AOP)
The control and management
of its affairs is situated
wholly or partly in
Bangladesh during the
income year.
If the control and management is situated
wholly outside Bangladesh only then an HUF, firm
or other AOP can be treated as non-resident. Since
partial control is sufficient for the purpose of
residence, a firm may have 2 places of residence;
The residence of partners or an individual member
of HUF is immaterial for the purpose of determining
the residence of a firm or family.
The place of control may be different from the
place where the actual trading is carried on. Control
of a business does not necessarily mean the carrying
on of the business and therefore the place where
trading activities or physical operations are carried
on is not necessarily the place of control and
management. Control and management signifies the
controlling and directive power and situated implies
the functioning of such power at a particular place
with some degree of performance.
Control and management means de facto
control and management and not merely the right or
power to control and manage. The absence of the
karta from Bangladesh throughout the year does not
by itself lead to the conclusion that the family is
non-resident in that year, since the business of the
family, though it is normally controlled by the karta,
may at a particular point of time be controlled by
some one else. The same principle applies equally to
cases of firms and other association of persons.

Page 11 of 171
Sl.
No
Category of person Condition for being resident Analysis
3. Company The control and management
of its affairs is situated
wholly in Bangladesh during
the income year.
A company whether a Bangladeshi company or
a foreign company whether it is registered at
Registrar of Joint Stock Companies of Bangladesh
or not is resident here in Bangladesh if the control
and management of its affairs is situated fully in
Bangladesh during the income year.
In the classical word, a company cannot eat or sleep
but it can keep house and do business and for the
purpose of income tax a company resides where it
really keeps house and does business, i.e. where the
central management and control actually abides.
While the location of control and management is the
sole test of residence for HUF, Firm and AOP, it is
also a test for companies.
Here controls mean de facto control not merely
de jure control. The control and management, the
head and brain, does not reside where there is some
ultimate power of control such as the power to alter
the articles of associations by a special resolution or
the power to interfere with fundamental finance.
A company may be resident in Bangladesh
even though its entire trading operations are carried
onabroad. If the management and control is situated
here, the company is resident here and it does not in
the least matter where the actual selling and buying
of the goods takes place.
Incidence of taxation on the basis of residential status:
Section 16 is the charging section where it is clearly mentioned that income tax is to be charged on the total income
of the assessee. The liability to tax arises by virtue of the charging section. The assessment order only quantifies the
liability, which is created by the charging section.
Here total income as per section 2(65) means total amount of income as referred to in section 17 and includes any
other income which is to be included in the total income of the assessee as per provision of The Income Tax
Ordinance, 1984. The principle underlying section 17 is to make the chargeability of income depending upon the
locality of receipt or accrual. Section 43 also deals with the computation of total income by inclusion, in some cases,
of other person's income. Assesses can be divided into 2 categories:-
(i) Resident; and
(ii) Non-resident.

Page 12 of 171
The basic difference between resident and non-resident is tabulated below:-
Sl.
No
Area Resident Non-resident Analysis
1. Income
point of
view
The entire income
accruing or arising in
any part of the world,
irrespective of whether it
is received in
Bangladesh or not is
taxable.
The income accruing or
arising in Bangladesh
only is taxable.
(a) A non-resident, unlike a resident, is
not chargeable in respect of income
accruing or arising outside Bangladesh
and not received in Bangladesh.
(b) If an income is taxed on the ground
of accrual or deemed accrual, it can not
be taxed again on the ground of receipt
either in the same year or in a different
year.
(c) As per S.R.O. No. 216-Law/ Income
tax/2004 dated 13/07/2004 foreign
income of a Bangladeshi national,
irrespective of resident or non-resident,
is exempt from payment of tax if it
comes through official channel.
2. Tax point
of view
General tax rate is
applicable.
Maximum tax rate is
applicable.
(a) The only exception is non-resident
Bangladeshi where general tax rate is
applicable.
(b) If any resident assessee proves to the
satisfaction of the DCT that, he has paid
tax at foreign country by deduction or
otherwise on any income which has
accrued or arisen to him outside
Bangladesh with which there is no
reciprocal tax treaty, the DCT may
deduct from the tax payable by the
assessee a sum equal to the tax
calculation on such doubly taxed income
at the average rate of tax of Bangladesh
or the average rate of tax of the foreign
country whichever is less.
3 Investment
Tax Credit
Point of
view
Investment tax credit
facility is applicable
Investment tax credit
facility is not applicable
The only exception is non-resident
Bangladeshi where investment tax credit
facilityis applicable like resident.
Thus, the incidence of tax depends upon and is determined by the question whether the assessee is resident in
Bangladesh. A non-resident entitles partial exemption from chargeability of tax to which resident is not entitled. The
incidence of Tax is higher in the case of persons who are resident and lower in the case of persons who are non-
resident.
Avoidance of tax through transactions with non-residents (Sec.104 read with rule-34 and 35)
Business may be carried on between a resident and a non-resident and owing to the close connection between them,
the course of business may be so arranged that the resident makes either no profit or less than the ordinary profit in
that business. Such an arrangement might deprive Bangladesh Govt. from tax which would otherwise be payable by
the resident. In such cases the resident may be charged in respect of the profits which he has not in fact made but
which he might reasonably be expected to have made had he done the business on ordinary commercial terms.
Rule-35 read with rule-34 prescribes the method of determining the amount of notional income in respect of which
the resident may be charged under section 104.

Page 13 of 171
Tax Rate:
Other than Company:
Entity other than the company (individual, HUF, firms etc) are taxed at progressive rate as below –
On the 1st
tk. 250,000 Nil
On next tk. 400,000 10%
On next tk. 500,000 15%
On next tk. 600,000 20%
On next tk. 3,000,000 25%
Balance amount 30%
For women and senior citizen (65+) first slab will be of tk. 300,000; for handicapped, it is of tk. 375,000 and for
gazetted war-wounded freedom fighters, it is of tk. 425,000.(Amended FA 2015)
As per second schedule, in case of non-resident non-Bangladeshi tax rate is 30% direct.
Surcharge is payable by an individual assessee on total tax payable if the total net worth exceeds tk. 2.25crore as
stated below: Surcharge will be calculated based on tax liability after considering investment tax rebate.
Total net worth Rate
Over Tk 2.25to 10 crore 10%
Over Tk 10 to 20 crore 15%
Over Tk 20 to 30 crore 20%
Over Tk 30 crore 25%
Minimum surcharge has been fixed at Tk. 3,000 for the Assessment year 2015-2016. (Added FA 2015)
(Amended FA 2015)
Study References:
1. Finance Act
2. Section 16 (16B, 16C, 16CCC) of ITO
3. Second Schedule of ITO
4. SRO (Reduced tax rate)
Minimum tax;
Resident in Dhaka or Chittagong City Corporation; BDT 5,000
Resident in other City Corporation; BDT 4,000
Resident in Paurashabhas at District towns; BDT 3,000
Resident in areas other than those mentioned above; BDT 3,000

Page 14 of 171
Company:
Company tax rate is direct on its assessment income at following rate –
1. Listed company 25%(Amended FA 2015)
2. Non listed or non-resident company 35%(Amended FA 2015)
3. Bank, insurance & NBFI (except merchant banks)
If listed or government approved Bank, insurance and financial isntitution in 2013
40%(Amended FA 2015)
If not listed 42.5%(Amended FA 2015)
4. Mobile Phone Operator 45%
But if any such mobile phone operator converts it as a publicly traded company by transferring minimum
10% share of its paid up capital, provided Pre Initial Public Offering Placement will not be more than 5% of
that, in that case tax rate 40%

Page 15 of 171
5. Cigarette Manufacturers 45%(Amended FA 2015)
6. Merchant Bank 37.5%
7. Cooperative society (registered under cooperative society act 2001) 15% (Added FA 2015)
 dividend received by a company or dividend paid to abroad will be treated as dividend income and tax rate
will be 20%.
 Tax on capital gain of the company will be 15%.
 Unlike in the previous year, no rebate is allowed even if dividend is paid more than 30% of the share capital.
 The rate of income tax would be 35% if the company fails to declare or pay dividend at less than 10% of
share capital within the specified time (60 days).
 Non-listed companies including mobile phone operator companies other than banks, insurance and other
financial institutions, merchant banks and cigarette manufacturing companies will receive rebate of 10% in
the year of listing if they list at least 20% of their paid up capital.(Amended FA 2015)
Section – 16:
Section - 16B; Charge of additional tax:
Notwithstanding anything contained in any other provision of the Ordinance, where---
(a) a public limited company, not being a banking or insurance company, listed with any stock exchange in
Bangladesh, has not issued, declared or distributed dividend or bonus share equivalent to at least fifteen percent
(15%) of its paid up capital to its shareholders within a period of six months immediately following any income
year, the company shall be charged additional tax at the rate of five per cent (5%) on the undistributed profit in
addition to tax payable under this Ordinance: or
(b) any person employs or allows, without prior approval of the Board of Investment or any competent authority
of the Government, as the case may be, any individual not being a Bangladeshi citizen to work at his business or
profession at any time during the income year, such person shall be charged additional tax at the rate of fifty
per cent (50%) of the tax payable on his income or taka five lakh, whichever is higher in addition to tax
payable under this Ordinance. (Added FA 2015)
Explanation.-For the purpose of this section, "undistributed profit" means total income with accumulated profit
including free reserve.
Section - 16C; Charge of excess profit tax:
1. Where a banking company operating under ব্োং ন োম্পোনীআইন, 1991 (1991 সননর 14 নংআইন) shows
profit in its return of income for an income year at an amount exceeding fifty per cent of its capital as
defined under the said Act together with reserve, the company, in addition to tax payable under the
Ordinance, shall pay an excess profit tax for that year at the rate of fifteen per cent on so much of
profit as it exceeds fifty per cent of the aggregate sum of the capital and reserve as aforesaid.
Section - 16CCC; Charge of minimum tax:
1.
Notwithstanding anything contained in any other provisions of this Ordinance, every company shall,
irrespective of its profits or loss in an assessment year for any reason whatsoever, including the
sustaining of a loss, the setting off of a loss of earlier year or years or the claiming of allowances or
deductions (including depreciation) allowed under this Ordinance, be liable to pay minimum tax at the
rate of zero point three zero (0.30%) per cent of the amount representing such company's gross receipts
from all sources for that year:
Provided that such rate of tax shall be zero point one zero per cent (0.10%) of such receipts for an
industrial undertaking engaged in manufacturing of goods for the first three income years since
commencement of its commercial production.(Amended FA 2015)
Explanation: For the purposes of this section, 'gross receipts' means-
(a) All receipts derived from the sale of goods;
(b) All fees or charges for rendering services or giving benefits including commissions or
discounts;
(c) All receipts derived from any heads of income.]Added F.A. 2011

Page 16 of 171
Capital Gain (Second Schedule):
Example: Salary income Tk. 520,000 and capital gain Tk. 1,000,000, Therefore total income is Tk.
1,520,000, on which tax shall be, assuming the capital gain arises from disposal of asset after five years;
Applicable slab Rate Tax Amount
On 1st up to 250,000 0% -
On next up to 400,000 10% 40,000
On next up to 500,000 15% 75,000
Remaining 370,000 20% 74,000
Total Tk. 1,520,000 189,000
Or
{(520,000-250,000)*10%}+(1,000,000*15%) = Tk. 177,000
Whichever is lower
and in this case the lower amount is Tk. 177,000
 In case of gain of winning any lottery tax are deducted @ 20% at source though it can be computed with total
income, but no further tax rebate can be claimed.
 Tax on the capital gain of the non-resident non-Bangladeshi shall be at the maximum rate i.e. @ 30% currently.
Reduced Tax Rate (SRO):
1. Jute, Textile 15%
2. Private University, Private College 15%
3. Local authority (RAJUK, BRTA, CDA, KDA etc) 25%
Section - 16E; Charge of tax on sale of share at a premium over face value:
Notwithstanding anything contained in any other provisions of this Ordinance or any other law, where a company
raises its share capital through book building or public offering or rights offering or placement or preference
share or in any other way at a value in excess of face value, the company shall be charged, in addition to tax
payable under this Ordinance, tax at the rate of three (3) percent on the difference between the value at which the
share is sold and its face value. Added F.A. 2010 and omitted F.A. 2013
Other than Company:Company:
15%
Within 5 yrs of purchase:
normal rate
Capital Gain
After 5 yrs of purchase:
1. Slab rate on total
income; or
2. Tax on cap. Gain 15%
and on other income,
normal slab rate
Whichever is lower

Page 17 of 171
4. Cattle feed, fish feed, shrimp feed (from AY 2014-15) 3%
Part Two: Income from Salary
Income from Salary:
Definition of Salary:
There is no exhaustive definition of salary at Income Tax Ordinance, 1984. Only an inclusive definition is given at
section 2(58) where ―salary‖ includes the following:-
a) Wages (or pay)
b) Annuity
c) Pension –Totally exempted as per 6th Schedule (Part-A) Para-8
d) Gratuity – Exempted as per 6th Schedule (Part-A) Para-20
e) Fees
f) Commission
g) Allowances
h) Perquisites (Indirect benefits)
i) Profits in lieu of salary or wages
j) Profits in addition to salary or wages
k) Advance Salary
l) Leave encashment
However, the term “Basic Salary” has been defined at Rule 33(2) as well as at Rule 65A (1) where basic salary
means the pay and allowances payable monthly or otherwise but does not include the following:
a) Dearness allowance (unless it enters into the computation of Superannuation or retirement benefits of the
employee)
b) Employer‘s contribution to Recognised Provident Fund and interest credited on the accumulated balance
c) Allowances which are tax exempted
d) Allowances, perquisites, annuities and other benefits
Section 2(58) contains definitions within the definition. Salary includes perquisites and profits in lieu of salary, which
again defined at section 2(45) and 2(50) respectively.
Perquisite is defined in the Oxford English Dictionary as "any casual emolument, fee or profit attached to an
office or position in addition to salary or wages.” There is an exclusive definition of perquisite at section 2(45)
where perquisite means any payment or benefit made to an employee in the form of cash or any other form but
excluding the following:
a) Basic Salary
Study Reference:
Definition: Section – 2(58), 2(45), 2(50), 2(27), 2(28) read with rule 33(2)(b)
Section – 21, 50, 50B read with rule 21 and 22
108 read with rule 23
124(2), 165 and 172
Exemption: Rule – 33 read with Sixth Schedule (Part A) para 5
Provident Fund:
1st
schedule (Part B) read with Rule – 43, 44
6th
Schedule (Part A) Para – 4,6, 21, 25
6th
Schedule (Part B) Investment allowance
SRO 454 (Serial 19) date – 31/12/1980
SRO 310, dated: 27 June 1984

Page 18 of 171
b) Festival bonus
c) Incentive bonus
d) Arrear Salary
e) Advance Salary
f) Leave encashment
g) Leave Fare Assistance (LFA)
h) Overtime
i) Contribution by the employer to-
1) Recognized provident fund.
2) Approved Pension Fund.
3) Approved Gratuity Fund and
4) Approved Superannuation Fund.
There is an inclusive definition of "Profits in lieu of salary" at section 2(50) where profits in lieu of salary include: -
a) The amount of compensation in connection with the termination / modification of any terms and
conditions relating to employment.
b) Any payment from a provident or other fund to the extent to which it does not consist of contributions
by the employee and the interest on such contributions.
Classification of Salary (Section: 21)
The following 3 (three) categories of income of an assessee is classified and computed under the head ―salaries‖,
namely;-
a) Salary due from an employer to an employee in the income year, whether paid or not ;
b) Salary paid or allowed to an employee in the income year though not due before it become due to him; and
c) Arrears of salary paid or allowed to him in the income year, if not charged to income tax for any earlier
income year.
Salary once included in any year on due basis or advance payment basis is not includible again in salary income of an
employee of any other year. No payment can fall and to be taxed under the head salary unless the relationship of
employer and employee exists between the payer and the payee. Salary can be taxed not only on payments made
by an employer during employment, but also on payments by a former employer after the employment has come to an
end. The definition of ―employee‖ is given at section 2(28) where employee includes a director also. It has been
provided that an employee, in relation to a company, includes the managing director or any other director or other
person, who irrespective of his designation performs any duties or functions in connection with the management of
the affairs of the company. So a director who is not connected with the management of affairs of the company may
not be called employee. For the purpose of determining the value of perquisites of an employee under rule-33,
employee includes a shareholder director. If the shareholder director is director of more than one company then he
shall be entitled to the benefits under rule - 33 for one company only.
―In order to be classified under salary, there must be an employment contract.‖ Such as – consultancy fee will be
income from business and profession unless and until there is an employment contract.
Apportionment of salary over the years due to arrear or advance salary (sec.172)
Where the salary is assessable at a rate higher than that at which it would otherwise have been assessed by reason of-
(a) Any portion of salary being received in arrear or in advance;
(b) Salary received in the year for more than 12 months;
(c) Received a payment, which is a profit in lieu of salary;
The DCT may, on the basis of application to him by the assessee, allocate salary over the year or years to which it
relates and may refund the amount of tax, if any, paid in excess. According to section 21, salary is taxable in the year
in which it is due or is paid. Where salary is paid in arrear or in advance, or where a retirement benefit or salary for
more than 12 months is received in any one year, the income for that year may be liable to assessment at a rate higher

Page 19 of 171
than that at which it would otherwise have been assessed. Section 172 authorises the DCT to grant appropriate relief
for income tax in the above situation.
Pay and Allowances totally exempt from Tax: (Sixth Schedule, Part-A)
The following pay and allowances shall be exempted from payment of tax and shall not be included in the
computation of salary income:-
(a) Interest accrued on PF on which Provident Fund Act, 1925 applies (Para 4(1)).
(b) All sum accrued on Workers Profit Participation Fund established under the Companies Profit (workers
participation) Act, 1968 (Para 4(2)) by a worker as defined in section 2(65) of the said Act (Para 4(2)). (Amended FA
2015)
(c) Any special allowances, benefits, or perquisites granted to meet expenses incurred for official duties (Para-5)
(d) Remuneration of Ambassadors/High Commissioner/Charge d‘affairs etc. of Embassies of foreign states and
their non-Bangladeshi employees (Para-7).
(e) Pension (Para-8).
(f) Gratuity up to taka two crore fifty lakh (Para-20).(Amended FA 2015)
(g) Any payment from provident fund to which PF Act. 1925 applies or from a recognized provided fund, an
approved superannuation fund or workers‘ profit participation fund established under Labour Law 2006 to any
worker (Para-21).
(h) Interest credited on accumulated balance of a recognized provident fund. The exemption limit is 1/3rd of salary
[here salary means basic salary and dearness allowance (if any)] or interest credited @ 14.5% whichever is
lower (Para-25, definition of salary as per 1st Schedule (Part -B) and S.R.O.no 310 dated 27/06/1984).
(i) Any amount received at the time of voluntary retirement in accordance with any scheme approved by the Govt.
(Para-26).
(j) Income from dividend received from a company listed in any stock exchange in Bangladesh up to twenty five
thousand taka. (Para- 11A). (Amended FA 2015)
(k) Any income received by an assessee from Wage earners development bond, US dollar premium bond, US dollar
investment bond, Euro premium bond, Euro investment bond, Pound sterling investment bond or Pound sterling
premium bond. (Added FA 2015)
(l) Income from of a mutual fund or a unit fund up to taka twenty five thousand. (Amended FA 2015)
Salaries exempt from payment of tax (as per S.R.O.):
Salaries of the following categories are exempted as per Govt. S.R.O. and notification: -
(m) As per Private Sector Power Generation Policy of Bangladesh, income of any foreigner employed in a private
power generation company of Bangladesh is tax-free for 3 years from the date of his arrival in Bangladesh.
(S.R.O. no 114/1999); [not applicable for quick rental power generation company]
(n) Any salary drawn by any foreigner from the contracting state or agency as per bilateral agreement between the
Govt. of Bangladesh and Govt. of the contracting state or agency from any foreign aided development project is
fully exempt from payment of tax. (S.R.O. NO 207/1997)
(o) Salaries of categorized personnel of United Nations and its agencies are tax free as per provision of schedule-1
(Article-V) Section-17 and schedule-2 (Article-VI) section-18 of United Nations and Specialized Agencies
(Privileges and Immunities) Act, 1975. (NBR Circular No: NBR/Tax-7/Tax Policy/02/2006, dated. 29/4/2007.)
(p) When in any year an assessee has ceased to be an employee participating in a recognised Provided Fund and
has been declared by the employer maintaining the Fund not to be eligible to receive the whole for the
accumulated balance due to him, so much of his income as is assessable for that year shall be exempted from
income tax and shall be excluded from the computation of his total income and if such amount exceeds the
amount of his income in that year, so much of his income in the following year or years as is equal to the
amount of such excess shall be so exempted and excluded is such year or years. [S.R.O.no 454(serial no19)
dated:31/12/1980]
(q) All allowances and benefits (except basic salary and festival bonus) of Govt. employees, Ministers, MP and
Judges of Supreme Court are exempted from payment of tax [SRO No:226,227 and 228 dated 04/7/2011]

Page 20 of 171
Information regarding payment of salary (Section 108 read with rule 21, 22 and 23)
Every employer shall furnish salary statement of employees in the form prescribed at rule-23 to the DCT before 1st
September each year. The DCT may however extend this date. This section requires information to be given
regarding accrual and actual payment of salary in order to help detection of any avoidance of tax. In case of non-govt.
employees every person responsible for making deduction before payment of salaries to them shall send forthwith a
statement prepared in the form prescribed in rule-21 to the concerned DCT.
The Commissioner of Taxes may under rule-22 permit an employer to pay tax on the income of his employees in a
lump sum every month based on the average amount of tax deductible from such income from salaries and submit at
the end of the year the statement in the form prescribed in rule-23(3) Such statement must show not only the salary
which is paid but also the salary due. Because salary due is chargeable under section 21, whether paid or not.
Failure to furnish statement is punishable under section 124(b) and for making a false statement under section 165.
Tax on Tax
If salary tax is borne by the employer, than tax will not be treated as perquisite in the hand of the employee and
therefore there is no tax on tax issue in this case. (S.R.O. no 182/1999 dated 01-07-1999)
Salary Income Computation (rule 33)
As per income tax law the following pay and allowances will be included in computing salary income:-
a) Full basic salary;
b) Full festival bonus;
c) Full incentive bonus;
d) Full dearness allowance.
e) Full entertainment allowance;
f) Any allowance where there is no exemption limit
g) Employer‘s contribution to Recognised provident fund;
h) Cash house rent allowance if it exceeds 50% of basic salary or Tk. 25,000/- per month whichever is lower;
(If job is for 9 months, exemption will also be for 9 months)
Example: Tk. Tk. Tk.
Basic salary (52,000*12) 624,000
House rent allowance (30,000*12) 360,000
Less: Lower of 50% basic salary or Tk.
25,000 p.m. whichever is lower
50% of basic salary 312,000
Or, Tk. 25,000 p.m. 300,000 (300,000) 60,000
Total Income 684,000
Note: If actual house rent is less than Tk 3,00,000 then that amount shall be allowable.
i) Rental values of the rent-free accommodation or 25% of basic salary of the employee whichever is less.
Particulars Tk Tk. Tk
Basic salary (52,000*12) 6,24,000
Rental Value 1,60,000
House Rent (25% of Basic Salary) 1,56,000
(the lower one) 1,56,000
Less: House rent paid (2,000*12) 24,000 1,32,000
Total Income 7,56,000

Page 21 of 171
If rental value is not given, 25% of the Basic Salary shall be used for computation of total income
of an assessee.
Where the accommodation is provided at a concessionary rate, the rent actually paid by him shall be deducted.
j) Cash conveyance allowance if it exceeds Tk. 30,000/ per year.
Example: Received Exempted Net Income
Tk. Tk. Tk.
Basic salary (52,000*8) 416,000 - 416,000
House Rent (20,000*8) 160,000 (160,000) -
Conveyance Allowance 30,000 (30,000) -
Total Income 606,000 (190,000) 416,000
Note 1: House rent (25,000*8) or 50% of Basic salary, whichever is lower.
Note 2: Conveyance Allowance is allowable up to TK 30,000 irrespective of months.
k) Where conveyance facilities are provided partly or exclusively to an employee for personal or private
purposes, an amount equivalent to Tk. 60,000 per annum or 5% of basic salary whichever is higher shall
be added to his/her income. If any additional allowance is given along with the car facility, both will be added
to the salary income. nothing will be added if is given for official purpose.
l) Medical allowance if it exceeds 10% of basic salary or Tk. 120,000/- per year, whichever is lower.
m) The value of any benefit provided free of cost or at a concessionary rate;
n) Any sum paid by an employer in respect of any obligation of an employee.
o) In case of leave fares assistance; if it is mentioned in the job contract then it is exempted up to actual
expenditure. If it is not mentioned in the job contract then fully taxable. But if the travel is outside the country
the exemption is only applicable for every alternative year. If within the country, then exemption is for every
time of travel. (Amended FA 2015)
Voluntary disclosure of income [Section: 19E(3)(e)]
Voluntary disclosure of income as per section 19E will not be applicable to any income which is exempted from tax
in the concerned income year or is chargeable to tax at a reduced rate in accordance with section 44 of the Income
Tax ordinance, 1984. (Amended FA 2015)
Investment Tax Rebate:
According to section 44(2) and Part-B of the 6th schedule, the following investments and donations are eligible for
tax rebate:-
[A] Investments:
a) Life insurance premium (Para-1); (up to 10% of the policy value)
b) Employee‘s contribution to provident fund to which P.F.Act, 1925 applies (Para-3)
c) Both employee‘s and employer‘s contribution to Recognized Provident Fund (Para-5)
d) Employee‘s contribution to approved superannuation fund in which the employee is a participant (Para-6)
e) Contribution to benevolent fund and group insurance scheme (Para 17)
f) Contribution to any DPS up to Tk.60,000 per year at any scheduled bank. (Para-11)
g) Investment in the following instruments-
1. Savings Certificates;
2. Unit Certificates and Mutual Fund Certificates issued by ICB or any other financial institution; or
3. Government Bonds and Securities. (Para-10)
h) Investment at shares, debentures or mutual fund (both IPO and secondary market). (Para-27)
Particulars Tk. Tk
Basic salary (52,000*12) 6,24,000
House Rent (25% of Basic Salary) 1,56,000
Less: House rent paid (2,000*12) 24,000 1,32,000

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i) Investment at Govt. Treasury bond (Para-28)
j) Purchase of 1computer (desktop) within Tk. 50,000/ or1 laptop within Tk.1,00,000/(Para-23).
[B] Donations to:
1. Rural charitable hospital approved by the Govt (Para- 11A)
2. Organisation for the welfare of the retarded people approved by the Social Welfare Department and NBR
(Para 11B)
3. Donation to Jakat Fund (Para 13)
4. Donation to an institution of Aga Khan Development Network (Para 21)
5. National level institution set up in memory of the liberation war (Para-24)
6. National level institution set up in memory of Father of the Nation. (Para-25)
7. Donation to Govt. approved philanthropic and educational institutions (Para-22)
GPF Vs RPF Vs UPF:
SL Subject GPF RPF UPF
1 Employees‘ contribution Automatic taxable* Automatic taxable* Automatic taxable*
2 Employers‘ contribution N/A Taxable Taxable but at the
end of the service
3 Investment allowance Yes Yes (both) No
4 Interest on PF Tax free **Tax free up to a
certain limit
Fully taxable
5 Treatment on the hand of
employer
N/A Allowable
expenditure on
Profit and loss
account
Not allowable
6 Pre-mature termination / leave
the job
*** ***Employee can
adjust in subsequent
years.
***
7 Payment at retirement No treatment No treatment Taxable (employer
portion and interest)
*Automatic Taxable = deduction of contribution to PF cannot be considered. Total basic salary are added to the total
income
**
One third (1/3) of the basic salary (Basic + Dearness allowance) (Para 25)
Or
Interest @ 14.5%
(SRO 310)
Whichever is lower is exempted
For example, a person received interest on his PF @ 16% which is tk. 230,000 and his basic salary is tk. 600,000.
Then exemption will be –
1. 1/3 of his BS, which is tk. 200,000 or
2. Interest @ 14.5% = ((230,000/.16)*.145) = 208,438
Lower one is exempted, that is tk. 200,000 is exempted.
So his total income = (600,000+(230,000 -200,000)) = 630,000
But this interest should be excluding from the total income in time of calculating investment allowance.
*** (SRO 454)
In case of pre-mature job leave and where employees received nothing from the PF, on which the employee has
already pay tax should be deducted from his total income in the subsequent years.

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1. Allowable Investment Allowance:
The allowable investment allowance is the lower amount of the following three:
30% of total income excluding
(1)employer‘s contributions to
recognized provident fund (RPF)
(2) taxable portion of interest on RPF
(3) any income u/s 82C
(4) any income on which reduced tax
rate is applicable
OR
TK. 15,000,000/=
OR
Actual Investments as per 6th
Schedule
Part B
Whichever is lower is to
be treated as investment
allowance
Tax rebate @ 15% is
applicable on such
allowable investment.
2. Income tax rate for the assessment year 2015-2016
Rates
i. On the First Tk. 2,50,000/- of total income = nil
ii. On the next Tk. 4,00,000/- of total income = 10%
iii. On the next Tk. 5,00,000/- of total income = 15%
iii. On the next Tk. 6,00,000/- of total income = 20%
v. On the next Tk. 30,00,000/- of total income = 25%
vi. On the balance of total income = 30%
However, the threshold limit for woman and senior citizen ageing 65 years or more is Tk. 300,000/ and for
physically handicapped persons Tk. 375,000/- and for gazetted war-wounded freedom fighter is Tk.
4,25,000/-.(Amended FA 2015)
After rebate, minimum tax for individual taxpayer is Tk. 5,000 (for Dhaka and Chittagong city corporation
area), Tk. 4,000 (for other City Corporation) and Tk. 3,000 (for other areas) if total income exceeds the
minimum taxable limit.(Amended FA 2015)
Deduction of tax at source from salaries (Section 50+Rule-13)
The employer including Govt. (govt. Employees are taxed on their basic salary, festival allowance and bonus) shall
deduct tax at source at the time of paying salaries at an average rate applicable to the estimated total income of the
employee. At the time of making such deductions, the amount to be deducted may be increased or decreased for the
purpose of adjusting any excess or deficiency arising out of any previous deductions or failure to make deductions.
The employer‘s liability to deduct tax is absolute and is not affected by any private arrangement whereby the
employee has undertaken to discharge his own tax liability.
However employer will not deduct tax at source or will deduct tax at a lower rate or amount in case an employee can
produce a certificate issued by the DCT to do so.

Page 24 of 171
The amount deducted shall be deposited to the credit of the Govt. within 2 weeks from the end of the month of
deduction. However DCT can, with the prior approval of the IJCT, permit an employer to pay the tax deducted at
source under the head salaries quarterly on: -
a) 15th September
b) 15th Decembe
c) 15th March; and
d) 15th June
Practical Problems
Practical Problem -1:
Mr. X (50 years old) is the Managing Director of ABC Co. Ltd. He has been given the following monthly salary and
allowances for the year ending on 30 June 2015.
1 Basic Salary Tk 25,000 per month
2 Dearness Allowance Tk. 5,000 per month
3 Entertainment Allowance Tk 1,000 per month
4 Employer‘s Contribution to P.F. (Recognized) Tk.2,500 per month
5 Lunch Allowance Tk. 1,000 per month
6 School fee for the Children of Mr. X Tk. 5,000 per month
7 Utility Allowances Tk. 3,000 per month
8 Fee for Golf Club (yearly) Tk. 5,000 per year
9
Medical Allowance Tk. 3,000 per year
(Actual expenditure during the year was Tk. 30,000/-)
10 Festival Bonus Equal to basic pay (got two bonus during the year)
11 Other Particulars:-
(1) He has purchased 5 years savings certificates amounting to Tk. 1,00,000/-.
(2) Employer provided him a free accommodation. (Rent of the house is roughly Tk. 35,000p.m.)
(3) Employer also provided him a full time car.
(4) He has been given a servant from his office whose monthly salary is Tk. 1,200/-.
(5) He paid L.I.P. Tk. 50,000/-. (Policy value is Tk. 4,00,000/-).
(6) He contributed Tk. 2,500/- per month to the recognized provident fund (RPF). Employer also contributed the
same.
(7) During the year he received bank interest amounting to Tk. 1,80,000/-( net of tax)
(8) He purchased secondary shares of Tk.75,000/- of a public ltd. company which is listed in DSE.
Compute the total income and determine the tax liability of Mr. X for the assessment year 2015-2016.

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Computation of Total Income of Mr. X
Mr. X
Calculation of total income for the year ended June 2015
Income year- 2014-15
Assessment Year-2015-16
1. Income from Salary (Section-21) Tk. Tk.
(1) Basic Salary (25000 X12) 3,00,000
(2) D.A. (5000X12) 60,000
(3) Entertainment Allowance (1000 X12) 12,000
(4) Employer‘s Contribution to R.P.F (2500 X12) 30,000
(5) Lunch Allowance (1000 X12) 12,000
(6) School Fee (5000 X12) 60,000
(7) Utility Allowance (3000 X12) 36,000
(8) Notional income for full time car for private use(5% of
Basic Salary or Tk.60,0000;whichever is higher) 60,000
(9) Fee for Golf Club 5,000
(10) Medical Allowance (3000 X 12) 36,000
Less: lower of 120,000 and 10% of Basic Salary 30,000 6,000
(11) Festival Bonus (25000 X 2) 50,000
(12) Full Free Accommodation:
Rental value of accommodation (35000 X 12) 4,20,000
25% of basic Salary (whichever is less) 75,000 75,000
(13) Servant‘s Salary (1200 X 12) 14,400
Salary Income 720,400
2. Income from Other Sources [Section-33]
Bank Interest (1,80,000 x
10100
100

)
2,00,000
Computation of Investment Allowance
Actual Investment:
1. Savings Certificate 1,00,000
2. LIP (10% of sum assured) 40,000
3. Contribution to R.P.F. (Self + Employer) 60,000
4., Investment in shares 75,000
Total investment allowances claimed 275,000
As per Section 44(3) of the I.T. Ordinance, allowable investment allowance comes to 30% of total income
[excluding employer‘s contribution to R.P.F.] = (920,400 - 30,000) x 30% = 267,120 or TK 15,000,000 or Actual
Investment whichever is less.

Page 26 of 171
Tax Calculation
On 1st Tk. 250,000/- of Total Income Tax Nil
On Next Tk. 400,000/- of Total Income Tax @ 10% Tk. 40,000
On Next Tk. 270,400/- of Total Income Tax @ 15% Tk. 40,560
Tax on Total Income of Tk. 920,400 Tk.80,560
Less: Tax Rebate on Investment Allowance (267,120
X 15%) 40,068
Total Tax: 40,492
Less:- Tax deducted at source from bank interest 20,000
Net tax liability 20,492
Answer: (1) Total Income: - Tk. 920,400
(2) Net tax liability: - Tk. 20,492

Page 27 of 171
Practical Problem -2:
From the following particulars compute the total income and tax liability of Mr. X for the income
year ending 30 June 2015.
(a) Salary Income:
Basic salary Tk. 20,000 p.m.
Dearness allowance – 20% of basic salary
Bonus – 1 month‘s basic salary
House rent allowance – 55% of basic salary
Medical allowance – Tk. 500 p.m.
Conveyance allowance – Tk. 1,200 p.m.
Posting allowance – Tk. 5,000 p.m. to meet extra cost of living for posting at Hill District
Subscription to RPF – 10% (Employer‘s contribution also same)
Interest accrued Tk. 96,000 on P.F. balance calculated @ 16% p.a.
(b) Interest on Securities:
Interest on SEC approved debenture Tk. 35,000/-
Interest on Govt. Bond Tk. 70,000/- (TDS @ 10%, Tk. 7,000/- at upfront system 3 years before)
(c) Income from House Property:
Mr. X has one residential house one-half of which is let out at a monthly rent of Tk. 10,000/- and the other half is
self-occupied.
Mr. X incurred following actual expenditures for the full house:
Taka
Municipal tax 20,000
Repairs and maintenance 60,000
Insurance premium 12,000
Salary of caretaker 30,000
Interest on house building loan 1,47,000
(d) Income from Business:
⅓rd share income form a partnership business firm Tk. 73,000 (after tax).
Firm‘s income Tk. 2,25,000/-
(e) Capital Gain:
Gain from sale of listed companies share Tk. 10,00,000/-
(f) Income from other sources:
Cash dividend (net) from a listed company Tk. 45,000/-
Stock dividend of 100 shares (face value Tk. 10 but market price on that day Tk. 1,500 per share)
Interest (net) on savings bank account Tk. 5,400/-
During the year Mr. X made the following investments:
1. Life insurance premium at the name of his father Tk. 60,000 (Policy value Tk. 5,00,000/-)
2. Investment in shares of a listed company Tk. 1,00,000/-
3. Contribution to monthly pension scheme of Islami Bank Tk. 5,000/- p.m.

Page 28 of 171
Solutions:
Mr. X
Calculation of Total Income for the year ended June 2015
IY: 2014-15
AY: 2015-16
Description Workings Amount (BDT)
a) Salary Income:
Basic Salary (BS) 20,000*12 2,40,000
Dearness allowance 20% of BS 48,000
Bonus 1 months BS 20,000
House rent allowance (55% of BS) 1,32,000
Less: 50% of BS or 25,000 p.m. lower one (1,20,000) 12,000
Medical Allowance 6,000
Less: Exempted-up to lower of 120,000 or 10% of BS (Rule 33I) 6,000 -
Conveyance Allowance 14,400
Less: Allowable up to 30,000 (Rule 33D) (14,400) -
Posting Allowance (it can also be allowable fully under sixth
schedule (part A) Para 5)
60,000
Employers' contribution to PF 24,000
Interest accrued 96,000
Less: Allowable @ 14.5% or 1/3 of BS (BS+DA), lower one (87,000)
9,000
Total Salary Income 4,13,000
b) Interest on Securities:
Interest on SEC approved debenture 35,000
Interest on Govt. bond 70,000
Total income from interest on securities 1,05,000
c) Income from House Property:
Annual value 1,20,000
Less: Repair and maintenance 25% of AV (30,000)
Municipal tax (10,000)
Insurance premium (6,000)
Interest on HP loan (73,500)
Total income from house property 500
d) Income from business:
Partnership income 225,000*1/3 75,000
Total income from business 75,000
e) Capital gain:
Sale of share of listed company 10,00,000
Less; Exempted (SRO no. 217, 18.08.2014) (10,00,000) -
Total capital gain -
f) Income from other sources:
Cash dividend (45,000/.90)
Less: Exempted up to 25,000 ( 6th
schedule, Part A, Para 11A)
50,000
(25,000) 25,000
Interest on savings bank account 5,400/.90 6,000
Total income from other sources 36,000
Total income for Mr. X 6,24,500

Page 29 of 171
Investment Allowance:
Employees contribution to RPF 24,000
Employers' contribution to RPF 24,000
Investment in share 1,00,000
Pension scheme (5000*12) 60,000
2,08,000
or, 30% of total income excluding Employer‘s contribution to RPF
and taxable portion of interest on RPF [(6,24,500-24000-
9000)*30%] 1,77,450
or, 1,50,00,000
Lower one (177,450).
So, investment allowance will be on tk. 177,450 @ 15% =Tk.26,618
Calculation Tax Liability:
On the first 2,50,000 0% 0
Remaining 3,74,500 10% 37,450
6,29,500 37,450
Less: Investment allowance (26,618)
10,832
Less: Tax rebate on partnership income* (1,301)
Less: TDS (5,000+600) (5,600)
Net Tax Liability 3,931
* (as per sixth schedule (part b) Para - 16)
= (10833/624,500)*75,000
=1,301
Note: Assuming Mr. X is below 65 years old.
Answer:
Total income Taka 6,24,500
Net Tax Liability Taka 3,931

Page 30 of 171
Question No.8:
The following are the particulars of income of Mr.Fazal for the year ended 30th June, 2014. IS
a) Salary Tk.I2,0001- per month (basic)
b) Dearness Allowance -4()t/o of basic pay but maximum ofTk.4,OOO per month
c) Entertainment Allowance Tk.400 per month.
d) Bonus--equivalent to basic sal3l)' oftwo months.
e) Income rrom Commercial Securities Tk.6,09&1·.
f) Honorarium as part lime advisor Tk.20,0001·
g) Income from Partnership Business Tk.SO,OOOI-(taxed).
h) Income from Agricultural Land (sale ofproduct) n .10,000'-
i) Royalty rrom books Tk.7,OOO.
j) Received bin.h day presentation Tk.S,OOO.
k) Interest on pensioner saving certificate n .lo.ooo.
Mr. Fazal was provided with a free-furnished quarter. Healso owns a house whidl is let out al n.I0,000
per month. The Municipal V.lue of the house is n .I,oo,ooo. He spent 1.7,5001- for repair and
llWO,OOO for altemation. He also paid TkA,OOO for Municipal Tax, Tk.2,OOO for fire insurance.
premium, Tk.J,OOO for collection charges. Other Part.:Culars of Mr. Fazalare as follows:
i. He contributed 10% of his basic salary to • recognized provident fund 10 which his employer
conlribuled equal sums..-
ii. He insured his own life for Tk.75.000 and for the life of his wife for Tk.50,OOO. He paid insurance
premiums on Ihe above policies Tk.6,OOO and Tk.4.000 respeclivel),.
iii. Purchased Pratirakh)'a Saneha), Patta for Tk.20,OOO.
iv. He spent Tk.8,OOO on education for two college going children.
Required to alculale:
I) The total taKable income ..
ii) Investment laxcredit for the year ended 3O~ June 2014.
iii) Tax to be paid.
Page 1 0f t;

Page 31 of 171
,
Answer to qUeJtion no.8:
Computation'or TOlal income ofMr. Fazal
[Considering it for current assessment year otherwise students will not be benefited]
Income Year. 2014-15 I Year. 2015·
Tk. Tk. 11<. TIt.
lacome from Salar" Sec 21
, Basic SaIIllY: TIt. ~n'hIY 12,OOOX12 1.44.000
i ;'I~an~: 4~~ofi~--~~57,6oor-~==--1
48,000 48,000
I ii, 1AI : 4ooXI2 4,800
I ii Bonus (2 month', . 12,1 (2 24,000
Ii, '~e 1~~~%0~~'~~Y.-__~____~3~6i••~1000+-~~t-~~
I v: _, 110 RPF~B. S. 14,400 1,27,200 2,71,200
el......•on , Sec.22 rMi"
Income from ' ~
Income from Hou.. 1 : Sec.2.
Whollv leI oul house:
~nnual Rent.1 Value: 12 ~
Dc IV'lu~H~~ro~ne,~C;A~"n~nu'I~V'lu~e)~I~~ 1,2~~----+---~
I:;es;e~ir v~ ofA'.v , • ~s 25: , ch..-ge) 30000
~ .I tax @~ 84,000
~i""'me from : uJ, 19(30)
Repairs aUowed as per seclion 2S- '" -~ ,. 30,000
L,e,s: Repairs claimed (Tk.7,500+Tk.l,OOO)- 10,500
Unspent amount will be treated as HP income uls I9(JO)
4. lacome fro..
~~ Pr<>duce
!-ess eoSl of I j 6~
Inrome [rom : Sec.2S
ncome from I income)
. In,ome from Other Source: Sec. JJ
10,000
6,000
.) i 20.000
TOllllncome
19,100 1,03,100
4,000
4,61,798
page zof5
,
,

Page 32 of 171
Investment Tn Rebate: Sec. 44(1) (b); 44(3)
Particulars Tolal Admissible Tax
Investment Tk. Investment rebate Tk.
a) Actuallnvcstment:
;. Contribution to RPF: 14,400 X 2 21,100
(Employer and Employee both)
ii. Savings eertificatc 20,000
iii. Life Insurance Premium
Self: 6,000
or, 10% of Policy amount 7,100
(Le. IIW. ofTk. 10,000) (Lower) 6,000
Wife: 4,000
Or, 10% of Policy amount 1,000
(;.e. 10% of n. 10,000) (Lower)
4,000
11,800
b) Max Limit of Investment 30% of T.I. excluding
employer's contribution to RPF=4,61,798-14,400)
X 30% "" 4,47,398 X 30% ,. 1,34,219 or Tk.
1,50,00,000 or Actual investment Tld 8JOO
(Whictlever is lo~r) ~
Tax Credit: 15% on admissible investment ofTk.
58,800
Tn calculation:
TOli ncome
Taxon IIITk.2.50,OOO'"
Tax on remaining Tk. 2, 11,798@ 10%
Less: Investment tax rebate
Less: Rebate on income from partnersl!ip finn al average rate
as per 6" schedule (pan.b)pa~.16 (10,000)( 12,360/4,61,798)
Net tax payable
NOle:
Tk.
11,800
Tkc~
Nil
lW2
21 ,180
Llli
12,360
l.ill
Tk. J.J...lli
8,820
I) Income from Commercial Securities needs not to be grossed-up as TOS was at upfront system.
2) Rebate would be calculated It the avetage rate of lax out of the .-.ncome from Parti~hip
Business" (taxed) to arrive at the Net lax calcuiliton as per 6· schedule (part-b) para-I 6.
J) Royalty income from books is ttloxable under Scc.36 of Income Tax Ordinance 1984.
4) Education expense for Children is not an item of investment allowance. So it is nOI considered
for that
5) Interest on pensioner savings certificate is tax free up 10 investment of TIe_5 lakh. As the inlerest
income figure is only Tk.IO,OOO, so Iassume thott investment was within that limit.

Page 33 of 171
Worked example 5
Mr. Zaman Hoque was the HR Manager ofAxiala Bangladesh Ltd. On July 2014, his basic
salary was Tk.52,OOO in the scale of 40 000-4 000x8-72 000. His date of yearly Increme~t '~
on 26"' MarCh. He was terminated from Axiata 'Banglade~h ltd. on 30
th
April, 2015 and JOflne
h·' me rom
Grameenphone Ltd. on 1" June of the same year. During the income year IS Inco
Axiata Bangladesh Ltd and Grameenphone Ltd. are as follows:
From Axlata Bangladesh Ltd.:
He received deamess allowance @ 10% of basic salary and medical allowance Tk. 2000 per
month. He received two festival bonus each equivalent to one month's basIc salary In the
month of September and April respectively. He contributes 10% of hIS basIc salary to a
recognized provident fund. He has been provided with a renl-free quarter and a full tIme car
by the employer. During the year he has also received an entertainment allowance of Tk.
1,000 per month. He has received compensation for the termination of Tk. 2,00,000 and
gratuity of Tk. 1,00,000. Moreover, his accumulated balance from the RPF was Tk. 1,80,000.
From Grameenphone:
His basic salary is Tk. 60,000 per month with 40% house rent allowance and Tk. 5,000
medical allowance per month. He is also entitled to receive Tk. 4,000 conveyance allowance
per month. He contributes 10% of his basic salary to a recognized provident fund. His
employer also contributed the same.
His taxable Income from other sources were Tk. 2,13,119 during the year. During the year
total TDS from various sources of his Income was Tk. 20,000. Moreover, his refund claims of
Tk. 10,000 for excess payment of tax in the last assessment year was to be adjusted witlh
current year's tax liability. His investments during the year were as fOllows:
a. Purchase one laptop Tk. 1,10,000.
b. Payment of his life insurance premium Tk. 20,000 (Policy value Tk. 5,00,000)
c. Contribution to DPS Tk. 3,000 per month.
Compute total Income and tax liability of Mr. Zaman Hoque fortlhe assessment year 2015-16.
SoIytIon5j
AueuH: Mr, Zaman Hoque
Aueament year 2015-2016
Accounting year ended 30 June 2015
Computlltlon of total Income and tax liability
BasIc salary (Note 1) 5.84.774
52.477~ allowance (AxIaIa) (5,24.774xlO%)
Uedlcal allowance (TotaI)(2.000XI0) + 5.000]
Examptad fUlly _It II within Iha .xalnpth~
Scanned by CamScanner

Page 34 of 171
60,000
. 24 774xSO/C or Tk.60,OOO) 10,000vii) Car facility (Axlats) (S" 0 10
viii) Entertainment allowance (Axiata) (I,OOOX ) 2,00,000
ix) Compensation (Axiata)
1,O~::x) Gratuity (Axiata) 100 0 .
Less: Exemption: up to Tk.2.S crore
1,80,O~xi) Accumulated balance of RPF (Axiata)
18000 -Less: Exemption: Full
xii) House rent allowance (Grameenphone)
24,OO(
(60,OOOx40%) 0
Less: Exempted Tk. 2S,OOO per month or 50 Yo
24.0lKof Basic salary whichever is lower
xiii)Conveyance allowance
Less: Exempted - Up to Tk. 30,000 30.000 .
--
Income from other source.
irotallncome
Computation of Inveetment allowance
PU~ch81se one laptop up
2. Payment of life insurance premium 20,000; maximum (10% of the
policy value i.e. 10% of 5,00,000 =50,000)
3. Contribution to DPS (3,000 x12)
4. Employee's and employer's contribution to RPF (58,477x2)
12,04,922
') 13119.
1& lIt041
20,000
36,000
Maximum limit of the Invastmant allowance: 30% of Total income excluding' employer's
contribution to RPF ((14,18,041-58,477) x 30%) =4,07,869 or Tk. 1,50,00,000 or
Tk.2,72,954whlc:hever Is less, So, the required amount of Investment allowance on which
15% tax rabate will be app/k:abIe Is Tk•.2,72,954.
Tax liability:
/;fk. 2,50,000

Page 35 of 171
From Axiata:
B. S. from July 14 to February 15=(Tk. 52,000 x 8) =Tk. 4,16,OOO
B. S. for the month March 15 =[(52,000"25131) +(56,000"6131)) =Tk. 52,774
B. S. for the month April 15 =Tk· 56.000
From Grameenphone:
B. S. for the month June 15
Total basic salary for the income year 2014-15
=Tk.5,24,774
= Tk.60,OOO
= Tk.5,84.n4
2. Since conveyance allowance is received from a separate company, the exemption
limit has considered.
3. In the month of May he was not employed. So, Basic salary for the month of May Is
not taken into consideration.

Page 36 of 171
Problem:
Mrs_ Rahim FCA is a retired Government Officer_ She is 71 years ofage_ Currently she wo.-ks as Adviso.-s ofXYZ Ltd and
ABC Ltd, private companies in Bangladesh_ She also works as a part time consultant for UNDP and World Bank During
the twelve months ended 30 June 2015 she received the following income:
(a) From XYZ Ltd
(h) From ABC Ltd
Basic Salary Tk30,000/~ p_m_
House Rent Tk_ 20,000/~ p_m_
Basic Salary Tk25,000/~ p_m_
House Rent 15,000/~ p_m_
•
•
•
•
•
Medical Allowance 5,000/~ p_m
Conveyance Allowance 5,000/= p_m_
Entertaimnent Allowance 5,000/~ p_m
Conveyance Allowance 5,000/~ p_m_
Bonus Tk_40,000/~ p_lL
No car was provided by the company_
(c) Consultancy fees ofTk_4,00,000 in total from UNDP for her work in Bangladesh and Tk3,00,000 (in equivalent US
dollar) from Wo.-ld Bank for her work in Bhntan and NepaL
(d) Rental income @Tk35,000p_m_ from an apar1ment owned by her_ It is used by a foreigner as his residence_ She paid
municipal las ofTk_40,000/~, landrevenue ofTk_12,000/~ and a fire insurance premimn ofTk_15,000/~ during the year_
She also spent Tk_ 60,000 for maintenance during the year_ The apar1ment remainedvacant for 2 months during the year_
(e) Dividends ofTk_50,OOO/= received from investment in shares ofa mnnber oflisted companies_
(t) She made a capital gain of Tk2,00,000 by buying and selling lisred company shares during the year_
(g) She earned an interest income ofTk_15,000/~ from post office savings bank acconnL
(h) She entered inlo a contract with a developer on 1111114 for erecting a sis sloried building with 10 flats out ofwhich she
will get 5 flats free ofcosL In addition, she will he given Tk_60,00,000 in cash, to he paid in 3 equal installments of
Tk20,00,000 each in Novemher 2014, 2015 and 2016_ She received Tk20,00,000 in Novemher 2014_
(i) She had an apar1mentwhich was sold for Tk_l crore (which was same as the Mouza value) on 1 Angust 2014_ The buyer
paid all the costs (including las, stamp doty, registration costs etc_) at the time ofregistration in Angust 2014_ The apar1ment
was bonght by her on 1 Angust 2000 at a cost ofTk_40 lac_
G) Mrs_ Rahim is a lecturer at the ICAB evening coaching classes and is also involved in the ICAB examination proce88_ She
is also a regular contributor ofarticles to the ICAB Journal and newspaper8_ From these sources she received the following
additional income during the year
Taka
Lec10re Fees 2,00,000
Payments fo.- articles published 50,000
Questions setting and scripts examination fees 40,000
She paid Tk_IO,OOO 10 a part-time typist for typing manuscripts ofher articles_
(k) She received Tk250,000 from agricnl10rallandby selling cTOpS_
(1) She received hono.-arium of Tk_150,000 during the year as a Board Director of Rupali Bank Ltd
Other infonnation are as follows:
• MTS_ Rahim has taken a life insurance policy in favour ofher son and has paid quarterly premiums ofTk_15,000/~ each
throughout the year and another fo.- herselfpaid premium of Tk_ 10,000 per month policy value ofwhich is Tk_ 10 Lac_
• She spent Tk20,000 on professional and techuical books and publications during the year_
• She paid an annual subscription ofTk_5,000/~ 10 ICAB on 117/14_
• She owns andmaintains a motor C3r_
• She sold the shares of a lisred company for Tk2,00,000, which she bonght for Tk_l,50,000 in the income
year 2013-2014, and for which she claimed and received the allowable las rehaw fo.- the investmenL She
has again bonght shares of3 other lisred companies during the year for TIL6,00,000/~_
• Mrs_ Rahim's declared income in the assessment year 2015-2016 is at least 20% more than that ofthe assessment year
2014-2015_
Required:
Compute the total income ofMrs_ Rahim and las liability fo.- the assessment year 2015-2016, advising whether she should
submit the return under Section 82BB <1Jniversal SelfAssessment" ()[' under nonnal procedure_

Page 37 of 171
Solution:
Mrs_ Rahim FCA
Income Year: 2014-15
Assessment Year: 2015-16
Computation oftotal taxable income I Reference BDT BDT
A. Income from Salary , Sec-21
From XYZ limited
~---------
L Basic salary I R-33 (2)a 3,60,000
r----------
2_ House rent allowance R-33A 2,40,000
---------
Less: Lower of 50% basic salary or Tk_ 25,000 p_m_
50% ofbasic salary 1,80,000
Or, Tk_ 25,000 p_m_ 3,00,000 (1,80,000) 60,000
---------
3_ Medical allowance I R-33I 60,000
---------
Less: Lower of 10% basic salary or Tk_ 120,000
10% ofbasic salary 36,000
Or, Tk_ 1,20,000 (36,000) 24,000
---------
4_ Conveyance allowance R-33C 60,000[_._._._.Less: Exempted upto Tk 30,000 (30,000) 30,000
----------
From ABC limited , Note I_.. _.. _.. _.
L Basic salary 3,00,000
2_ House rent allowance 1,80,000
3_ Entertainment allowance 60,000
4_ Conveyance allowance 60,000
5_ Bonus (Assuming festival bonus and paid once per annum) 40,000
Total Income from Salary 11,14,000
B. Income from House Property
Annual value (Since reasonable rent is not given, I assume rent Sec-24 4,20,000
-----------
received is reasonable)
Less: Allowable expenses: _.. _.. _.. _.
Repair and maintenance (25% ofannual value) Sec 25(1)(h) 1,05,000
-----------
Municipal tax Sec 25(1)(e) 40,000
-----------
Land revenue Sec 25(1)(h) 12,000_.. _.. _.. _.
Insurance premium Sec 25(1)(b) 15,000_.. _.. _.. _.
Vacancy allowance Sec 25(1)(j) 70,000 (2,42,000)_.. _.. _.. _.
Add: Deemed income Sec 19(30)
-----------
Deductible expense 1,05,000
Expense claimed (60,000) 45,000
Total Income from House Property 2,23,000
C. Income from Agriculture
Slaes proceeds from crops I Sec 26 I 2,50,000
'-----------,
Less allowable expenses ~ ~~~!~1)(9ii .jCost ofproduction (1,50,000)
Total Income from Agriculture 1,00,000

Page 38 of 171
D. Income from Business or Profession
L Consultancy fees Sec-28
Earned in Bangladesh 4,00,000
Earned in abroad 3,00,000
Less: Exempted (assuming brought through proper channel) (3,00,000) -
Less: Depreciation on professional hooks (30% of20,000) 3rd Schedule 6,000 (6,000)
Total Income from Business or Profession 3,94,000
D. Capital Gain ----------
I Gain :from sale ofshares
,
Sec 31
,
2,00,000
1-----------1
Less exempted , SRO-I961Lf , (2,00,000) -,
F~ -IT~~OI~ - -:12 Gain from sale of~ent (416,6671.15) Note 2 27,77,780
----------
Total Capital Gain 2777780
E. Income from Other Sources
---------
L Dividend income (Assuming net and she has TIN) Sec-33A 55,556
---------
Less: Exempted Sch.6-A-llA (25,000) 30,556
---------2. Interest income fiom Post Office Ale (assuming net) 16,667
-----------
3. Honorarimn fiom Rupali Bank (assnming net) 1,66,667
-----------
4. Income fiom ICAB net ofdirect expenses 2,80,000
5. Money received fiom developer 20,00,000
Total income from other sources 24,93,889
Total Taxable Income 71,02,669
Calculation ofInvest:ment AUowance [as per 6th Schedule., Part-B]
1. Actual investment
-----------
a. Insurance premium ofherselfassuming her son is not ___ [P~-IL __
nnnor
Premimn paid
I
1,20,000 I
10% ofPolicy Valne 1,00,000 ,
Whichever is lower 1,00,000
-----------b. Investment in shares oflisted companies [para-27] 6,00,000 7,00,000
2. 30% ofTotal taxable income exclnding income VIS 82(C) [30% of(5,102,669-2,777,780)] 12,97,467
3. Maximum allowance u/s 44 1,50,00,000
Tax rebate@ 15% ofthe lowest of(1), (2) and (3) 1,05,000

Page 39 of 171
Tax Liability Calculation
Total incom excluding capital gain is Tk.(7,102,669-2,777,780) 43,24,889
Al!l!licable slab Rate Tax amount
On 1st 3,00,000 0% -
Next 4,00,000 10% 40,000
Next 5,00,000 15% 75,000
Next 6,00,000 20% 1,20,000
Remaining 25,24,889 25% 6,31,222
On Capital Gain 27,77,780 15% 4,16,667
71,02,669 12,82,889
Less: Investment tax rebate (1,05,000)
Gross Tax Liability 1l,77,889
Less: IDS (5,556+1500+15000+416,667) (4,38,723)
Net tax liability 7,39,166
Advice:
She should submit return under universal selfassessment as her income is 20% higher than the income ofthe
previous yeaL Therefore, it would not full under the scope ofaudit but her return is tu be furnished in compliance
with provisions ofITO 1984_
Note 1:
As per rule 33 (2) (b) there is restriction ofallowing benefits under rule 33 tu a shareholder directur from one
company ouly_Considering this sprit oflaw, exemtion benefits from salary income allowed ouly for one company
and all income from other company have been added with her tutal income_
Note 2:
Since the sale of capital assets occurred after 5 years of acquisition and the total income excluding income under
sale of apartment is TK 2,324,889 so the applicable tax rate for back calculation of income under 82(C) would be
15% as it is lower than the applicable tax rate which is 25% (marginal tax rate)_ Therefore amount ofIDS 416,667
{(I0,000,000/0_96)*4%} will be used tu hack calculate capital gaia
Applicable slab Rate Tax amount Maximum Amount
On Istuptu 3,00,000 0% 0 -
On next upto 4,00,000 10% 40,000 40,000
On next upto 5,00,000 15% 75,000 75,000
On next upto 6,00,000 20% 1,20,000 1,20,000
Remaining 25,24,889 25% 6,31,222 7,50,000
Note 3:
It is assumed that the subscription fees paid tu ICAB is not soley for the profession_
Note 4:
UNDP & WB are the organisation ofUN_ Ouly the salary categorized person employee at UN is tax free_ As Mrs
Rahim is not salaried person ofUNDP & WB, so her income from there is not tax free_ However consul_cy
income could be shown as income from other sources_
NoteS:
Since sufficient information about purchase price or :fa.ir market value is not given, I assume no capital gain arises
from the contract with developer rather 'I'lL 2,000,000 received from developer would be considered as income
from other sources_

Page 40 of 171
Part Three: Income from Interest on Securities
Income from Interest on Securities:
Types of Securities:
1. Government Securities
2. Government Approved Securities
3. Securities/Debentures issued by company or local authority.
Sixth Schedule (part A):
Para 24: Interest on tax-free government securities are totally tax-free.
Para 40: Interest on Zero Coupon Bond (ZCB) is tax-free
Important sections:
Section – 22:
However, Supreme Court says tax should be deducted when it is received or withdrawn (case ref: Lal Bhai Dolpat
Bhai Vs CIT Bombay, 1952)
Section 23:
Section 51:
Section – 51; Deduction at source from interest on securities:
Study Reference:
Section; 22, 23, 51, 172(d), 106
Sixth Schedule (part A); Para 24 and Para 40
Section – 22; Interest on securities:
The following incomes of an assessee shall be classified and computed under the head "Interest on Securities",
namely:-
(a) Interest receivable by the assessee on any security of the Government or any security approved by
Government; and
(b) interest receivable by him on debentures or other securities of money issued by or on behalf of a
local authority or a company.
Section – 23; Deductions from interest on securities:
(1) In computing the income under the head "Interest on securities", the following allowances and deduction
shall be made, namely:-
(a) any sum deducted from interest by way of commission or charges by a bank realising the interest
on behalf of the assessee;
(b) any interest payable on money borrowed for the purpose of investment in the securities by the
assessee:
Provided that no allowance or deduction on account of any interest or commission paid under
clause (a) or (b), as the case may be, in respect of, or allocable to the securities of
Government which have been issued with the condition that interest thereon shall not be
liable to tax, shall be made in computing the income under section 22;
[(c)]Deleted F.A. 1995
(2) Notwithstanding anything contained in sub-section (1), no deduction shall be allowed under this section in
respect of any interest payable outside Bangladesh on which tax has not been paid or deducted in accordance
with the provisions of Chapter VII.
Income from savings certificate will be
treated as income from other sources.

Page 41 of 171
1. In the case of the security of the Government, or security approved by the Government, unless the
Government otherwise directs, the person responsible for issuing any security, income of which is
classifiable under the head "Interest on securities", shall collect income tax at the rate of five percent
(5%)Subs by F.A. 2014
upfront on interest or discount, receivable on maturity, from the purchaser of the securities:
Provided that this provision shall not apply to the Treasury Bond or Treasury Bill issued by the Government.
Example (Upfront Systems);
A person purchase securities of tk. 10,000,000 @ 6% simple interest matured after 3 years.
So, interest income after 3 years = tk. (10,000,000*6%*3) = tk. 1,800,000.
So, TDS @ 5% on tk. 1,800,000 (which is tk. 90,000) would be deducted today.
Section 172(d):
Section 106; Avoidance of tax by transactions in securities:
(1) Where the owner of any securities sells or transfers those securities and buys them back or reacquires them, or
buys or acquires similar securities, and the result of the transactions is that any interest becoming payable in respect
of the original securities sold or transferred by the owner is not receivable by the owner, the interest payable as
aforesaid shall be deemed, for all purposes of this Ordinance, to be the income of such owner and not of any other
person, whether the interest payable as aforesaid would or would not have been chargeable to tax apart from the
provisions of this sub-section.
2)Where any person has had for any period during an income year any beneficial interest in any securities and the
result of any transactions within that year relating to such securities or the income thereof is that no income is
received by him, or that the income received by him is less than the sum which the income would have amounted to
had the income from such securities accrued from day to day, and been apportioned to the said period, then the
income from such securities for the said period shall be deemed to be the income of such person.
(3) Where, any person carrying on a business which consists wholly or partly in dealing in securities buys or acquires
any securities from any other person and either sells back or re-transfers those securities, or sells or transfers similar
securities, to such other person, and the result of the transactions is that the interest becoming payable in respect of
the securities bought or acquired by him is receivable by him but is not deemed to be his income by reason of the
provisions of sub-section (1), no account shall be taken of the transactions in computing for any of the purposes of
this Ordinance anyincome arising from, or loss sustained, in the business.
(4) The Deputy Commissioner of Taxes may, by notice in writing, require anyperson to furnish him, within such
time, not being less than twenty-eight days, as may be specified in the notice, such particulars in respect of all
securities ofwhich such person was the owner, or in which he had beneficial interest atany time during the period
specified in the notice, as the DeputyCommissioner of Taxes may consider necessary for the purpose ofascertaining
whether tax has been borne in respect of the interest on all thosesecurities and also for other purposes of this section.
Explanation.- For the purposes of this section,-
(a) "Interest" includes dividend;
(b) "Securities" includes stocks and shares; and
(c) Securities shall be deemed to be similar if they entitle their holders to the same right against the same
persons as to capital and interest and the same remedies for the enforcement of these rights, notwithstanding any
difference in the total nominal amounts of the respective securities or in the form in which they are held or in the
manner in which they can be transferred.
Section – 172(d); Relief:
His (assessee) having received in arrears in one income year any portion of his income from interest on securities
relatable to more income years than one; the Deputy Commissioner of Taxes may, on an application made to him
in this behalf, determine the tax payable as if the interest had been received by the assessee during the income
year or years to which it relates and may refund the amount of tax, if any, paid in excess of the tax so determined.

Bangladesh Income Tax hand note_Ranjan sir lecture details (updated in light of Finance Act 2015), Bangladesh Tax hand note for ICAB & ICMAB

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Bangladesh Income Tax hand note_Ranjan sir lecture details (updated in light of Finance Act 2015), Bangladesh Tax hand note for ICAB & ICMAB