Ranjan sir lecture details (updated in light of FA 2016) RRH update

Updated (Finance Act 2016)
Md. Ibne Nayeem Hasan, ibnenayeem@gmail.com
Mohammad Ahsanullah, mahsanullah@outlook.com
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Study Material
Taxation
(Income Tax)
(With Finance Act 2016)
Initiated by:
Asif Ahmed, ACA
Manager
Finance & Accounts
Impress-Newtex Composite Textiles Ltd
Updated by:
Md. Mahee Al Islam
Md. Fazlul Ullah Arif
Afroza Akhtar
Audit and Advisory Services
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 2016’. Note that, we tried our best to incorporate the
recent changes of the FA 2016, but some mistakes may be there and we are cordially sorry for
that. Mr. Ranjan Kumer Bhowmik, 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 has been advised.
.

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Contents
Part One: Income tax authority, types of taxes, some important definitions, tax rate, reduced tax rate: ............ 4
Some Important Definitions: ...................................................................................................................................... 5
Resident vs. Non-Resident: ........................................................................................................................................ 8
Tax Rate: .................................................................................................................................................................. 12
Part Two: Income from Salary.................................................................................................................................. 16
Definition of Salary:................................................................................................................................................. 16
Pay and Allowances totally exempt from Tax: (Sixth Schedule, Part-A)................................................................. 18
Information regarding payment of salary (Section 108 read with rule 21, 22 and 23) ............................................. 19
Investment Tax Rebate:............................................................................................................................................ 20
GPF vs. RPF vs. UPF: .............................................................................................................................................. 21
Part Three: Income from Interest on Securities ...................................................................................................... 24
Important sections: ................................................................................................................................................... 24
Part Four: Income from House Property ................................................................................................................. 27
Part Five: Agricultural Income: ................................................................................................................................ 30
Important sections of Agricultural Income:.............................................................................................................. 30
Section 35 - Method of accounting:.......................................................................................................................... 32
Sixth Schedule (Part A):........................................................................................................................................... 33
Third Schedule: Computation of Depreciation Allowance:...................................................................................... 33
Part Six: Capital Gain ................................................................................................................................................ 34
Important sections of Capital Gain:.......................................................................................................................... 34
Second Schedule: Para 2 (Tax payable on capital gain) ........................................................................................... 36
Sixth Schedule (Part A): (Exclusion from income):................................................................................................. 36
Special tax rates on Capital Gain from sale of share ................................................................................................ 37
Part Seven: Income from Business and Profession .................................................................................................. 38
Definitions:............................................................................................................................................................... 38
Rules:........................................................................................................................................................................ 39
Section – 35; Method of accounting:........................................................................................................................ 43
Third schedule: Tax Depreciation ............................................................................................................................ 48
Tax Holiday.............................................................................................................................................................. 50
Company Tax Assessment........................................................................................................................................ 55
Corporate Tax Rate................................................................................................................................................... 58
Corporate Social Responsibility ............................................................................................................................... 61
Part Eight: Income from other sources..................................................................................................................... 64
Important sections of income from other sources:.................................................................................................... 64
6th
Schedule: Part-A (Exclusion from total income)................................................................................................. 65
Section – 36: Allocation of income from royalties, literary works, etc. ................................................................... 65
Part Nine: Set off and Carry Forward Losses.......................................................................................................... 69
Important sections related to set off and carry forward losses.................................................................................. 69
Carry forward of loss from business: Section 38...................................................................................................... 69
Advance Payment of Tax ......................................................................................................................................... 72
Advance tax at a glance:............................................................................................................................................. 74
Part Ten: Income Tax Return.................................................................................................................................... 75

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Part Eleven: Table of Withholding Tax.................................................................................................................... 79
Part Thirteen: Assessment ......................................................................................................................................... 94
Assessment:.............................................................................................................................................................. 94
FINAL SETTLEMENT OF TAX LIABILITY (SEC-82C):.................................................................................... 96
Penalty and Prosecution: ........................................................................................................................................ 100
Prosecution (Imprisonment for punishable offence)............................................................................................... 103
Penalty for not maintaining accounts in the prescribed manner (section 123): ...................................................... 105
Penalty for failure to file Income Tax Return (Section- 124)................................................................................. 105
Penalty for concealment of income (section-128) .................................................................................................. 105
Penalty for default in payment of tax (section-137) ............................................................................................... 105
Part Fourteen: Appeal.............................................................................................................................................. 106
Appeal: ................................................................................................................................................................... 106
Panel of Facilitators:............................................................................................................................................... 114
Part Fifteen: Double Taxation Avoidance Agreement........................................................................................... 116
Double Taxation Avoidance Agreement (Sec. 144 read with 7th Schedule): ........................................................ 116
Part Sixteen: Transfer Pricing................................................................................................................................. 119
Important Definitions: ............................................................................................................................................ 119
Important sections related to transfer pricing: ........................................................................................................ 120
Penalty:................................................................................................................................................................... 122
Income Tax Rules 1984.......................................................................................................................................... 124
Part Seventeen: Statutory regulatory orders (SROs) ............................................................................................ 130
Part Eighteen: Illustrations...................................................................................................................................... 139
Individual assessment............................................................................................................................................. 139
Partnership firm assessment ................................................................................................................................... 163
Company assessment.............................................................................................................................................. 165

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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 impact and incidence of indirect taxes are 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, Supplementary Duty (SD).
Income Tax Laws:
 Section (sub section)
 Section Clause (sub clause)
 Rule (sub rule)
Income Tax Ordinance Vs IT Rules:
Tax Ordinance – made or changed by the parliament
Tax Rules – made by NBR
Government can reduce tax burden through SRO‘s but cannot impose tax. 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--
(a) any income, receipts, profits or gains, from whatever source derived, chargeable to tax under any provision of
this Ordinance; [Added F. A. 2016]
(b) any amount which is subject to collection or deduction of tax at source under any provision of this ordinance;
[Added F. A. 2016]
(c) any loss of such income, profits or gains
(d) 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;
(e) 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;
(f) any amount on which a tax is imposed; [Added F. A. 2016]
(g) any amount which is treated as income under any provision of this ordinance; [Added F. A. 2016]
Why tax?
Because they (officers) deal with
three taxes: income tax, gift tax
and travel tax.

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6th
schedule, Part A, Local government are not taxable entity.
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 -
(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;
(aa) every person by whom a minimum tax is payable under this ordinance. [Added F. A. 2016]
(b) every person who is required to file a return under section 75, section 89 or section 91;
(c) every person who desires to be assesseed and submits his return of income under this Ordinance; and
(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) and 2(46A)]:
2(46) - ―person" includes an individual, a firm, an association of persons, a Hindu undivided family, a trust, a
fund, a local authority, a company, an entity and every other artificial juridical person;
2(46A) - ―person with disability‖ means an individual registered as প্রতিবন্ধী বযতি (person with disability) under
section 31 of প্রতিবন্ধী বযতির অতিকার ও সুরক্ষা আইন ২০১৩ (২০১৩ সননর ৩৯ নাম্বার আইন)
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, financial institution [or any subsidiary thereof]Added F.A. 2016
, 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)
:
Provided that, the deputy commissioner of Taxes may allow a different financial year for a company
which is a subsidiary or holding company of a parent company incorporated outside Bangladesh if such
company requires to follow a different financial year for the purpose of consolidation of its accounts
with the parent company.[Added FA 2016]
Provided that the amount representing the face value of any bonus share or the amount of any bonus share
declared, issued or paid by any company registered in Bangladesh under ককাম্পানী আইন, 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;

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Income Year Assessment Year
1 July 2013 – 30 June 2014 2014 – 2015
1 January 2013 – 31 December 2013 2014 – 2015
1 August 2012 – 31 July 2013 2014 – 2015
Tax Day [section 2(62A)]:
―Tax Day‖ means –
(i) in the case of an assessee other than a company, the thirtieth day of November following the end of the
income year.
(ii) in the case of a company, the fifteenth day of the seventh month following the end of the income year.
(iii) next working day following the Tax Day if the day mentioned in sub-clause (i) and (ii) is a public
holiday.
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;

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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 Non-Resident:
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. Therefore, 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 two 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 a non-resident in that
year.
 If the first criterion of 182 days has been
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 person may
be resident in two different countries in the same
year, although he can have only one residency.
Particulars Firm Company
Partial Control and Management Resident Non-Resident
Full Control and Management Resident Resident
Particulars Resident Non-Resident
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 –
(a) an individual who has been in Bangladesh –
(i) for a period of, or for periods amounting in all to, one hundred and eighty two days or more in that
year; or
(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;
(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
(c) a Bangladeshi company or any other company the control and management of whose affairs is situated
wholly in Bangladesh in that year;

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SL. Category Condition Analysis
2. (i) Hindu
Undivided Family
(HUF)
(ii) Partnership
firm
(iii) Association of
Persons (AOP)
The control and management
of its affairs 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 two places of
residence; the residence of partners or an
individual member of HUF is immaterial for
determining the residence of a firm or family.
 The place of control may be different from the
place where the actual trading occurs. Control of
a business does not necessarily mean the carrying
on of the business and therefore the place where
trading activities or physical operations occur 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 do
not by itself lead to the conclusion that the family
is non-resident in that year, since someone else,
though it is normally controlled by the karta, may
at a particular point of time control the business
of the family. The same principle applies equally
to cases of firms and other association of persons.
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.
Therefore, for the purpose of income tax a
company resides where it really houses 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 carried
outside Bangladesh. 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.

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Incidence of taxation based on 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. Means for Resident taxable income is Global Income but for Non-Resident taxable income means only income
from Bangladesh. Section 43 also deals with the computation of total income by inclusion, in some cases, of other
person's income. Assessees can be divided into 2 categories:-
(i) Resident; and
(ii) Non-Resident
The basic differences between resident and non-resident are tabulated below-
SL
No
Point of
view
Resident Non-resident Analysis
1. Income (a) The entire income
accruing or arising
in any part of the
world, irrespective
of whether it is
received, in
Bangladesh or not
is taxable.
(a) 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 cannot
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 tax payment
if it comes through official channel.
2. Tax (a) General tax rate
is applicable.
(a) 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, lower one.
3 Investment
Tax Credit
(a) Investment tax
credit facility is
applicable
(a) Investment tax credit
facility is not applicable
a. The only exception is non-resident
Bangladeshi where investment tax
credit facility is applicable like
resident.

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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 case, 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.

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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
Father or mother of a handicapped person or his/her legal guardian will be entitled to a tax-free slab of Tk. 25,000
higher than their original slab (first slab). This means the first slab for such person would be BDT 275,000. If both
father and mother is taxpayer, only one can avail this facility. Added FA 2016
Provided further that, any assessee is the owner of any small or cottage industry in less developed area or least
developed area and engaged in manufacturing of the product of small and cottage industry thereof will get rebate of
payment of income tax from income derived from such sources at the following rate:
Description Rate
a) In case where production of the concerned year
exceeds 15% but not more than 25% of the
previous year
- 5% of tax payable on such income
b) In case where, production exceeds 25% of the
immediately preceding year
- 10% of tax payable of such income
Explanation:
(1) Person with disability means listed disable person as per Section 31 of law of protection and rights of
disabled person, 2013 (No 39 of law 2013)
(2) The meaning of least developed area or less developed areas as per Section 45of Sub-section (2B), clause (b)
and (c) of the ITO 1984 (Order No. XXXVI of 1984)
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
Till Tk. 2.25 Crore Nil
Over Tk. 2.25 to Tk. 5Crore 10%
Over Tk. 5 to Tk. 10 Crore 15%
Over Tk.10 to Tk. 15 Crore 20%
Over Tk.15 to Tk. 20 Crore 25%
Over Tk. 20 Crore 30%
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 (North and South) and 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 City Corporation; BDT 3,000
Minimum surcharge fixed at Tk. 3,000 for the
Assessment year 2016-2017.

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Surcharge calculation explanation:
Situation 1: Particulars Amount in BDT
Tax payers net worth 2,20,00,000
Total Income 5,00,000
Tax payable of income 25,000
Surcharge payable Nil
Surcharge payable (10% of Tax payable) 2,500
Total Income 500,000

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Company:
Special Tax Rate:
SL No. Type Rate Last Amended
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 40% (Amended FA 2015)
If not listed 42.5% (Amended FA 2015)
But for bank, insurance and financial institution approved by the
Government in 2013
40%
4 Mobile Phone Operator 45%
5
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%
6 Cigarette Manufacturers 45% (Amended FA 2015)
7 Merchant Bank 37.5%
8
Dividend received by a company or dividend paid to abroad will be
treated as dividend income and will be taxed at
20%
9 Cooperative society (registered under cooperative society act 2001) 15% (Amended FA 2015)
10 Tax on capital gain of the company will be 15%
11
If the company fails to declare or pay dividend at less than 10% of
share capital within the specified time (60 days)
35%
12
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)
13
Tax has to be paid at the rate of 25% even if dividend is paid more than
30% of the paid up capital of the company.
14
In case of an assessee, not being a company, engaged in manufacturing
cigarette, bidi, gul and other goods which are related to tobacco rate of
tax on such income
45%
SL. Description Income Slab Rate
On 1st 10 Lac 3%
On next 20 Lac 10%
On remaining balance 15%
On 1st 10 Lac 3%
On next 20 Lac 10%
On 1st 10 Lac 3%
On next 20 Lac 10%
a. In case of Company 10%
b. In cose of an assessee not being a company maximum 10%
a. knitwear and oven garments 20%
b. In cose of an assessee not being a company maximum 20%
1
2
3
4
5
Assessee company engaged in Jute production and earning from exporting of Jute product
In case of Company engaged in production and exporting
Income from poultry
Poultry feed, dairy mulberry, apiculture, horticulture,
pisciculture etc.
Shrimp, poulty, fisheries, fish hatchery

Page 15 of 178
Section – 16:
Section 16C and 16CCC have been omitted by Finance Act 2016.
Capital Gain (Second Schedule):
 In case of gain of winning any lottery tax at source is deducted at 20% 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. at 30% currently.
Rate Tax Amount
On 1st BDT 250,000 0% -
On next BDT 400,000 10% 40,000
On next BDT 500,000 15% 75,000
Remaining BDT 370,000 20% 74,000
Total Tax Liability BDT 189,000
Or
{(520,000-250,000)*10%}+(1,000,000*15%) = Tk.BDT 177,000
Whichever is lower
and in this case the lower amount is BDT 177,000
Applicable slab
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;
Other than Company:Company at the rate of
15%
Capital Gain
Sold Within 5 yrs of
purchase tax at normal
slab rate
Sold after 5 yrs of purchase:
1.Slab rate on total income; or
2.Tax on capital Gain at 15%
and on other income, normal
slab rate
-Whichever is lower
Charge of additional tax [Section - 16B]:
Notwithstanding anything contained in any other provision of the Ordinance, where 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. [Amended FA 2016]

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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) Any pay or wages
b) Annuity
c) Pension –Totally exempted (due to or received by an assessed) as per 6th Schedule (Part-A) Para-8
d) Gratuity – Exempted up to Tk. two crore fifty lakh received by an assessee 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 or dearness pay (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 referred in sub rule (1)
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 made to an employee by an employer in the form of cash or any other form but
excluding the following:
a) Basic Salary
b) Festival bonus
c) Incentive bonus
d) Arrear 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 17 of 178
e) Advance Salary
f) Leave encashment
g) Leave Fare Assistance (LFA)
h) Overtime
i) Any benefit, whether convertible into money or not, made to an employee by an employer, other than-
j) 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, due to or received, in connection with the termination / modification of
any terms and conditions relating to employment.
b) Any payment, due to or received, 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;
(d) His 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 DCT may, on the basis of application made to him by the assessee, determine the tax payable as if the salary,
payment or interest had been received by the assesse 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 maid. 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

Page 18 of 178
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 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) Any income accruing to or derived by a provident fund to which Provident Fund Act, 1925(XIX of 1925)
applies.
(b) Any income accruing to or derived by Workers Profit Participation Fund established under Bangladesh Labour
Act, 2006, subject to any such conditions and limits as may be prescribed.
(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 not exceeding fifty thousand taka (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) (Para 24 A)
(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: -
(a) 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]
(b) 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)
(c) 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.)
(d) 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]
(e) All allowances and benefits (except basic salary and festival bonus) of Govt. employees are exempted from
payment of tax [SRO No: 198 dated 30/06/2015]

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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 and for making a false statement under section 165.
Tax on Tax
If salary tax is borne by the employer, then 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
If rental value is not given, 25% of the Basic Salary shall be used for computation of total income of an
assessee.

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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.
Provided that-
(1) Medical expenses or medical allowance not exceeding taka ten lakh received or receivable by an
employee being a person with disability shall not be included in his total income;
(2) Medical expenses reimbursed by an employer to an employee, other than an employee who is a
shareholder director, for a surgery relating to heart, kidney, eye, liver and cancer of the employee,
shall not be included in the total income of such employee.
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-4)
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)
Particulars 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

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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)
i) Investment at Govt. Treasury bond (Para-28)
j) Any sum invested in the purchase of one computer or one laptop by an individual assessee (Para-23).
[B] Donations to:
1. Rural charitable hospital approved by the Government (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)
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
Whichever is lower is
exempted

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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.
Allowable Investment Allowance:
The allowable investment allowance is the lower amount of the following three:
25% 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 eligible
amount
Tax rebate
@ 15% on 1st
eligible
amount Tk. 2,50,000
@12% on next eligible
amount Tk. 5,00,000
@10% on the remaining
eligible amount
Income tax rate for the assessment year 2015-2016
Income Slab Rate Minimum Tax
On the First Tk. 2,50,000/- of total income Nil After rebate, minimum tax for individual tax payer is:
1. Tk. 5,000 in case of Dhaka and Chittagong city
corporation area,
2. Tk. 4,000 for each city corporation area
3. Tk. 3,000 for other areas if total income exceeds
the minimum taxable income
On the next Tk. 4,00,000/- of total income 10%
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)
Threshold limit in case of parents or legal guardian of any person with disability will be 25,000 taka more. If both
father and mother are assesses then one will avail this benefit.
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.

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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.
The amount deducted shall be deposited to the credit of the Govt. as follows: (as per S.R.O no 259 dated 10 Sep
2016.
Time of deduction or collection Date of payment to the credit of Govt.
a) In case of any deduction or collection made in any
month from July to May of a year
Within two weeks from the end of the month in which
the deduction or collection was made
b) In case of any deduction or collection made in any
day from the first to the twentieth day of the June of
a year
Within days from the end of the month in which the
deduction or collection was made
c) In case of any deduction or collection made in any
other dates of the month of June of a year
The next following day in which the deduction or
collection was made

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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 reference: Lal Bhai
Dolpat Bhai vs. CIT Bombay, 1952)
Section 23:
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.

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Section 51:
Section – 51: Deduction at source from interest on securities
1. Any person responsible for issuing a security of the government or a security approved by the Government,
income of which is classifiable under the head "Interest on securities", shall collect, unless the Government
otherwise directs, income tax at the rate of five percent (5%) upfront on interest or discount receivable on
maturity on such security.
2. If the security mentioned in sub-section (1) is a security based on Islamic principles, income tax shall be
deducted or collected at the rate of five percent (5%) on profit or discount at the time of payment or credit;
whichever is earlier.
3. Income tax shall not be collected or deducted at source if the security mentioned in sub-section (1) is a Treasury
bond or Treasury bill issued by the Government.
Example (Upfront Systems);
A person purchase securities of Tk. 10,000,000 at 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 at 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 any income arising from, or loss sustained, in the business.
(4) The Deputy Commissioner of Taxes may, by notice in writing, require any person 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 of which such person was the owner, or in which he had beneficial interest at any time during the period
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.

Page 26 of 178
specified in the notice, as the Deputy Commissioner of Taxes may consider necessary for the purpose of ascertaining
whether tax has been borne in respect of the interest on all those securities 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.

Page 27 of 178
Part Four: Income from House Property
Introduction:
As per Income Tax Ordinance, 1984 house property means any building (including furniture, fixture, fittings etc.) and
land appurtenant thereto owned by the assesses and rented for commercial or residential purposes. Property
situated outside Bangladesh should also be assessed according to the same provision of section 24 of the Income Tax
Ordinance, 1984. Rental income derived from vacant plots of land will not be treated as house property income
rather it will be treated as income from other sources u/s 33. If an assessee lets out his machinery, plant, or
furniture along with building and the letting out building is inseparable from the letting of machinery, plant or
furniture, the income must necessarily be assessed as income from other sources and in such a case there is no
room for disintegrating the rent or assessing a part of the rent as income from house property.
Section 24: Income from House Property
Ownership of the property:
The tax on house property income is upon the owner (either legal or beneficial) and not upon the occupant. The mere
existence of a dispute regarding the title to ownership of a certain property cannot of itself hold up an assessment
even if a suit has been filed, otherwise it would be open to an assessee to delay assessment indefinitely. The DCT has
prima facie the power to decide whether the person sought to be taxed is the owner of the property.
For example, if a person (a government employee) gives rent to the government for the quarter and received rent @
Tk. 10,000 per month for letting it out. This house property income shall not be added to his HP income, as he does
not possess the ownership of the house. Rather it would be added to his ‗income from other sources‘.
Assessment of Co-owner:
As per section 24(2), where property is owned by two or more persons and their respective shares are definite and
ascertainable, the co-owners should not be assessed in respect of their income from such property as an association of
persons (AOP), but each co-owner must be assessed individually in respect of his share of house property income.
Though co-heirs may possess the property jointly under the Muslim law, the shares of co-heirs under that law are
definite and ascertainable, and therefore each of the heirs must be separately assessed u/s 24 in respect of his share
of house property income.
For example, Mr. A having a building at Motijhel C/A received rent @ Tk. 1,000,000 per month but after his death
the property is divided among his 4 sons (B, C, D and E) and they received Tk. 250,000 each from this building. So
according to income tax law they cannot be assessed for Tk. 1,000,000 aggregately as an AOP, rather portion of their
receipt will be added up with their individual income and they will assessed individually.
Self-occupied property:
In respect of house property, no tax is payable if the owner occupies the property for his own residence or for the
purpose of his business or profession the profits of which are assessable to tax u/s 28.
Section 2(3): Annual Value
Income tax is levied not upon the actual income from the property but upon the notional income based an annual
value. Annual value is defined in section 2(3)as ―The sum for which the property might reasonably be expected to let
from year to year and any amount received by letting out furniture, fixture, fittings etc.‘‘. That is, the sum for which
the owner could let the premises having regard to all the prevailing circumstances such as local conditions and the
demand for house in that particular locality. Where the property is let out and the owner receives the rent, the annual
value may be more or less, than the actual rent received, as the annual value is only a hypothetical sum. In case where
Study References:
Section; 2(3), 24, 25, 19(22), 19(30), 53A
Sixth Schedule (Part A); Para 1, Para 38
SRO 454 (Serial No. 18) Date-31/12/1980

Page 28 of 178
the actual consideration received by the owner from his tenant does not represent the annual value, evidence of such
annual value may be afforded by the rents paid for similar and similarly situated properties in the locality.
Grossing-up when the owner’s burden borne by the tenant:
It is necessary to take into account the whole of the consideration exacted by the owner for the right to use and
occupy the property. For example, where the tenant agrees to pay the service charge which is actually payable by the
owner, the total consideration paid by the tenant is the house rent plus the service charge and that is the figure which
may be taken as evidence of the annual value by grossing-up.
Treatment of advance when it is not adjustable against house rent:
In case the advance received by the owner is not adjustable against house rent then such advance will be treated as
house property income as per section 19(22) of the Income Tax Ordinance, 1984. However, such advance may be
allocated into 5 years including 1st
year in equal proportion if the assessee opts so. Where such advance or part
thereof is refunded by the owner then the amount so refunded shall be deducted if it is taken as income as per section
19(22).
Maintenance of separate bank account by the owner of the house property (Rule-8A):
Where any person having ownership or possession of any house property, whether used for residential or commercial
purpose, receives any rent exceeding Tk. 25,000/- per month shall have to maintain a separate bank account for the
purpose of depositing rent and advance (if any) received from such house property. He shall also maintain a separate
register for recording particulars of tenants and amount received or receivable from the tenants.
DCT can impose penalty for any violation of this rule as per section 123(2). The maximum penalty is 50% of tax
payable on house property income or Tk. 5,000/-, whichever is higher.
Deduction of tax at source from house rent (Section 53A):
Tax is to be deducted at 5% at source by the following tenants from any amount of payment of house rent:
 Govt. organization
 NGO
 Company
 Bank (including co-operative bank)
 University
 Medical/Dental/Engineering College,
 Any school and college
 Hospital/clinic/diagnostic center.
For Example, P Bank let a house at Tk. 50,000 per month with advance of Tk. 500,000 which is adjustable with rent
at Tk. 10,000 per month, so-
TDS on rent = Tk. (50,000*5%) = Tk. 2,500
Payment in each month = Tk. (50,000 - 10,000, - 2,500) = Tk. 37,500
Annual Value = Tk. (50,000*12) = Tk. 600,000
TDS on Tk. 500,000 (at the time of payment) = 0
Exemption from payment of tax:
(1) Income from house property held under trust or other legal obligation wholly for religious or charitable purpose
is exempt from payment of tax as per 6th
schedule (part-A) paragraph-1(1). However, this provision will not be
applicable for NGO.
(2) House property income of any chamber of commerce and industry ( i.e. FBCCI or MCCI etc.) is completely tax
free as per SRO no 210, dated 01/07/2013.

Page 29 of 178
Allowable deductions from annual value to derive income from house property (Section-25):
In computing house property income, the following allowances are deductible from the annual value:
1. Repairs and maintenance:
The following expenditures relating to repairs, maintenance and provision of basic services are granted as a
deduction. Where the property is let out for residential purposes, the allowable deduction is 1/4th of the annual value
and where it is let out for commercial purpose the allowable deduction is 30% of the annual value:
(a) Repairs;
(b) Expenditure relating to collection of rent;
(c) Water and sewerage;
(d) Common electricity;
(e) Salary of darwan, security guard, pump-man, lift-man, caretaker
(f) All other expenditure related to maintenance and provision of basic services.
However, if it is not really spent or partly spent then the remaining unspent amount shall be deemed to be the
income from house property as per section 19(30).
2. Land development tax*;
3. Municipal tax*;
4. Ground rent*;
5. Insurance Premium*,
6. Vacancy allowance (if the property remain vacant during a part of the year);
7. Where the let out property is acquired, constructed, repaired, renewed or reconstructed with loan then the interest
payable for the year on such loan*;
8. Where the let out property has been constructed with borrowed capital and there was no house property income
during the period of construction, the interest payable during the period of construction will be allowable in 3
equal installments from first 3 years of letting out*;
9. Irrecoverable rent:
Relief in respect of irrecoverable rent has been granted through S.R.O. No:-454-L/80 dated 31-12-1980 if the
following conditions are fulfilled:
a. The tenancy is bona-fide;
b. The defaulting tenant has vacated, or steps have been taken to compel him to vacate the property;
c. The defaulting tenet is not in occupation of any other property of the assessee;
d. The assessee has taken all reasonable steps to institute legal proceedings for the recovery of the unpaid rent
or satisfies the Deputy Commissioner of Taxes that legal proceedings would be useless and;
e. The annual Value of the property to which the unpaid rent relates has been included in the assessed income
of the year during which that rent was due and income tax has been duly paid on such assessed income;
The concession given here appears to be an exemption but it is actually a deduction as that part of rent which will be
irrecoverable and which has already been charged in the preceding year will be deducted from the total income in the
subsequent year.
*If the full house is not rented (partly used by owner or his dependent) then all of these deductions shall be made
proportionately.
Sixth Schedule (Part A) Para-38:
Any income derived from any building situated in any area of Bangladesh, not less than five storied having at
least ten flats, constructed at any time between the first day of July, 2009 and the thirtieth day of June, 2014 (both
days inclusive), for ten years from the date of completion of construction of the building, except the buildings
situated in any areas of City Corporation, Cantonment Board, Tongi Upazilla, Narayanganj Paurashava, Gazipur
Paurashava and any Paurashava under Dhaka District are excluded from the total income.

Page 30 of 178
Part Five: Agricultural Income:
Important sections of Agricultural Income:
Section 27: Deductions from Agricultural Income:
(1) In computing the income under the head "Agricultural income", the following allowances and deductions
shall be made, namely:
(a) any land development tax or rent paid in respect of the land used for agricultural purposes;
(b) any tax, local rate or cess paid in respect of the land used for agricultural purposes, if such tax, rate or
cess is not levied on the income arising or accruing, or deemed to accrue or arise, from agricultural
operations, or is not assessed, at a proportion or on the basis of such income;
Study References:
Section; 2(1), 26, 27, 35, 19(17), 19(19)
Rule: 31 and 32
Third Schedule
Sixth Schedule (Part A); Para 27, Para 29 and Para 45
Section 2(1):
Agricultural income means-
(a) any income derived from any land in Bangladesh and used for agricultural purposes -
(i) by means of agriculture; or
(ii) by the performance of any process ordinarily employed by a cultivator to render marketable the
produce of such land; or
(iii) by the sale of the produce of the land raised by the cultivator in respect of which no process, other
than that to render the produce marketable, has been performed; or
(iv) by granting a right to any person to use the land for any period; or
(b) any income derived from any building which -
(i) is occupied by the cultivator of any such land as is referred to in sub-clause (a) in which any process
is carried on to render marketable any such produce as aforesaid;
(ii) is on, or in the immediate vicinity of such land; and
(iii) is required by the cultivator as the dwelling house or store-house or other out-house by reason of his
connection with such land;
Section 26; Agricultural income:
1. The following income of an assessee shall be classified and computed under the head "Agricultural income",
namely:-
(a) any income derived by the assessee which comes within the meaning of "agricultural income" as
defined in secion 2(1);
(b) the excess amount referred to in section 19(17);
(c) the excess amount referred to in section 19(19).
2. Agricultural income derived from the sale of tea grown and manufactured by the assesse shall be computed in
the prescribed manner.
3. Where the Board, by notification in the official Gazette, so directs, agricultural income from the sale of
rubber, tobacco, sugar or any other produce grown and manufactured by the assessee may be computed in the
manner prescribed for the purpose.

Page 31 of 178
(c) (i) Subject to sub-clauses (ii) and (iii), the cost of production, that is to say, the expenditure incurred
for the following purposes, namely:
a. for cultivating the land or raising livestock thereon;
b. for performing any process ordinarily employed by a cultivator to render marketable the produce of
the land;
c. for transporting the produce of the land or the livestock raised thereon to the market; and
d. for maintaining agricultural implements and machinery in good repair and for providing upkeep of
cattle for the purpose of cultivation, processing or transportation as aforesaid;
(ii) Where books of accounts in respect of agricultural income derived from the land are not
maintained, the cost of production to be deducted shall, instead of the expenditure mentioned in sub-
clause (i). be sixty per cent of the market value of the produce of the land;
(iii) no deduction on account of cost of production shall be admissible under this clause if the
agricultural income is derived by the owner of the land from the share of the produce raised through
any system of sharing of crop generally known as adhi, barga or bhag;
(d) any sum paid as premium in order to effect any insurance against loss of, or damage to, the land or
any crop to be raised from, or cattle to be reared on, the land;
(e) any sum paid in respect of the maintenance of any irrigation or protective work or other capital assets;
and such maintenance includes current repairs and, in the case of protective dykes and embankments,
all such work as may be necessary from year to year for repairing any damage or destruction caused
by flood or other natural causes;
(f) a sum calculated at the rate as provided in the Third Schedule on account of depreciation in respect of
irrigation or protective work or other capital assets constructed or acquired for the benefit of the land
from which agricultural income is derived or for the purpose of deriving agricultural income from the
land, if the required particulars are furnished by the assessee;
(g) where the land is subject to a mortgage or other capital charge for purposes of reclamation or
improvement, the amount of any interest paid in respect of such mortgage or charge;
(h) where the land has been acquired, reclaimed or improved by the use of borrowed capital, the amount
of any interest paid in respect of such capital;
(i) where any machinery or plant which has been used by the assessee exclusively for agricultural
purposes has been discarded, demolished or destroyed in the income year, the amount actually written
off on that account in the books of accounts of the assessee;
(1) subject to the maximum of the amount by which the written down value of the machinery or
plant exceeds the scrap value thereof if no insurance, salvage or compensation money has
been received in respect of such machinery or plant; and
(2) subject to the maximum of the amount by which the difference between the written down
value and the scrap value exceeds the amount of insurance, salvage or compensation money
received in respect of such machinery or plant;
(j) where any machinery or plant which has been used by the assessee exclusively for agricultural
purposes has been sold or transferred by way of exchange in the income year, the amount actually
written off on that account in the books of accounts of the assessee, subject to the maximum of the
amount by which the written down value of the machinery or plant exceeds the amount for which it
has been actually sold or transferred; and
(k) any other expenditure, not being in the nature of capital expenditure or personal expenditure, laid out
wholly and exclusively for the purpose of deriving agricultural income from the land.

Page 32 of 178
(2) Notwithstanding anything contained in sub-section (1), no deduction shall be allowed under this section in respect
of any interest on which tax has not been paid or deducted in accordance with the provisions of Chapter VII.
Section 35 - Method of accounting:
Books of accounts shall be maintain in:
1. Income from Business and Profession
2. Agricultural Income
3. Income from Other Sources
Rule-31 and 32: Sale of Tea and Rubber
Section 19 (17) and 19(19):
For example, an agricultural machinery
Cost price Tk. 100
Less: Depreciation (30)
WDV Tk. 70
Now, if machine is sold at Tk. 78 or Tk. 68 or Tk. 114 treatment of gain will be as follows;
Case – 1: Tk. 8 is agricultural income
Case – 2: Tk. 2 is agricultural loss
Case – 3: Tk. 30 is agricultural income and tk. 14 is capital gain
Rule – 31: Computation of income derived from the sale of tea
1. Income derived from the sale of tea grown and manufactured by the seller in Bangladesh shall be computed as
if 40% of such income was derived from business and 60% of such income was derived from agriculture:
Provided that in computing, such income from business, an allowance shall be made in respect of the cost of
planting bushes in replacement of bushes that have died or become permanently useless in an area already
planted, unless such area has previously been abandoned:
Provided further that in computing such income an allowance shall be made in respect of the expenditure
incurred in the income year by the assessee in connection with the development of the new areas for bringing
them under tea cultivation.
Rule – 32: Computation of income derived from the sale of rubber
1. Income derived from the sale of rubber grown and manufactured by the seller in Bangladesh shall be computed
as if 40% of such income was derived from business and 60% of such income was derived from agriculture.
Provided that in computing such income an allowance shall be made in respect of the expenditure incurred in
the income year by the assesse in connection with the development of the new areas for bringing them under
rubber cultivation.
Section – 19(17):
Where any machinery or plant exclusively used by an assessee for agricultural purposes has been disposed of in
any income year and the sale proceeds thereof exceeds the written down value, so much of the excess as does not
exceed the difference between the original cost and the written down value shall be deemed to be the income of
the assessee for that income year classifiable under the head "Agricultural income".

Page 33 of 178
For example, an agricultural machinery
Cost price Tk. 100
Less: Depreciation (30)
WDV Tk. 70
Now, if machine is destroyed and insurance claim and sale of scrap generate tk. 78 or tk. 68 or tk. 114 treatment of
such gain will be as follows;
Case – 1: Tk. 8 is agricultural income
Case – 2: Tk. 2 is agricultural loss
Case – 3: Tk. 30 is agricultural income and tk. 14 is capital gain.
Sixth Schedule (Part A):
Third Schedule: Computation of Depreciation Allowance:
Para–1; Depreciation allowance on assets used for agricultural purposes
Para – 2; Allowance for depreciation
See the details from the Income Tax Ordinance 1984.
[Change in F. A. 2015]
1. Depreciation rate for imported computer software is allowed at the rate of 10% (Serial No. 3(b) (vii) of
Depreciation Rate Table in Paragraph 3).
2. Cost of motor vehicles, being passenger vehicles or sedan cars, not plying for hire, shall be deemed not to
exceed twenty five (25) lakh taka for the calculation of written down value for depreciation.
Section – 19(19):
Where any insurance, salvage or compensation moneys are received in any income year in respect of any
machinery or plant which having been used by the assessee exclusively for agricultural purpose is discarded,
demolished or destroyed and the amount of such moneys exceed the written down value of such machinery or
plant, so much of the excess as does not exceed the difference between the original cost and the written down
value less the scrap value shall be deemed to be the income of the assessee for that income year classifiable under
the head "Agricultural income".
Para - 27:
Notwithstanding anything contained in any order or regulation for the time being in force, any income of an
individual, being an indigenous Hillman of any of the hill districts of Rangamati, Bandarban and Khagrachari,
which has been derived solely from economic activities undertaken within the said hill districts.
Para - 29:
Any income, not exceeding two-lakh taka, chargeable under the head "Agricultural income" of an assessee, being
an individual, whose only source of income is agriculture.
Para - 46:
An amount equal to fifty (50) percent of the income of an assessee derived from the production of corn/maize, and
sugar beet.

Page 34 of 178
Part Six: Capital Gain
Capital Gain:
Important sections of Capital Gain:
Section 2(15) and 31:
Study References:
Section; 2(15), Capital Asset
31-Capital Gain
32-Manner of computing capital gain; read with rule - 42
Second Schedule; Tax rate on capital gain
Sixth Schedule (Part A), Para 18, Para 43
Share Market: SRO No. – 269; date – 01/07/2010.
Section-2(15): Capital Assets
"Capital asset" means property of any kind held by an assessee, whether or not connected with his business or
profession, but does not include-
(a) any stock-in-trade (not being stocks and shares), consumable stores or raw materials held for the purposes
of his business or profession; and
(b) personal effects, that is to say, movable property (including wearing apparel, jewellery, furniture, fixture,
equipment and vehicles), which are held exclusively for personal use by, and are not used for purposes of
the business or profession of the assessee or any member of his family dependent on him;
(c) [agricultural land in Bangladesh, not being land situated
(i) in any area which is comprised within the jurisdiction of Dhaka, Narayanganj and Gazipur districts,
Chittagong Development Authority (CDA), Khulna Development Authority (KDA), Rajshahi
Development Authority (RDA), a City Corporation, Municipality, Paurashava, Cantonment Board; or
(ii) in any area within such distance not being more than five miles from the local limits of Rajdhani
Unnayan Kartripakya (RAJUK), Chittagong Development Authority (CDA), Khulna Development
Authority (KDA), Rajshahi Development Authority (RDA), a City Corporation, Municipality,
Paurashava, Cantonment Board referred to in paragraph (i), as the Government may having regard to
the extent of, and scope for, urbanisation of that area and other relevant considerations, specify in this
behalf by notification in the official Gazette;]F.A. 2011.
[ Sub-clause (c) inserted by F.A. 2011 and
subsequently omitted by F.A. 2014]
Section-31: Capital gains
1. Tax shall be payable by an assessee under the head "Capital gains" in respect of any profits and gains
arising from the transfer of a capital asset and such profits and gains shall be deemed to be the income of
the income year in which the transfer took place[.][Subs F. A. 2011]
[Proviso][Deleted F.A. 2011]

Page 35 of 178
Section 32: Computation of capital gains:
Capital gain is computed as higher of the full value of the consideration received or accruing from the transfer of the
capital asset or fair market value thereof less (i) any expenditure incurred solely in connectionwith the transfer of the
capital asset, or (ii) the cost of acquisition of the capital asset and any capital expenditure incurred for any
improvements thereto but excluding any expenditure in respect of which any allowance is admissible under any
provision of section 23, 29 and 34.
Capital gain is from purchased property:
Capital gain = Sales price – Acquisition price
Where;
Sales price = Higher of full consideration or fair market value
Acquisition price = actual cost + other expenses to make it useable
1. Capital gain from property gifted, transferred on trust or distributed on liquidation of company or firm etc.:
Capital gain (where actual cost of acquisition ascertainable) = Sales price – (Acquisition price of the previous
owner less depreciation allowed).
For example, Mr. A is gifted a land by Mr. X, cost of that to Mr. X was Tk. 10 lac and and accumulated
depreciation is Tk. 5 lac. Few years later Mr. A gifted it to Mr. B. B sales the land for Tk. 15 lac. Then capital gain
for B is
Capital gain = Tk. (25-10-5) = Tk. 10 lac
Capital gain (where actual cost of acquisition cannot be ascertained) = Sales price – (Fair market value at the date
on which the capital asset became the property of the previous owner).
For example, Mr. A is gifted a land by Mr. X, which have a fair market value to Tk. 10 lac. Few years later Mr. A
gifted it to Mr. B. B sales the land for Tk. 25 lac. Than capital gain for B is,
Capital gain = Tk. 25 lac – Tk. 10 lac = Tk. 15 lac
2. Capital gain from property by succession, inheritance or devolution:
Capital gain = Sales price – Fair market value prevailing at the time of the property became the asset of the
assessee
For example, Mr. A has some land. Few years later Mr. A became dead and all of his land goes to his son Mr. B,
which has a fair market value of Tk. 20 lac at that moment. B sells the land for Tk. 25 lac in two years later. Than
capital gain for B is:
Capital gain = Tk. 25 lac – Tk. 20 lac = Tk. 5 lac
Capital gain on sale of property of business and profession is tax free if another property purchased within one (1)
year (before or after). For example,
Capital machinery with cost of Tk. 1,000
Sales price TK. 1,600
Capital Gain Tk. 600

Page 36 of 178
Purchase another building within one year (before or after) by this capital gain than this tk. 600 is tax-free. But,
Serial Situation Consequences
1 If purchase price is tk. 600 No gain tax and tax depreciation is not allowable for that property.
2 If purchase price is tk. 500 Gain tax on tk. 100 and tax depreciation is not allowable for that property.
3 If purchase price is tk. 900 No gain tax, but tax depreciation is allowable for tk. 300.
 Gain on sale of govt. securities is tax-free [Section 32(7)].
Second Schedule: Para 2 (Tax payable on capital gain)
Sixth Schedule (Part A): (Exclusion from income):
1. Para 11- A: Income from dividend received from a company listed in any stock exchange in Bangladesh up
to twenty five thousand taka. (Amended FA 2015)
2. Para–18: share of capital gain from partnership business
3. Para-20: any income up to Tk. 2.5 crore received by an assessee as gratuity. (Amended FA 2015)
4. Para-22A: income from mutual or unit fund up to Tk. 25,000.
5. Para-28: 50% income from export business.
6. Para-29: agricultural income up to Tk. 2,00,000 of an individual assessee, whose only source of income is
agriculture
7. Para–33: income from software and IT business up to 30 June 2024.
8. Para–39: income from SME business, turnover not more than Tk. 36,00,000.
9. Para–40: income from zero coupon bond issued by bank, insurance or any financial institution upon
approval of BB.
Where the total income of an assessee includes any income chargeable under the head "Capital gains" (hereinafter
referred to as the "said income"), the tax payable by him on his total income shall be-
(a) in the case of a company-
(i) tax payable on the total income as reduced by the said income had such reduced income been the total
income; plus
(ii)tax at the rate of fifteen per cent on the whole amount of the said income;
Simply tax payable on capital gain will be @ 15% in the case of a company.
(b) in the case of a person other than a company-
(i) where the said income arises as a result of disposal by the assessee of his capital assets after not more
than five years from the date of their acquisition by him, tax payable on the total income including the
said income (means capital gain will be taxed at normal slab rate); and
(ii) where the said income arises as a result of disposal by the assessee of his capital assets after five years
from the date of their acquisition by him, tax payable on the capital gains at the rate applicable to his
total income including the said capital gains, or tax at the rate of fifteen per cent on the amount of the
capital gains whichever is the lower.
Simply we can conclude tax on capital gain if the capital asset disposed within five years period of its acquisition
at normal slab rate but if the capital asset disposed beyond five years period then tax payable on capital gain at
normal slab rate applicable or tax payable at 15% whichever is lower.

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