May Be Followed PDF

TABLE OF CONTENTS
TABLE OF CONTENTS
TABLE OF CONTENTS
TABLE OF CONTENTS
MAJOR CHANGES IN 2015 - 2016................................................................. 1

1 Major changes in Income Tax.............................................................. 3
2 Major changes in Value Added Tax (VAT)................................................ 22
SUMMARY OF INCOME TAX........................................................................ 23

3 Important definitions...................................................................... 25
INCOME ......................................................................................... 26
4 Residential status.......................................................................... 26
5 Scope of the total income................................................................ 26
6 Heads of income............................................................................ 27
7 Income from salary........................................................................ 27
8 Interest on securities...................................................................... 29
9 Income from house property............................................................. 30
10 Agricultural income........................................................................ 31
11 Income from business or profession..................................................... 32
11.1 Admissible deductions.............................................................. 33
11.2 Deductions not admissible in certain circumstances.......................... 35
11.3 Normal depreciation allowance.................................................. 36
11.4 Initial depreciation................................................................. 38
11.5 Accelerated depreciation allowance............................................. 38
11.6 Amortization of license fees...................................................... 39
12 Capital gains................................................................................ 39
13 Income from other sources............................................................... 40
14 Deemed income............................................................................ 41
TAX RATE STRUCTURE............................................................................ 44

15 Personal tax rate structure............................................................... 44
15.1 Tax on capital gain.................................................................. 45
15.2 Other tax rates...................................................................... 45
15.3 Minimum tax......................................................................... 45
15.4 Surcharge on individual assessee................................................. 45
15.5 Incidence of tax on non-resident assessee...................................... 46
16 Corporate tax rate structure............................................................. 46
16.1 Minimum tax......................................................................... 47
16.2 Additional tax....................................................................... 48
16.3 Excess profit tax..................................................................... 48
TABLE OF CONTENTS
17 Tax deducted at source................................................................... 48

18 Payment of tax deducted at source..................................................... 58
19 Final settlement of tax liability.......................................................... 59
20 Set-off and carry forward of loss........................................................ 61
21 Carry forward of depreciation allowance.............................................. 62
FILING OF RETURN & PAYMENT OF TAX........................................................ 63

22 Filing of return of income................................................................. 63
23 Filing of revised return.................................................................... 64
24 Return of withholding tax................................................................. 64
25 Payment of tax on the basis of return.................................................. 65
26 Advance payment of tax.................................................................. 65
27 Mode of payment........................................................................... 65
ASSESSMENT........................................................................................ 66
28 Provisional assessment.................................................................... 66
29 Assessment on correct return............................................................ 66
30 Universal self-assessment................................................................. 66
31 Spot assessment............................................................................ 67
32 Assessment after hearing................................................................. 67
33 Assessment on the basis of report of a Chartered Accountant...................... 68
34 Best judgement assessment.............................................................. 68
35 Other assessments......................................................................... 68
TAX INCENTIVE..................................................................................... 69
36 Tax exemption.............................................................................. 69
37 Reduced rate of tax........................................................................ 87
38 Tax rebate................................................................................... 90
39 Conditions for tax exemption for newly established industrial undertaking and
newly established physical infrastructure facility.................................... 93
40 Investment allowances eligible for tax credit......................................... 93
41 CSR activities eligible for tax credit.................................................... 95
42 Special tax treatment..................................................................... 97
43 Avoidance of double taxation............................................................ 97
TABLE OF CONTENTS
TRANSFER PRICING................................................................................ 98
44 Transfer pricing............................................................................. 98
44.1 Procedure from record keeping to submission of return...................... 98
44.2 Assessment procedure.............................................................. 99
44.3 Computation of arm’s length price............................................... 99
44.4 Reference to Transfer Pricing Officer...........................................101
44.5 Maintenance and keeping of information, documents and records........101
44.6 Statement of international transaction to be submitted....................101
44.7 Report from an accountant to be furnished...................................101
OFFENCES, PENALTIES & PUNISHMENTS......................................................102

45 Offences, penalties & punishments....................................................102
SUMMARY OF VALUE ADDED TAX................................................................105

46 Taxes imposed under VAT Act, 1991....................................................107
47 Goods and services chargeable to VAT.................................................107
48 Persons responsible to pay the VAT.....................................................108
49 VAT deduction at source..................................................................108
50 Deposit of deducted VAT.................................................................108
51 Scope of VAT and specified rates........................................................109
SUMMARY OF GIFT TAX..........................................................................115

52 Gift tax.....................................................................................117
53 Exemption from Gift Tax.................................................................117
54 Rates of Gift Tax...........................................................................118
55 Return of Gift Tax.........................................................................118
MAJOR CHANGES IN
2015 - 2016
MAJOR CHANGES IN
2015 - 2016
Bangladesh Tax Handbook 2015-2016 1

1. Major changes in income tax
1.01 Income exemption limit [Finance Act, 2015]
The ceiling of maximum tax exempted income for the individual assessee
has been enhanced from BDT 220,000 to BDT 250,000 for male, from BDT
275,000 to BDT 300,000 for women and senior citizens aging over 65 years,
from BDT 350,000 to BDT 375,000 for physically challenged people and from
BDT 400,000 to BDT 425,000 for gazetted war-wounded freedom fighters.
These changes will be in effect from 1 July 2015.
1.02 Personal tax rate structure [Finance Act, 2015]
The 6 tier income slabs and tax rate structure applicable for individual
assessee (including non-resident Bangladeshi), Hindu undivided family,
firm, association of persons, artificial juridical person and Non-Government
Organization (NGO) have been changed with effect in the Income Year
2014-2015 and Assessment Year 2015-2016. A comparative personal tax rate
structure is shown below –
Assessment Year: 2015-2016 Assessment Year: 2014-2015

(Income Year: 2014-2015) (Income Year: 2013-2014)
Income Rate of Income Rate of
tax tax
On the first BDT 250,000 Nil On the first BDT 220,000 Nil
of total income of male of total income of male
assesse assesse
of total income of female of total income of female
assesse assesse
of total income of persons of total income of persons
aged 65 years & above aged 65 years & above
On the first BDT 375,000 Nil On the first BDT 350,000 of Nil
of total income of physi- total income of physically
cally challenged assessee challenged assessee
of total income for of total income for gazett-
gazetted war wounded ed war wounded freedom
freedom fighters fighters
On the next BDT 400,000 10% On the next BDT 300,000 of 10%
of total income total income

Assessment Year: 2015-2016 Assessment Year: 2014-2015
(Income Year: 2014-2015) (Income Year: 2013-2014)
On the next BDT 25% On the next BDT 3,000,000 25%
3,000,000 of total income of total income
On the balance of total 30% On the balance of total 30%
income income
Non-resident foreigner 30% Non-resident foreigner 30%
assessee assessee
1.03 Minimum tax [Finance Act, 2015]
Minimum tax liability for the individual assessee (including non-resident

Bangladeshi), Hindu undivided family, firm, association of persons, artificial
juridical person and Non-Government Organization (NGO) has been changed
in the following manner –
Location of assessee Assessment Year Assessment Year

2015-2016 2014-2015
Assessees residing in Dhaka and BDT 5,000 BDT 3,000

Chittagong City Corporation area
Assessees residing in other City BDT 4,000 N/A

Corporation area
Assessees residing in other than City BDT 3,000 N/A
Corporation area
Assessees residing in Paurashavas at N/A BDT 2,000

district town
Assessees residing in areas other N/A BDT 1,000
than those mentioned above
1.04 Surcharge on individual assessee [Finance Act, 2015]
The following table shows a comparative analysis of the surcharge applicable

on individual assessee based on his/her net wealth in Assessment Year 2015-
2016 and 2014-2015 -

Assessment Year 2015-2016 Assessment Year 2014-2015
Rate of Rate of
Net worth value Net worth value
surcharge surcharge
Up to BDT 2.25 crore Nil Up to BDT 2 crore Nil
More than BDT 2.25 crore 10% More than BDT 2 crore 10%
up to BDT 10 crore up to BDT 10 crore
More than BDT 10 crore up 15% More than BDT 10 crore 15%
to BDT 20 crore up to BDT 20 crore
More than BDT 20 crore up 20% More than BDT 20 crore 20%
to BDT 30 crore up to BDT 30 crore
More than BDT 30 crore 25% More than BDT 30 crore 25%
Minimum surcharge has been fixed at BDT 3,000 for the Assessment Year 2015-
2016 in case of net wealth exceeding BDT 2.25 crore, whereas there was no
minimum limit of surcharge for the Assessment Year 2014-2015.
1.05 Corporate tax rate

Tax rates applicable for certain companies have been changed as follows –
Assessment Year Assessment Year

Sl. Applicable for 2015-2016 2014-2015
Rate of tax Rate of tax
1. Non-publicly traded company 35% 35%
2. Publicly traded company 25% 27.5%
except for banks, insurance
company, other financial
institutions, merchant bank,
cigarette manufacturing
companies and mobile
operator companies
If such company transfers at
least 20% share through IPO,
it will enjoy 10% rebate on tax
in the respective year
3. Bank, insurance company and
financial institution
- Publicly traded 40% 42.5%
- Non-publicly traded 42.5% 42.5%
- Bank, insurance company 40% 42.5%
and financial institution
obtaining approval from
Government in 2013

Assessment Year Assessment Year
Sl. Applicable for 2015-2016 2014-2015
Rate of tax Rate of tax
4. Merchant bank 37.5% 37.5%
5. Cigarette manufacturing
company
• Publicly traded 45% 40%
• Other 45% 45%
6. Mobile phone operator 45% 45%
company
7. Mobile phone operator 40% 40%
company converted into
public limited company in the
following manner -
• Issuing minimum 10% of
shares through IPO, of
which maximum 5% issued
through Pre-IPO
If such company transfers at
least 20% share through IPO,
it will enjoy 10% rebate on tax
in the respective year
8. Income from dividend 20% 20%
9. Cigarette manufacturing 45% -
entity other than company
10. Co-operative society 15% -
registered under the Co-
operative Society Act, 2001
10 % tax rebate offered to publicly traded companies declaring at least 30%

cash dividend has been withdrawn. The provision of 35% tax rate applicable
for publicly traded companies declaring less than 10% dividend or not paying
dividend within the specified time (60 days) has also been withdrawn.
1.06 Income year [Section – 2(35)]
Section – 2(35) regarding the definition of income year has been replaced. As
per the replaced definition the income year has been determined as follows -
XX For a newly set up business: From the date of setting up the business to
following 30 June
XX For a new source of income: From the date of existence to following 30 June

XX For a discontinued business, dissolute unincorporated body,
liquidated company: From 1 July to the date of such discontinuation
or dissolution or liquidation
XX For an unincorporated body:
-- In case of retirement or death of a partner, income year would be
from 1 July to the date of retirement or death
-- If another Partner retires or dies before 30 June, income year would
be from the date of previous Partner’s retirement or death to the
subsequent Partner’s date of retirement or death.
XX Bank, insurance or financial institution: From 1 January to 31 December
XX Other cases: From 1 July to 30 June
The replaced definition would be effective from assessment year 2016 – 2017.
As a result of this replaced definition, all assessees (except banks, insurance
and financial institutions) following a different date than 30 June as end of
income year / accounting year have to shift such income year as 1 July to
30 June. Similarly all banks, insurance and financial institutions following a
different date than 31 December as end of income year / accounting year has
to shift such income year as 1 January to 31 December.
The impact of change in definition of income year is on a company (not a

bank, insurance or financial institution) is shown below –
As per previous definition As per replaced definition
Accounting Assessment Last Accounting Assessment Last date for
period / year date for period / year submission of
Income year submission Income year return
of return
For a company 1 Jan, 2015 – 1 Jan, 2015 –
2016 - 2017 15 Jul, 2016 2016 - 2017 15 Jul, 2016
following 31 Dec, 2015 31 Dec, 2015
January – 1 Jan, 2016 – 1 Jan, 2016 –
2017 – 2018 15 Jul, 2017 2016 - 2017 31 Dec, 2016
December 31 Dec, 2016 30 Jun, 2016
accounting year / 1 Jan, 2017 – 1 Jul, 2016 –
2018 – 2019 15 Jul, 2018 2017 – 2018 31 Dec, 2017
income year 31 Dec, 2017 30 Jun, 2017
For a company 1 Apr, 2015 – 1 Apr, 2015 –
2016 - 2017 30 Sep, 2016 2016 - 2017 30 Sep, 2016
following 31 Mar, 2016 31 Mar, 2016
April – March 1 Apr, 2016 – 1 Apr, 2016 –
2017 – 2018 30 Sep, 2017 2016 – 2017 31 Dec, 2016
accounting year / 31 Mar, 2017 30 Jun, 2016
income year 1 Apr, 2017 – 1 Jul, 2016 –
2018 – 2019 30 Sep, 2018 2017 – 2018 31 Dec, 2017
31 Mar, 2018 30 Jun, 2017
For a company 1 Sep, 2015 – 1 Sep, 2015 –
2017 – 2018 15 Jul, 2017 2016 – 2017 31 Dec, 2016
following 31 Aug, 2016 30 Jun, 2016
September – 1 Sep, 2016 – 1 Jul, 2016 –
2018 – 2019 15 Jul, 2018 2017 – 2018 31 Dec, 2017
August 31 Aug, 2017 30 Jun, 2017
accounting year / 1 Sep, 2017 – 1 Jul, 2017 –
2019 – 2020 15 Jul, 2019 2018 – 2019 31 Dec, 2018
income year 31 Aug, 2018 30 Jun, 2018

So such an assessee will have to file 2 separate account statements and income
tax returns on assessment year 2016 – 2017 and there will be 2 separate
assessments for them.
Similarly an assessee (except for company) following a different date than 30

June as end of income year / accounting year has to file 2 separate calculation
statements and income tax returns on assessment year 2016 – 2017 leading to
2 separate assessments.
1.07 Charge of additional tax [Section – 16B]
Section – 16B regarding charge of additional tax has been replaced. As per the
replaced section –
XX A public limited company, except for a banking or insurance company,

which has not issued, declared or distributed dividend or bonus
share equivalent to at least 15 % of paid up capital within six months
following the income year, shall be charged additional tax at 5 % on
the undistributed profit.
XX Additional tax equivalent to the higher (a) 50% of tax liability or (b) BDT
500,000 shall be charged, if an employer employs a non-Bangladeshi
citizen / expatriate during the income year without prior approval of
the Board of Investment or any competent authority.
1.08 Charge of minimum tax for industries engaged in manufacturing of goods

[Section – 16CCC]
Minimum tax at 0.10% on gross receipts has been imposed on new industrial
undertakings engaged in manufacturing of goods for first 3 income years since
commencement of commercial production.
1.09 Un-explained investments, etc., deemed to be income [Section – 19]
3 new paragraphs have been added in Section – 19 which are Section – 19(29),
19(30), 19(31). A summary of the added paragraphs is given below –
XX Section - 19(29): Any unpaid liability of an assessee (except for
assessee engaged in real estate business) in respect of credit purchase
of any construction material for building or house property, which is
not paid within the following year of purchase has been included as
deemed income under income from other sources.
XX Section - 19(30): Unspent portion of an amount of deduction allowed
to an assessee for repair and maintenance of house property has been
included as deemed income under income from other sources.

XX Section 19(31): In case of a revised return filed under Section – 78 &
93 showing income subject to exemption or reduced rate, the amount
by which such income shown in revised return exceeds the income
shown in original return has been included as deemed income under
income from other sources.
1.10 Special tax treatment in respect of investment in residential building and
apartment [Section - 19BBBBB]
The applicable tax rate for investment in residential building and apartment
in certain areas for special tax treatment under Section - 19BBBBB has been
changed as follows –
Areas of Amount tax Amount tax Reference

residential (per sq. meter) (per sq. meter)
building or Assessment year Assessment year
apartment 2015 - 2016 2014 - 2015
Paurasabha or Plinth area up to Plinth area up Section -
any district 200 s.m: BDT 600 to 200 s.m: BDT 19BBBBB(d)
headquarter 1000
Plinth area
exceeding 200 Plinth area
s.m: BDT 800 exceeding 200
s.m: BDT 1500
Area other Plinth area up to Plinth area up to Section -
than the areas 200 s.m: BDT 400 200 s.m: BDT 700 19BBBBB(e)
specified in
19BBBBB(a)–(d) Plinth area Plinth area
exceeding 200 exceeding 200
s.m: BDT 600 s.m: BDT 1000
1.11 Voluntary disclosure of income [Section – 19E]
Through insertion of Section – 19E(3)(e), the following incomes have been

scoped out from being eligible for voluntary disclosure –
XX Income exempted from tax in the concerned income year

XX Income chargeable to reduced rate of tax under Section – 44
1.12 Allowable limit of perquisite [Section – 30 (e)]
The limit of perquisite paid to an employee which is allowable as deduction

from income from business and profession has been extended to BDT 450,000
from BDT 350,000.

1.13 Set off losses [Section – 37]
Through insertion of a proviso, any loss in respect of any income from any head has
been barred from being set off against any income from manufacturing of cigarette.
1.14 Exemption of tax from newly established industrial undertaking

[Section – 46B]
XX Automobile manufacturing industry, bi-cycle manufacturing industry,

industry engaged in production of brick using automatic Tunnel Kiln
technology and tyre manufacturing industry have been included within
the scope of industrial undertaking eligible for enjoying tax holiday.
XX A provision has been added stating that employing any non-Bangladeshi
citizen / expatriate without prior approval of Board of Investment or any
competent authority will lead to withdrawal of tax exemption facility.
1.15 Exemption of income of co-operative societies [Section – 47]
The following income of a co-operative society have been scoped out from
the benefit of tax exemption –
XX Income of dealings with members involving sale of goods, lending of

money or lease of buildings and land which is for personal use of such
members, or where such member is a firm or association of persons,
for the personal use of the partners or members
XX Income from interest and dividends derived from its investments with
any other co-operative society
1.16 Deduction at source from salaries [Section – 50]
A provision has been added specifically scoping in the salary of Government officials
within the applicability of deduction of tax at source. Tax at source on salary drawn
from Government has been imposed at the average rate applicable to the estimated
total income of the official. The Government Accounts Office shall issue a tax
deduction certificate in this regard within 31 July of following financial year.
1.17 Deduction at source from interest on securities [Section – 51]
Treasury bond and treasury bill issued by Government has been scoped out
from the requirement of tax deduction at source.
1.18 Deduction from the payment of certain services [Section – 52AA]
Section – 52AA has been replaced with a more elaboration of the deduction
rate for certain services, as given below –

Sl. Description of payment Rate of
deduction
1 Catering service 10%
2 Cleaning service
a) commission 10%
b) gross receipt 1.5%
3 Collection and recovery agency
a) commission 10%
4 Contract or toll manufacturing 10%
5 Credit rating agency 10%
6 Event management
a) commission 10%
7 Indenting commission 7.5%
8 Meeting or training fees or honorarium 10%
9 Mobile network operator, technical support service 10%
provider or service delivery agents engaged in
mobile banking operations
10 Motor garage or workshop 5%
11 Printing service 3%
12 Private container port or dockyard service 5%
13 Private security service provider
a) commission 10%
14 Product processing charge 10%
15 Shipping agency commission 5%
16 Stevedoring / berth operation commission 10%
17 Supply of manpower
a) commission 10%
18 Transport provider 3%
19 Any other service which is not mentioned in Chapter 10%
VII and is not a service provided by any bank,
insurance or financial institutions
1.19 Collection of tax from cigarette manufacturers [Section - 52B]
Any person responsible for collecting VAT from cigarette manufacturers has
been made responsible to collect tax 3% of Maximum Retail Price (MRP) while
collecting VAT.

1.20 Deduction at source from interest on savings instrument [Section – 52D]
Interest or profit arising from wage earners development bond, US Dollar

premium bond, US Dollar investment bond, Euro premium bond, Euro
investment bond, Pound sterling investment bond and Pound sterling premium
bond has been relieved from deduction of tax at source.
1.21 Collection of tax from travel agent [Section – 52JJ]
A new section has been inserted imposing 0.30% tax to be deducted at source
by respective airlines from total value of tickets (exclusive of charges/taxes)
of an airlines or any charge for carrying cargo to be paid to any travel agent.
1.22 Collection of tax from manufacturer of soft drink [Section – 52S]
The rate of tax to be deducted at source has been changed to 4% from 3%.
1.23 Deduction of tax from commission or remuneration paid to agent of foreign

buyer [Section – 53EE]
The rate of tax to be deducted at source has been changed to 10% from 7.5%.
1.24 Deduction at source from interest on saving deposits and fixed deposits,
etc. [Section – 53F]
10% tax to be deducted at source has been imposed on interest or share of

profit to be received by a public university, an educational institution (subject
to certain conditions) and professional institutes such as ICAB, ICMAB and
ICSB.
1.25 Deduction of tax from advertising bill of newspaper or magazine or private

television channel or private radio station etc. [Section – 53K]
The rate of tax to be deducted at source has been changed to 4% from 3%.
1.26 Deduction of tax from any sum paid by real estate developer to land owner
[Section – 53P]
A new section has been inserted imposing 15% tax to be deducted at source
on any amount paid in the name of signing money, subsistence money, house
rent etc. to land owner by any real estate or land development business.
1.27 Deduction of tax from dividend [Section - 54]
Section - 54 has been replaced and tax to be deducted at source on dividend

has been imposed as follows -

XX If the shareholder is a company, at the rate applicable to a company
XX If the shareholder is a person other than a company, 10% if TIN is

furnished and 15% if TIN is not furnished
1.28 Deduction from income of non-residents [Section - 56]
Section – 56 has been replaced with a more elaboration of the deduction rate
for certain income of non-residents, as given below –
Sl. Description of payment Rate of deduction

1 Accounting or tax consultancy 20%
2 Advertisement making 15%
3 Advertisement broadcasting 20%
4 Advisory or consultancy service 30%
5 Air transport or water transport 7.5%
6 Architecture, interior design or landscape design 20%
7 Artist, singer or player 30%
8 Capital gain received -
a) from capital assets (not being securities listed 15%
with stock exchange)
b) by a company or firm if such gain arises from 10%
securities listed with any stock exchange in
Bangladesh which is not exempted from tax in
the country of such non-resident
9 Certification 30%
10 Charge or rent for satellite, airtime or frequency 20%
11 Contractor, sub-contractor or supplier 5%
12 Courier service 15%
13 Dividend
a) company 20%
b) any other person, not being a company 30%
14 Insurance premium 10%
15 Interest, royalty or commission 20%
16 Legal service 20%
17 Machinery rent 15%
18 Management or event management 20%
19 Pre-shipment inspection service 30%
20 Professional service 20%
21 Salary or remuneration 30%
22 Exploration or drilling in petroleum operation 5.25%

Sl. Description of payment Rate of deduction
23 Survey for oil and gas exploration 5.25%
24 Any service for making connectivity between oil or 5.25%
gas field and its export point
25 Any other payments 30%
1.29 Return of income [Section – 75]
Change in Section – 75 had been made allowing the DCT the power to
extend the date for submission of return up to 2 months (previously it was
3 months) from the specified date. He may further extend the date up to 2
months (previously it was 3 months) with the approval of the Inspecting Joint
Commissioner.
1.30 Universal self-assessment [Section – 82BB]
Sub section – 82BB(1) has been replaced, The replacement states that –
XX Where an assessee furnishes a return of income (manually or

electronically) fulfilling certain conditions, and pays tax on the
basis of such return, the DCT or other authorized official shall issue
an acknowledgement. Such acknowledgement will be deemed as
assessment order.
XX After processing the return, the DCT shall send the assessee a demand
notice along with an intimation specifying computed income, tax
liability, tax credit allowed, net tax payable or refundable and other
particulars, within 30 days of computation. Provided that no such
intimation shall be sent after 12 months from the end of the financial
year in which the return is furnished.
No demand notice requiring the assessee to pay more tax will be made unless
he/she has been given an opportunity of being heard.
1.31 Tax deducted or collected at source from the following items has been included
in this section to be treated as final discharge of tax liability – [Section – 82C]
XX Collection of tax from selling banderols to any manufacturer of

cigarette at the rate of 10% under section 52B [Section - 82C(2)(d)]
XX Deduction of tax from interest on savings instruments at the rate of 5%
under Section – 52D [Section - 82C(2)(eee)]
XX Collection of tax from travel agent at the rate of 0.3% under Section -
52JJ [Section - 82C(2)(eeee)]

XX Collection of tax from export of any goods except certain items at the
rate of 0.60% under Section - 53BBBB [Section - 82C(2)(kk)]
XX Deduction of tax from commission or remuneration paid to an agent
of a foreign buyer at the rate of 10% under Section - 53EE [Section -
82C(2)(mmm)]
XX Deduction of tax at the rate of 10% on interest or share of profit
received by a public university, an educational institution (subject to
certain conditions) and professional institutes such as ICAB, ICMAB and
ICSB under Section – 53F(1)(c) [Section - 82C(2)(mmmm)]
Deduction of tax from gains of securities traded in the stock exchange under
Section - 53O has been withdrawn as final discharge of tax liability.
1.32 Report from an accountant to be furnished [Section – 107F]
Section – 107F has been replaced. The replaced section allows the DCT to
require any person entering into international transaction(s) with aggregate
value exceeding BDT 3 crore to furnish a report from a Chartered Accountant
or Cost and Management Accountant by issuing a notice.
1.33 Penalty for failure to submit the staement of international transaction

Section - 107EE [Section - 107HH]
A new section has been inserted imposing penalty (upto 2% of the value of the
international transaction) on a person failing to comply with the provision of
Section - 107EE.
1.34 Penalty for failure to file return, etc. [Section - 124]
A maximum limit has been set on the amount of penalty to be imposed on

individual assessee for failure to file return. The maximum limit has been set
as follows –
XX BDT 5,000 for individual assessee not assessed previously
XX Higher of (a) 50% of the tax liability on the last assessed income or (b)
BDT 1,000 for individual assessee assessed previously
1.35 Penalty for failure to verify the Taxpayer’s Identification Number [Section
- 124AA]
A new section has been inserted imposing penalty on a person failing to

verify the authenticity of twelve-digit Taxpayer’s Identification Number in
accordance with Section – 184A of an amount upto BDT 50,000.

1.36 Penalty for furnishing fake audit report [Section - 129B]
A new section has been inserted imposing penalty on a person furnishing a

false audit report or an audit report not signed by a Chartered Accountant of
an amount of BDT 100,000.
1.37 Appeal against order of Deputy Commissioner of Taxes and Inspecting

Joint Commissioner of Taxes [Section - 153]
Section – 153(e) has been replaced. The replaced clause scoped in the
imposition of penalty on assessee except for a company under Chapter – XIA,
Chapter – XV, Section – 137 of Chapter – XVI to the provisions eligible for
appealing to the Appellate Joint Commissioner under this section.
1.38 Punishment for furnishing fake audit report [Section - 165AA]
A new section has been included imposing punishment on a person furnishing

a false audit report or an audit report not signed by a Chartered Accountant
with imprisonment of 3 months – 3 years or fine upto BDT 100,000 or both.
1.39 Punishment for unauthorized employment [Section - 165C]
A new section has been inserted imposing punishment on a person employing

non Bangladeshi citizen without prior approval of Board of Investment or any
competent authority with imprisonment of 3 months to 3 years or fine upto
BDT 500,000 or both.
1.40 Requirement of certificate or acknowledgement receipt containing TIN

[Section - 184A]
A provision has been added making submission of twelve digit TIN a requirement
for parents applying for admission of their children at any English medium
school following international curriculum and situated in any city corporation
or paurashabha of a district headquarter.
The following cases have been relieved from the requirement of submission
of twelve digit TIN –
XX For obtaining ISD connection to any kind of telephone

XX For non-resident foreigner while becoming a director or sponsor
shareholder of a company
1.41 Third Schedule
XX A new provision has been included allowing imported computer

software a normal depreciation allowance of 10%.
XX For the purpose of calculation of written down value, the limit of
allowable acquisition cost of motor vehicles used for business or
profession has been increased to BDT 25 lakh from BDT 20 lakh.
1.42 Sixth Schedule - Part A: Exclusions from total income
The changes in Sixth Schedule, Part – A have been summarized below:
XX The exemption limit of income from dividend received from a listed

company has been increased to BDT 25,000 from BDT 20,000 [Para –
11A]
XX Para – 20 has been replaced imposing a limit of BDT 2 crore 50 lakh on
income received as gratuity being eligible for exemption. Earlier any
amount received as gratuity was exempted from tax [Para – 20]
XX Para – 21(d) has been replaced making only workers as defined in
Section - 2(65) of Bangladesh Labor Act, 2006 eligible for exemption
for any payment received from workers participation fund [Para –
21(d)]
XX A new provision has been inserted making any income received 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 exempted
from tax [Para – 24A]
XX The exemption period for any income derived from the business of
software development, Nationwide Telecommunication Transmission
Network (NTTN) or Information Technology Enabled Services (ITES) has
been extended till 30 June, 2024 [Para – 33]
XX The exemption period for any income derived from export of
handicrafts has been extended till 30 June, 2019 [Para – 35]
XX A new provision has been included making any income (except for
interest or dividend income) classifiable under the head income from
other sources which is received by any education institution exempted
from tax provided that such institution –
-- is enlisted for Monthly Pay Order (MPO) of the Government
-- follows the curriculum approved by the Government
-- is governed by a body formed as per Government rules or
regulations [Para – 52]
XX A new provision has been included making any income (except for
interest or dividend income) classifiable under the head income from

other sources which is received by any public university, ICAB, ICMAB
and ICSB exempted from tax [Para – 53]
CHANGES REGARDING INCOME TAX RULES, 1984
[SRO 192-AIN/TAX/2015 DATED 30 JUNE 2015]
1.43 Deduction of tax from payment to contractors etc. [Rule – 16]
A new provision has been included imposing tax to be deducted at source at

3% on gas bill of a company engaged in gas distribution.
1.44 Collection of tax from importers [Rule - 17A]
This rule has been replaced. As per the replaced rule tax shall be collected
on imported goods by the Commissioner of Customs or any appropriate officer
under Section – 53 at the following rates -
XX 5% on the value of the imported goods excluding the goods mentioned in

Rule – 17 (b) & (c)
XX 2% on the value of the imported goods specified in Rule – 17 (b)
XX BDT 800 per ton in case of imported goods specified in Rule – 17 (c)
1.45 Issuance of certificate to the person from whom tax has been deducted
[Rule – 18]
Certificate on deduction of tax needs to be issued within 2 weeks of the

following month in which deduction was made. Previouosly it was within 15
days from deduction.
1.46 Certificate of deduction of tax from Goverment under section-50(1B) [Rule-

18A]
A new rule has been inserted providing the form of annual certificate regarding
deduction of tax from the Goverment Officials under Section – 50(1B) to be
issued.
1.47 Return of withholding tax [Rule - 24A]
This rule has been replaced. The format of return of withholding tax to be
filed by a company under Section - 75A has been modified accommodating the
new and changed areas of tax deducted at source.
1.48 House rent allowance receivable in cash [Rule - 33A]
The exemption limit for house rent allowance receivable by an employee

in cash has been increased to BDT 25,000 per month from BDT 20,000 per
month. So now the allowed exemption limit is lower of (a) BDT 25,000 per
month or (b) 50% of basic salary.
1.49 Conveyance provided for personal or private use [Rule - 33D]
A new condition has been included regarding conveyance provided to an

employee partly or exclusively for personal or private use. In such cases,
higher of (a) BDT 60,000 per annum or (b) 5% of basic salary shall be added to
his/her income.
1.50 Medical expenses [Rule - 33I]
The exemption limit of medical expense or allowance has been increased

to BDT 120,000 per annum from BDT 60,000 per annum. So now the allowed
exemption limit is lower of (a) BDT 120,000 per annum or (b) 10% of basic
salary.
1.51 Recognition of association of accountants, registration of income tax

practitioners etc. by the Board [Rule – 37]
Rule – 37(1) has been replaced. The replaced clause has specified only the
following bodies to be recognized by the Board as association of accountants
for the purpose of Section - 174(2)(e) –
XX Institute of Chartered Accountants of Bangladesh
XX Institute of Cost and Management Accountants of Bangladesh
As a result the following institutions have been excluded from association of

accountants –
XX Institute of Chartered Accountants in England and Wales
XX Institute of Chartered Accountants in Scotland
XX The Society of Incorporated Accountants and Auditors, London
XX Institute of Chartered Accountants of Pakistan and India
XX Institute of Cost and Management Accountants of Pakistan
1.52 Form of certificate under Section – 53AA [Rule - 62A]
A new rule has been inserted providing the form of certificate to be issued by
the Deputy Commissioner of Taxes regarding collection of tax from shipping

business of a resident under Section – 53AA.
1.53 Report from a certified accountant to be furnished under Section - 107F

[Rule – 74]
This rule has been deleted
1.54 Form of report to be furnished under Section - 107F [Rule – 75]
This rule has been replaced. The replaced rule has modified the form of
report from a Certified Accountant to be furnished under Section - 107F.
CHANGES INTRODUCED BY SRO
1.55 Extension of time period for reduced rate of tax for textile industry [SRO
– 193 - AIN/IT/2015]
The time period for which a company engaged in textile industry (yarn
manufacturing, yarn dying, finishing, coning, fabric manufacturing, fabric
dying, finishing, printing etc.) enjoys reduced rate of tax at 15% has been
extended till 30 June, 2019.
1.56 Extension of time period for reduced rate of tax for jute industry [SRO –
194 - AIN/IT/2015]
The time period for which a jute goods manufacturing industry enjoys reduced
rate of tax at 15% has been extended till 30 June, 2019.
1.57 Tax holiday for Securities and Exchange Commission [SRO – 195 - AIN/
IT/2015]
Tax holiday has been offered to Bangladesh Securities Exchange Commission

for a period of 5 years at the following rates -
Tax Exemption Period Tax Exemption Rate

1st Year 100%
2nd Year 80%
3rd Year 60%
4th Year 40%
5th Year 20%
1.58 Tax on salary of Government officials [SRO – 198 - AIN/IT/2015]
Basic salary, festival bonus and bonus of Government officials has been

brought within the scope of tax. Any other allowances and benefits received
by such officials would remain tax exempted.
1.59 Reduction of tax rate on income from certain areas [SRO – 199 - AIN/
IT/2015]
Reduced rate of tax has been offered for income from production of pelleted
poultry feed, production of pelleted feed for fish, shrimp and cattle,
production of seeds, marketing of locally produced seeds, cattle farming,
dairy farming, frog farming, horticulture, silk tree plantation, bee keeping,
silk worm farming, mushroom farming, floriculture, as stated below –
Income Tax rate

On first BDT 10 lakh 3%
On next BDT 20 lakh 10%
On the balance amount 15%
These reduced rates will be applicable from 1 July 2015.
1.60 Reduction of tax rate on income from poultry [SRO – 254 - AIN/IT/2015]
Reduced rate of tax has been offered for income from poultry as stated below –
Income Tax rate

On first BDT 20 lakh nil
1.61 Reduction of tax rate on income from hatchery – [SRO – 255 - AIN/IT/2015]
Reduced rate of tax has been offered for income from hatchery as stated
below
Income Tax rate

On first BDT 10 lakh nil

2. Major changes in Value Added Tax (VAT)
2.1 Restriction on the participation in tender without having registration
[Section - 19A]
Persons not having turnover tax enlistment have been scoped in this section.
As a result any person not having either VAT registration or turnover tax
enlistment would not be able to participate in any tender. Moreover no work
order shall be passed in favor of such person.
2.2 Empowerment of Assistant Director [Section – 24, 26, 27, 48]
Assistant Director has been empowered, equally as Assistant Commissioner,
for the following purposes –
XX To ask for supply of information from the persons mentioned in Section
- 24(1) [Section – 24]
XX Right to enter place and premises of production, rendering of service
and trading; right to inspect stock of goods, services and input; right
to examine accounts and records [Section – 26]
XX Power to seizure of confiscable goods [Section – 27]
XX Power to search [Section – 48]
2.3 Offences and penalties [Section - 37]
Penalty has been imposed on any registered person receiving any goods or
services without VAT Challan.
The time limit for a person to include purchase information in the purchased
register has been extended from 24 hours to 48 hours. Exceeding this time
limit would subject the person to penalty.
2.4 Deduction of VAT at source by service receiver [Rule – 18A]
In addition to the existing deducting authorities, any enterprise having annual
turnover of more than BDT 1 crore has been made responsible as a deducting
authority of VAT at source.
2.5 Imposition of VAT
VAT has been imposed on the following cases-
XX VAT at 7.5% has been introduced on service revenue of private university
and medical and engineering college [SRO No – 221 - Ain/2015/740 -
Mushak dated 01 July, 2015]
XX VAT to be deducted at source from procurement provider has been changed
from 4% to 5% [General order no. - 12/Mushok/2015, dated 1 July 2015]
2.6 Exemption from VAT
[SRO – 119 – Ain/2015/725 – Mushak] has listed the goods and services which
has been exempted from VAT.

SUMMARY
SUMMARY OF INCOME TAX
OF INCOME TAX

3. Important definitions
Assessee [Section - 2(7)]: Assessee means a person by whom any tax or other sum
of money is payable under ITO, 1984.
Person [Section - 2(46)]: Person includes an individual, a firm, an association of
persons (AOP), a Hindu undivided family (HUF), a local authority, a company and
every other artificial juridical person.
Income [Section - 2(34)]: Income means any income, profits or gains derived from
whatsoever source; any loss of such income, profits or gains; deemed income; income
accruing or arising or received or deemed to accrue or arise or to be received under
any provision of ITO, 1984.
Income Year [Section - 2(35)]: Income year means –
XX For a newly set up business: From the date of setting up the business to
following 30 June
XX For a new source of income: From the date of existence to following 30 June
XX For a discontinued business, dissolute unincorporated body, liquidated
company: From 1 July to the date of such discontinuation or dissolution or
liquidation
XX For an unincorporated body:
-- In case of retirement or death of a Partner, income year would be from 1
July to the date of retirement or death
-- If another Partner retires or dies before 30 June, income year would be
from the date of previous Partner’s retirement or death to the subsequent
Partner’s date of retirement or death.
XX Bank, insurance or financial institution: From 1 January to 31 December
XX Other cases: From 1 July to 30 June
Assessment Year [Section - 2(9)]: Assessment year means the period of twelve
months commencing on the 1 July every year. This is the financial year immediately
following the income year.
From 1 July, 2016 the income year for all assessees (except for bank, insurance and
financial institutions) would be 1 July to 30 June and the assessment year would be
following July – June. From 1 July, 2016 the income year for all banks, insurance and
financial institutions would be 1 January to 31 December and the assessment year
would be following July – June.
Tax [Section - 2(62)]: Tax means the income tax payable under the ITO, 1984 and
includes any additional tax, excess profit tax, penalty, interest, fee or other charge
leviable or payable under the Ordinance.

Income
4. Residential status
[Section – 2(55)]
Individual – An individual will be a resident in any income year if he fulfills any of the
following two conditions
XX If he stays in Bangladesh for a period of, or for a period amounting in all to, one
hundred and eighty two (182) days or more in that year or
XX For a period of, or periods amounting in all to, ninety (90) 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(365) days or more during four years preceding
that year.
Hindu Undivided Family, Firm, Other Association of Persons – Such persons will
be resident if its control and management of affairs is situated wholly or partly in
Bangladesh in the income year.
Company - A company will be resident if the management of its affairs is situated
wholly in Bangladesh in the income year.
5. Scope of the total income

[Section – 17]
The calculation of total income of a person for an income year depends on the
residential status.

Resident assessee Non-resident assessee
Total income = Global income Total income = Bangladeshi income
(income received, (income received,
accrued, arising or deemed to be received, accrued, arising or deemed to be
accrued, arising in received, accrued, arising in
Bangladesh + income accrued or arising Bangladesh)
outside Bangladesh)

6. Heads of income
[Section – 20]
For the purpose of computation of total income and charge of income tax, all incomes
shall be classified and computed under the following heads of income –
a) Salaries
b) Interest on securities
c) Income from house property
d) Agricultural income
e) Income from business or profession
f) Capital gains
g) Income from other sources
7. Income from salary

[Section – 2(45), 2(58), 21; Rule – 33A to 33J; Sixth Schedule – Part - A]
Salary includes the following as per section - 2(58) and 21
Basic Salary Contribution to PF

Festival Bonus Pension Fund
Incentive Bonus, allowable upto 10% of Gratuity Fund
disclosed net profit [Section-30(j)]
Arrear Salary Superannuation Fund
Advance Salary Project pay
Leave Encashment Compensation pay

Leave Fare Assistance Wages or any other payment
Overtime

Perquisites include the following as per section - 2(45), 30(e) and Rule - 33A-33J:
Any benefits other than the items included under salary shall be considered as
perquisites. Examples of perquisites are:
XX Dearness allowance

XX House Rent allowed up to BDT 300,000
XX Conveyance allowance allowed up to BDT 30,000
XX Medical allowance allowed up to BDT 120,000 or 10% of basic salary whichever is less
XX Any other allowance
Maximum perquisites allowed for a person is BDT 450,000. Excess of perquisites

(over BDT 450,000) will be taxed as per the respective organization’s tax rate.
Based on various provisions of Income Tax Ordinance, 1984 and Rule – 33A to Rule – 33J
of Income Tax Rules, 1984 the following elements will be included while computing
income from salary –
XX Basic salary
XX Dearness allowance
XX Overtime
XX Bonus
XX House rent allowance receivable in cash: amount in excess of 50% of basic salary
or BDT 25,000 per month whichever is less [Rule – 33A]
XX Rent free accommodation: rental value of accommodation or 25% of basic salary,
whichever is less [Rule – 33B]
XX Accommodation at a concessional rate: rental value of accommodation or 25% of
basic salary - rent actually paid [Rule – 33B]
XX Conveyance allowance receivable in cash with no conveyance facility: amount in
excess of BDT 30,000 [Rule – 33C]
XX Conveyance provided for personal or private use: 5% of basic salary or BDT
60,000, whichever is higher [Rule – 33D]
XX Additional conveyance allowance along with conveyance facility: 5% of basic
salary or BDT 60,000, whichever is higher + conveyance allowance received [Rule
– 33E]
XX Free or concessional passage for travel abroad or within Bangladesh: [Rule – 33G]
-- If provided in accordance with terms of employment: amount in excess of
actual expenditure
-- If not provided in accordance with terms of employment: entire amount
-- If travel abroad is availed more than once in two years: the entire amount
XX Entertainment allowance: entire amount (nothing to be added for free tea,
coffee, beverages) [Rule – 33H]
XX Medical allowance: amount in excess of 10% of basic salary or BDT 120,000
annually, whichever is less [Rule – 33I]

XX Other benefits (such as servant allowance, children education allowance, utility
bills): entire amount
XX Fees and commission
XX Accrued salary
XX Advance salary
XX Leave encashment
XX Profit in lieu of salary
-- Compensation for termination or modification of terms of employment
-- Employer’s contribution to recognized provident fund
-- Interest on recognized provident fund: amount in excess of 1/3 of basic salary

or at 14.5% rate whichever is lower (6th Schedule, Part – A, Para – 25)
-- Unrecognized provident fund: accumulated employer’s contribution + interest

(at the time of retirement)
XX Gratuity: amount in excess of BDT 2 crore 50 lakh (6th Schedule, Part – A, Para – 20)
8. Interest on securities
[Section – 22, 23]
The following income are classifiable under the head interest on securities –
XX Interest receivable on any Government security or any Government approved

security
XX Interest receivable on debenture or other securities of money issued by or on
behalf of a local authority or company
The following deductions are permissible in determination of income from interest
on securities –
XX Commission or charges deducted from interest by a bank realizing the interest

on behalf of the assessee
XX Interest payable on money borrowed for the purpose of investment in the
securities
XX Provided that allowance or deduction on account of interest or commission
in respect of or allocable to the tax-free Government securities shall not be
allowed. Deduction will also not be allowed in respect of interest payable
outside Bangladesh on which tax at source has not been paid or deducted.

9. Income from house property
[Section – 2(3), 24, 25; Rule – 8A]
House property consists of building, appurtenant land, furniture, fixture, fittings etc.
Income from house property whether used for commercial or residential purposes is
taxable on the basis of its annual value.
Definition of Annual Value [Section – 2(3)]: Annual value refers to the higher of (a)
the sum reasonably expected from letting out any house property from year to year
or (b) any sum received as annual rent from such house property.
The following deductions are permissible in determination of income from house

property -
XX Land development tax or rent payable to Government

XX Insurance premium paid
XX Interest payable on mortgage or capital charge
XX Annual charge except capital charge
XX Ground rent
XX Interest payable to bank or financial institution on borrowed capital for
acquisition, construction, reconstruction, repair or renovation of the house
property
XX Interest payable to bank or financial institution on borrowed capital for
construction of the house property, charged in 3 equal installments in the first 3
years of earning income from such property
XX Maintenance allowance
-- House property used for residential purpose: 25% of annual value
-- House property used for commercial purpose: 30% of annual value
(However any unspent portion of an amount of deduction allowed to an assessee
for repair and maintenance of house property would be treated as deemed
income under income from house property)
XX Proportionate vacancy allowance
Any person receiving any sum or aggregate of sums exceeding BDT 25,000 per month
as rent of any house property is required to maintain a bank account in any scheduled
bank for the purpose of depositing such rent or any advance received or receivable
from such house property. He/she shall also maintain a separate register and record
regarding particulars of the tenant or tenants and the sum or sums received.

10. Agricultural income
[Section – 2(1), 26, 27]
Definition of Agricultural Income [Section – 2(1)]: Agricultural income means -
XX ny income derived from any land in Bangladesh and used for agricultural
A
purpose:
-- By means of agriculture
-- By performance of any process ordinarily employed by a cultivator to render
the produce of such land as marketable
-- By sale of the produce of the land raised by the cultivator, in respect of
which no process (other than ones to render the produce of such land as
marketable) has been performed
-- By granting a right to any person to use the land for any period
XX Any income derived from any building which:
-- Is occupied by the cultivator of any such land as referred above in which any
process to render any such produce as marketable is carried on
-- Is on or in the immediate vicinity of such land
-- Is required by the cultivator as the dwelling house or store-house or other
out-house by reason of his connection with such land
The following income of an assessee is assessable under the head agricultural income –
XX Agricultural income as defined in Section – 2(1)
XX Income from sale of machinery or plant used for agricultural purpose as referred
to in Section - 19(17) [Sale proceed - (orginal cost - written down value)]
XX Receipt of insurance, salvage or compensation money for machinery or plant used
for agricultural purpose as referred to in Section - 19(19) [Insurance / salvage
/ compensation received – ((Original cost – Written down value) – Scrap value]
XX 60% of income derived from sale of tea grown and manufactured in prescribed
manner [Rule – 31]
XX Income from sale of rubber, tobacco, sugar or any other produce grown and
manufactured in prescribed manner [Rule – 32]
However, agricultural income upto BDT 200,000 of an assessee (having agriculture as
only source of income) is exempted from tax.
The following deductions are permissible in determination of agricultural income –
XX Land development tax or rent paid

XX Tax, local rate or cess paid on the land used for agricultural purposes

XX Expenditure incurred as cost of production in prescribed manner
-- If books of accounts are maintained, actual expenditure
-- If books of accounts are not maintained, 60% of the market value of the
produce of the land
-- Adhi, barga, bhag, no deduction is allowed
XX Insurance premium paid
XX Repair and maintenance cost of capital assets
XX Depreciation allowance on capital assets as per Third Schedule
XX Interest paid on mortgage and capital charge
XX Interest on borrowed capital
XX Amount written off in books of accounts in respect of discarded, demolished or
destroyed machinery or plant, subject to certain conditions
XX Amount written off in books of accounts in respect of sale or transfer of machinery
or plant, subject to certain conditions
XX Any other expenditure except for capital or personal expenditure, incurred
wholly and exclusively for agricultural purpose
11. Income from business or profession

[Section – 28, 29, 30; Third Schedule]
The following income of an assessee is assessable under the head income from
business or profession –
XX Profits and gains of any business or profession

XX Income from any trade or professional association or similar association
XX Value of any benefit or perquisite arising from business or profession
XX Receipt of any loss, bad debt, expenditure or trading liability as referred to in
Section - 19(15)
XX Income from sale of building, machinery or plant used for business and profession
as referred to in Section - 19(16) [Sale value – (Original cost – Written Down
Value)]
XX Receipt of insurance, salvage or compensation money for building, machinery or
plant used for business and profession as referred to in Section - 19(18) [Insurance
/ salvage / compensation received – ((Original cost – Written down value) – Scrap
value]
XX Income from sale of capital asset for scientific research as referred to in Section
- 19(20) (Sale value – Expenditure allowed as deduction under Section – 29(xx))
XX Proportionate export value of exportable garments against transfer of export

quota as referred to in Section - 19(23) [Rule – 30A]
11.1 Admissible deductions
The following deductions are permissible as per Section – 29 in determination of

income from business or profession-
XX Rent for the premises of business or profession [Para - 1(i)]

XX Repair expense for hired premises of business or profession [Para - 1(ii)]
XX Interest paid or profit shared with a bank run on Islamic principles in respect of
capital borrowed [Para - 1(iii)]
XX Distribution of profit received from a bank run on Islamic principles [Para - 1(iv)]
XX Upto 5% of the total income carried to Special Reserve by financial institutions as
approved by the Government, provided that such reserve does not exceed paid
up capital [Para - 1(v)]
XX Repair expense for buildings, machinery, plants or furniture [Para - 1(vi)]
XX Insurance premium [Para - 1(vii)]
XX Depreciation of building, machinery, plant or furniture as per Third Schedule
[Para - 1(viii)]
XX Amortization of license fee as per Third Schedule [Para - 1(viiia)]
XX Investment allowance of 20% of original cost for the first year, for passenger
vessel or fishing trawler entitled to special depreciation allowance [Para - 1(ix);
Third Schedule, Para - 8]
XX Obsolescence allowance for building, machinery, plant or any other fixed asset
except imported software [Para - 1(xi); Third Schedule, Para – 10]
XX Difference between sale / disposition value of carcass of dead or useless animal
and original cost of the animal which is used in business or profession [Para -
1(xii)]
XX Land development tax or rent, local rates or municipal taxes for premises [Para
- 1(xiii)]
XX Employee bonus or commission, subject to certain conditions [Para - 1(xiv)]
XX A written off irrecoverable debt, subject to certain conditions [Para - 1(xv)]
XX A prior written off irrecoverable debt previously not allowed as deduction, if
established to have become irrecoverable [Para - 1(xvi)]
XX A written off irrecoverable debt in the assessable income year which is established
by the DCT to have become irrecoverable in a prior year, allowed as deduction
for the relevant prior year by the DCT [Para - 1(xvii)]
XX Expenditure for scientific research except for capital expenditure [Para - 1(xix)]
XX Capital expenditure for scientific research, subject to certain condition [Para -
1(xx)]

XX Any sum paid to a scientific research institute, association or other body;
university, college, technical school or other institution, subject to certain
condition [Para - 1(xxi)]
XX Expenditure for educational institution or hospital established for the benefit
of the employees, except for capital expenditure, subject to certain conditions
[Para - 1(xxii)]
XX Capital expenditure for construction and maintenance of educational institution
or hospital established for the benefit of the employees, subject to certain
conditions [Para - 1(xxiii)]
XX Training expenditure on Bangladeshi Citizens for Board approved schemes [Para
- 1(xxiv)]
XX Expenditure except for capital or personal expenditure, incurred as a member of
Government sponsored trade delegation for visits abroad [Para - 1(xxv)]
XX Annual membership subscription fee paid to a registered trade organization or
professional institution [Para - 1(xxvi)]
XX Expenditure except for capital or personal expenditure, incurred wholly and
exclusively for the purpose of business and profession [Para - 1(xxvii)]
XX Expenditure up to BDT 450,000 on the provision of perquisites for any employee.
Perquisite includes dearness allowance, house rent allowance receivable in cash,
rent free accommodation, conveyance allowance receivable in cash, conveyance
provided for personal or private use, additional conveyance allowance, free
concessional passage for travel abroad or within Bangladesh, entertainment
allowance, medical allowance and other benefits [Section – 30(e)]
XX Entertainment expense allowance [Rule - 65]
Income, profits and gains Rate for allowance
On the first BDT 10 lakh 4%
On the balance 2%
XX Foreign travel expenditure of employees and their dependents for holidaying

and recreation equivalent to lower of 3 months’ basic salary or ¾ of actual
expenditure, subject to certain conditions [Rule – 65A]
XX Publicity and advertisement expenditure

XX Allowance for expenditure on distribution of free samples [Rule – 65C]
Rate for
Industry Turnover
allowance
All except Upto BDT 5 crore 1.5%
pharmaceuticals In excess of BDT 5 crore upto BDT 10 crore 0.75%
industry In excess of BDT 10 crore 0.375%

Rate for
Industry Turnover
allowance
Pharmaceuticals Upto BDT 5 crore 2%
industry In excess of BDT 5 crore upto BDT 10 crore 1%
In excess of BDT 10 crore .50%
XX Head office expense of a company not incorporated in Bangladesh under

Companies Act, 1994 up to 10% of net profit disclosed in the statements of
accounts
XX Royalty, technical services fee, technical know-how fee, technical assistance fee
upto 8% of net profit disclosed in the statements of accounts
XX Incentive bonus upto 10% of net profit disclosed in the statements of accounts
XX Overseas travelling expenditure upto 1% of disclosed turnover
11.2 Deductions not admissible in certain circumstances
The following expenditures are not admissible as deductions in the determination of

income from business or profession –
XX Payment of salaries without deduction of tax at source in accordance with
Section - 50 [Para - 30(a)]
XX Payment without deduction and deposit of tax at source and VAT [Para - 30(aa)]
XX Payment of interest, salary, commission or remuneration by a firm or an
association of persons to any partner [Para - 30(b)]
XX Brokerage or commission paid to a non-resident without deduction of tax at
source in accordance with Section – 56 [Para - 30(c)]
XX Payment to a provident or other fund without effective arrangement of deduction
of tax at source from any payment from such fund [Para - 30(d)]
XX Perquisite for any employee exceeding BDT 450,000, subject to certain condition
[Para - 30(e)]
XX Expenditure in excess of allowable limit (stated in the section above) in respect
of the following [Para -30(f)]
a. Entertainment
b. Foreign travels of employees and their dependents for holidaying and
recreation
c. Publicity and advertisement
d. Distribution of free samples
XX Head office expense of a company not incorporated in Bangladesh under

Companies Act, 1994 in excess of 10% of net profit disclosed in the statements of

accounts [Para -30(g)]
XX Royalty, technical services fee, technical know-how fee, technical assistance fee
in excess of 8% of net profit disclosed in the statements of accounts [Para -30(h)]
XX Payment of salary or remuneration exceeding BDT 15,000 otherwise than by
crossed cheque or bank transfer [Para -30(i)]
XX Incentive bonus exceeding 10% of net profit disclosed in the statements of
accounts [Para -30(j]
XX Overseas travelling expenditure exceeding 1% of disclosed turnover [Para -30(k)]
XX Payment of commission or discount to shareholder director [Para -30(l)]
XX Payment exceeding BDT 50,000 otherwise than by crossed cheque or bank
transfer, subject to certain conditions [Para -30(m)]
XX Payment of rent otherwise than by crossed cheque or bank transfer [Para -30(n)]
11.3 Normal depreciation allowance

[Third Schedule, Para - 3]
In computing profit or gains from business or profession, an allowance for depreciation

shall be made in respect of any building, machinery, plant, furniture, bridge, road or
flyover used for the purpose of such business or profession.
Normal depreciation
Sl. Class of asset rate of WDV except as
otherwise indicated
1 Buildings (General) 10%
2 Factory buildings 20%
3 Furniture & fittings 10%
4 Office equipment 10%
5 Machinery & plant (General) 20%

6 Ocean going ships (New) 12%
7 Ocean going ships (Second hand), age less than 10 12%
years at the time of purchase
8 Ocean going ships (Second hand), age 10 years or 24%
more at the time of purchase
9 Inland ships including steamers, motor vessels, iron 24%
or steel flats for cargo, wooden cargo boats, motor
launches and speed boats

Normal depreciation
Sl. Class of asset rate of WDV except as
otherwise indicated
10 Batteries, X-Ray and electronic therapeutic 20%
apparatus and accessories thereto
11 Machinery used in the production and exhibition of 20%

cinematographic films
12 Motor vehicles, not plying for hire 20%
13 Motor vehicles, plying for hire 24%

14 Computer & computer equipment 30%
15 Bangladeshi made computer software 50%

16 Imported computer software 10%
17 Professional & reference books 30%

18 Aircraft, aero-engine and aerial photographic 30%
apparatus
19 Moulds used in the manufacture of glass or plastic 30%
goods or concrete pipe
20 Mineral oil concerns, below ground installation 100%
21 Mineral oil concerns, above ground installations 30%
(portable boilers, drilling tools, well-head tanks and
rigs)
22 Bridge 2%
23 Road 2%
24 Fly over 2%
25 Pavement runway, taxiway 2.5%

26 Apron, tarmac 2.5%
27 Boarding bridge 10%
28 Communication, navigation aid and other 5%

equipment

11.4 Initial depreciation
[Third Schedule, Para – 5A]
Applicable for Year of application Rate
Building constructed Later of 10% of cost
in Bangladesh after 30 • Year of construction
June, 2012 • First year of use
• Year of commencement of
commercial production
Machinery or plant Later of 25% of cost
installed in Bangladesh • Year of installation
after 30 June, 2012 • First year of use
• Year of commencement of
commercial production
11.5 Accelerated depreciation allowance

[Third Schedule, Para – 7, 7B]
Applicable for Year of Rate

application
• Machinery or plant used in industrial First year of 50% of actual
undertaking set up in Bangladesh commercial cost
between 1 July, 1977 and 30 June, production
2012
Second year 30% of actual
• Not previously used in Bangladesh of commercial cost
production
• Not applicable for office appliances
and road transport vehicle Third year of 20% of actual
commercial cost
• Subject to certain conditions production
• Machinery or plant used in industrial First year of 50% of actual

undertaking referred to in Section – commercial cost
46B and set up in Bangladesh between production
1 July, 2014 and 30 June, 2019
Second year 30% of actual
• Not previously used in Bangladesh
of commercial cost
• Not applicable for office appliances production
and road transport vehicle
• Subject to certain conditions Third year of 20% of actual
commercial cost
production

11.6 Amortization of license fees
[Third Schedule, Para – 10A]
Period
Applicable for Rate
allowed
• Resident cellular mobile phone operator company For the Proportionate
period of amount in
• Paying Spectrum Assignment fees, GSM license permission each year of
fees, license acquisition fees or license renewal permission
fees as license fees before or after 1 July, 2012
• For obtaining permission from authority for 2 or

more years
12. Capital gains

[Section – 2(15), 31, 32; Second Schedule]
Definition of Capital Asset [Section – 2(15)]: Capital asset of an assessee means any
kind of property held by him/her excluding –
XX Stock-in-trade (except for stocks and shares), consumable stores or raw materials
held for business and profession
XX Movable personal effects including wearing apparel, jewellery, furniture, fixture,
equipment, and vehicles that are used for personal use only
Any profits or gains arising from transfer of a capital asset (both movable and
immovable) as defined in Section - 2(15) of the ITO, 1984 is chargeable to income
tax in accordance with the Second Schedule, Para – 2.
Income from capital gain is taxable on the basis of the full value of consideration
received or accrued from the transfer or fair market value, whichever is higher.
The following deductions are permissible in determination of income from capital gain:
XX Any expenditure incurred solely in connection with the transfer

XX Cost of acquisition and any capital expenditure incurred for improvement of the
capital asset
Capital gains or portion thereof arising out of transfer of certain capital assets are
exempted from the income tax under certain circumstances and upon fulfillment of
certain conditions as discussed below –

Source of capital
Condition Exemption Reference
gain
Transfer of Acquisition of • When capital gain is greater Section –
capital asset a new capital than the cost of new asset, 32(5)
used for business asset within capital gain up to the extent
or profession a year before of cost of acquisition of new
immediately before or after the asset shall be exempted and
the transfer transfer date balance shall be charged
to tax
• When capital gain is equal
or less than the cost of
new asset, no tax shall be
charged on the capital gain
Transfer of None Full Section –
Government 32(7)
securities
Transfer of building Entire Full Section –
or lands to a new capital gain 32(10)
company registered is invested
under Companies Act, in the new
1913 / 1994 set up for company
an industry
Transfer of capital Entire capital Full Section –
asset of a firm to gain is 32(11)
a new company invested in
registered under equity in the
Companies Act, new company
1913/1994
13. income from other sources

[Section – 33, 34]
The following income of an assessee is assessable under the head income from other
sources –
XX Dividend
XX Interest
XX Royalties
XX Fees for technical services
XX Income from letting of machinery, plant or furniture and inseparable building

XX Certain deemed income
XX Income of any kind or from any source which is not classifiable under any other
heads specified in Section-20
The following deductions are permissible in determination of income from other
sources –
XX Interest paid on money borrowed for acquisition of shares
XX Expenditure incurred for earning relevant income, except for capital expenditure
and personal expenditure
XX Expenditure for repair, insurance premium, depreciation and obsolescence
allowance according to Third Schedule in respect of letting of machinery, plant
or furniture and inseparable building
14. Deemed income

[Section – 19]
Certain incidents such as unexplained investment, cash credits, possession of assets,
non-payment of liabilities are treated as deemed income of an assessee which are
assessable under specific income head.
Sl. Deemed income Head of Income Reference

1 Unexplained cash credit in the books of Income from Section - 19(1)
accounts Other Source
2 Under recorded value of investment in or Income from Section - 19(2)
possession of bullion, jewellery and other Other Source
valuable article
3 Unexplained expenditure Income from Section - 19(3)
Other Source
4 Unrecorded investment Income from Section - 19(4)
Other Source
5 Unrecorded money, bullion, jewellery and Income from Section - 19(5)
other valuable article Other Source
6 Income from discontinued business Income from Section - 19(6)
Business or
Profession
7 Dividend received Income from Section - 19(7)
Other Source
8 Fair market value – Purchase price of asset Income from Section - 19(8)
(except stock-in-trade, stock, shares) Other Source
9 Salami or Premia Income from Section - 19(9)
Other Source

10 Goodwill money, compensation or Income from Section - 19(10)
damages for cancellation or termination Other Source
of contracts and licenses
11 Monetary value of benefit for cancellation Income from Section - 19(11)
of indebtedness Other Source
12 Managing Agency Commission Income from Section - 19(12)
Other Source
13 Winnings from lotteries, crossword Income from Section - 19(13)
puzzles, card games and other games Other Source
14 Profits and gains from insurance Business Income from Section - 19(14)
Business or
Profession
15 Amount received in respect of any loss, Income from Section - 19(15)
bad debt, expenditure or trading liability Business or
previously allowed as deduction Profession
16 [Sale proceed – (original cost – written Income from Section - 19(16)
down value)] of building, machinery, plant Business or
used for business or profession Profession
17 [Sale proceed – (original cost – written Agricultural Section - 19(17)
down value)] of machinery and plant used income
for agriculture
18 [Insurance / salvage / compensation Income from Section - 19(18)
received – ((original cost – written down Business or
value) – scrap value) of building, machinery, Profession
plant used for business or profession
19 [Insurance / salvage / compensation Agricultural Section - 19(19)
received – ((original cost – written down income
value) – scrap value) of machinery and
plant used for agriculture
20 [Sale proceed – allowed capital Income from Section - 19(20)
expenditure] of asset used for scientific Business or
research Profession
21 Unpaid loan of maximum BDT 500,000 not Income from Section - 19(21)
paid within 3 years, subject to certain Other Source
conditions
22 Loan or gift received which is transfer of Income from Section - 19(21A)
initial capital of a business or profession, Other Source
subject to certain conditions
23 Initial capital partly or fully transferred Income from Section - 19(21B)
from business or profession, subject to Other Source
certain conditions

24 Amount received from tenant which is not Income Section - 19(22)
adjustable with rent from House
Property
25 Export value of exportable garments Income from Section - 19(23)

against transferred export quota Business or
Profession
26 Paid-up capital received by a non-listed Income from Section - 19(24)

company otherwise than by crossed Other Source
cheque or bank transfer
27 Loan received by a company otherwise Income from Section - 19(26)
than by crossed cheque or bank transfer Other Source
28 50% of [Value of motor car / jeep purchased Income from Section - 19(27)
or hired – 10% of (paid-up capital + reserve + Other Source
accumulated profit)] of a company
29 Loan exceeding BDT 500,000 received by Income from Section - 19(28)

an individual otherwise than by crossed Other Source
cheque or bank transfer
30 Unpaid liability in respect of credit Income from Section - 19(29)

purchase of building construction Other Source
material, subject to certain condition
31 Unspent amount of deduction allowed for Income from Section - 19(30)

repair and maintenance of house property House Property
32 [Income shown in revised return – income Income from Section - 19(31)

shown in original return], subject to Other Source
certain condition

TAX RATE STRUCTURE
15. Personal Tax rate structure

A person defined under Section - 2(46) of ITO, 1984 except company e.g. every
individual assessee (including non-resident Bangladeshi), firm (partnership or single),
association of persons, Hindu undivided family, artificial juridical person and non-
Government Organization (NGO) shall have to pay income tax on their total income
according to 6 tier income slabs and tax rates for the Financial Year 2014 - 2015 and
Assessment Year 2015 -2016. The following table entails the 6 tier income slabs and
tax rates for the current assessment year:
Assessment Year: 2015-2016

(Income Year: 2014-2015)
Income Rate of tax
On the first BDT 250,000 of total income of male assesse Nil

On the first BDT 300,000 of total income of female assesse Nil
On the first BDT 300,000 of total income of persons aged 65 Nil
years & above
On the first BDT 375,000 of total income of physically Nil
challenged assessee
On the first BDT 425,000 of total income for gazetted war Nil
wounded freedom fighters
On the next BDT 400,000 of total income 10%
On the next BDT 3,000,000 of total income 25%
On the balance of total income 30%

15.1. Tax on capital gain
Capital gain Applicable tax
Capital gain arising as result of a Tax at rate applicable on total income

disposal of capital asset within 5 including capital gain
years from the date of acquisition
Capital gain arising as result of a Lower of

disposal of capital asset after 5 years • Tax at rate applicable on total
from the date of acquisition income including capital gain
• 15% tax the capital gain
15.2 Other tax rates
Applicable for Rate of tax

Income from cigarette business by cigarette manufacturer 45%
other than company
Co-operative societies, registered under Co-operative 15%
Societies Act, 2001
15.3 Minimum tax
Minimum tax on individual, Hindu undivided family and other association of persons is
charged on the basis of location. An assessee with taxable income exceeding exemption
limit (male: BDT 250,000; female, persons aged 65 years & above: BDT 300,000;
physically challenged person: BDT 375,000; gazetted war wounded freedom fighters:
BDT 425,000) shall pay minimum tax based on their location as stated below -
Location of assessee Minimum tax

Assessees residing in Dhaka and Chittagong City Corporation BDT 5,000
area
Assessees residing in other City Corporation area BDT 4,000
Assessees residing in other than City Corporation area BDT 3,000
Every firm having more than gross receipts of BDT 50 lakh is liable to pay minimum
tax at 0.30% of gross receipts from all sources for the income year.
15.4 Surcharge on individual assessee
Surcharge will be applicable at the following rates on net tax payable by individual
assesses having net wealth according to the following slabs –

Net Worth Value Rate of Surcharge
Up to BDT 2.25 crore Nil
More than BDT 2.25 crore up to BDT 10 crore 10%
More than BDT 10 crore up to BDT 20 crore 15%
More than BDT 20 crore up to BDT 30 crore 20%
More than BDT 30 crore 25%
However minimum surcharge has been fixed at BDT 3,000.
15.5 Incidence of tax on non-resident assessee
A person who is a non-resident is liable to pay tax on the income, profits and gains
which are received; deemed to have been received; deemed to accrue or arise to
him / her in Bangladesh.
A non-resident Bangladeshi (NRB) is subject to pay tax at 6 tier income and tax rate
as applicable for a resident assessee.
A non-resident Bangladeshi is entitled to tax relief and tax rebate that are admissible
to a resident assessee.
A non-resident foreigner assessee is liable to pay tax on his total income at 30%
[Second Schedule]. The maximum limit of exempted income from tax is not
applicable for such an assessee.
A non-resident foreigner assessee is not entitled to any sort of tax relief and tax
rebate that are admissible to a resident assessee.
16. Corporate tax rate structure

Tax rates applicable for companies are as follows:
Sl. Applicable for Rate of tax

1 Publicly traded company except for banks, insurance company, 25%
other financial institutions, merchant bank, cigarette
manufacturing companies and mobile operator companies
If such company transfers at least 20% share through IPO, it
will enjoy 10% rebate on tax in the respective year
2 Non-publicly traded company 35%
3 Publicly trade bank, insurance company and financial 40%
institution

Sl. Applicable for Rate of tax
4 Non-publicly traded bank, insurance company and financial 42.5%
institution
5 Bank, insurance company and financial institution obtaining 40%
approval from Government in 2013
6 Merchant bank 37.5%
7 Cigarette manufacturing company 45%
8 Mobile phone operator company 45%
9 Mobile phone operator company converted into public 40%
limited company in the following manner -
• Issuing minimum 10% of shares through IPO, of which
maximum 5% issued through Pre-IPO
If such company transfers at least 20% share through IPO, it
will enjoy 10% rebate on tax in the respective year
10 Income from dividend 20%
11 Capital gain arising from transfer of stocks and shares of any 10%
company registered under Companies Act, 1994
12 Capital gain arising from transfer of capital assets other 15%
than tocks and shares of any company registered under
Companies Act, 1994
16.1 Minimum tax
[Section – 16CCC]
Applicable forCondition Rate of tax

Company Irrespective of profit or loss in 0.30% of gross receipts from all
the assessment year sources for the income year
Industrial Irrespective of profit or loss in 0.10% of gross receipts from all
undertaking the assessment year sources for the income year
engaged in For the first 3 income years
manufacturing since commencement of
of goods commercial production
Gross receipts for minimum tax purpose will constitute the following -
XX All receipts derived from sale of goods

XX All fees, charges, commissions, discounts received for rendering services or
giving benefits
XX All receipts derived from any head of income

16.2 Additional tax
[Section – 16B]
Applicable for Condition Rate of tax

Public limited Not declared or distributed at least 15% 5% on
company except dividend or bonus share within six months undistributed
for banking or from the end of the income year profit
insurance company
Company Employs or allows any individual who is not Higher of
a Bangladeshi Citizen / expatriate without • 50% of
prior approval of BOI or any competent income tax
authority of Government payable
• BDT 5 lakh
16.3 Excess profit tax
[Section – 16C]
Applicable for Condition Rate of tax

Banking company operating Shows profit in return exceeding 15% of (shown
under Bank Companies Act, 50% of its capital & reserve (as profit – capital
1991 (BCA, 1991) per BCA, 1991) & reserve)
17. Tax deducted at source

Tax on certain income shall be deducted or collected at source as advance payment
in accordance with Chapter – VII of ITO, 1984. The income subject to such deduction
and respective deduction rates are summarized in the following table. Some
abbreviations are used in the following table such as RZ (Respective zone), Dhk
(Dhaka Zone), Ctg (Chittagong Zone) and LTU (Large Tax-payer Unit).
Applicable
Sl Applicable for Rate of tax Reference
zone
1 Salaries including salaries of Average rate RZ Sec - 50
Government employee applicable to
assessee based on
personal tax rate
structure
2 Discount on real value of Higher of maximum LTU Sec – 50A
Bangladesh Bank bills rate or applicable
rate

Applicable
zone
3 Remuneration to Member of Average rate RZ Sec – 50B
Parliament applicable to
assessee based on
personal tax rate
structure
4 Interest on securities 5% LTU Sec – 51
Subject to certain
conditions
5 Payment to contractors for As specified in Rule Dhk – 2 Sec – 52;
supply of goods, execution - 16 Ctg – 2 Rule - 16
of contracts or sub-contract Other - RZ
6 Fees for service rendered 10% Dhk - 10 Sec -
by doctor at a general or Ctg – 2 52A(1)
specialized hospital or Other - RZ
diagnostic center
7 Royalty or technical know- 10% Dhk - 8 Sec -
how fee Ctg – 2 52A(2)
Other - RZ
8 Fees for professional or Dhk - 8 Sec -
technical services Ctg – 2 52A(3)
If TIN is furnished 10% Other - RZ
If TIN is not furnished 15%
9 Payment for catering service 10% Dhk - 14 Sec - 52AA
10 Payment for cleaning service 10% Ctg – 2
- commission Other - RZ
11 Payment for cleaning service 1.5%
– gross receipt
12 Payment to collection 10%
and recovery agency -
commission
13 Payment to collection and 1.5%
recovery agency – gross
receipt
14 Payment for contract or toll 10%
manufacturing
15 Payment to credit rating 10%
agency
16 Payment for event 10%
management – commission

Applicable
zone
17 Payment for event 1.5%
management – gross receipt
18 Indenting commission 7.5%
19 Meeting or training fees or 10%
honorarium
20 Payment to motor garage or 5%
workshop
21 Payment for printing service 3%
22 Payment for private 5%

container port or dockyard
service
23 Payment to private 10%
security service provider –
commission
24 Payment to private security 1.5%
service provider – gross
receipt
25 Product processing charge 10%
26 Shipping agency commission 5%
27 Stevedoring / berth 10%
operation commission
28 Payment for supply of 10%
manpower – commission
29 Payment for supply of 1.5%
manpower – gross receipt
30 Payment to transport 3%
provider
31 Payment for any other 10%
service which is not
mentioned in Chapter VII
and is not a service provided
by any bank, insurance or
financial institutions
32 Payment to mobile network 10% LTU
operator, technical support
service provider or service
delivery agents engaged in
mobile banking operations

Applicable
zone
33 Clearing & forwarding 10% Dhk - 15 Sec -
agency commission Ctg – 3 52AAA
Other - RZ
34 Manual cigarette 10% Dhk - 10 Sec –
manufacturer Ctg – 4 52B(1)
Other - RZ
35 Cigarette manufacturer 3% of MRP Respective Sec –
Zone 52B(2)
36 Compensation against 2% Dhk - 15 Sec – 52C
acquisition of immovable Ctg – 2
property situated in city Other - RZ
corporation, paurashava or
cantonment board area
37 Compensation against 1% Dhk - 15 Sec – 52C
acquisition of immovable Ctg – 2
property situated outside Other - RZ
city corporation, paurashava
or cantonment board area
38 Interest on saving 5% Dhk - 10 Sec – 52D
instrument Ctg – 4
Subject to certain Other - RZ
conditions
39 Brick manufacturer Dhk - 7 Sec – 52F
One section brick field BDT 45,000 Ctg – 4
One and half section brick BDT 70,000 Other - RZ
field
Two section brick field BDT 90,000
Automatic brick field BDT 150,000
40 Commission of letter of 5% Dhk - LTU Sec – 52I
credit Ctg – 2
41 Travel agent 0.30% of airfare or Dhk - 4 Sec – 52JJ
cargo charge Ctg – 2
42 Renewal of trade license Dhk - 3 Sec – 52K

Ctg – 2
Dhaka City Corporation BDT 500 Other - RZ
or Chittagong City
Corporation
Other City Corporation BDT 300

Applicable
zone
Paurashava at any district BDT 300
headquarter
Other paurashava BDT 100
43 Freight forward agency 15% Dhk - 6 Sec – 52M
commission Ctg – 3
Other - RZ
44 Rental power company 6% Dhk - 13 Sec – 52N
Ctg – 3
Other - RZ
45 Foreign technician serving in 5% Dhk - 9 Sec – 520
a diamond cutting industry
46 Services from convention 5% Dhk - 4 Sec – 52P
hall, conference center, etc. Ctg – 2
Other - RZ
47 Services provided to any 10% Dhk - 11 Sec – 52Q
foreign person by a resident
48 International Gateway (IGW) 1% Dhk – 15 Sec – 52R
service operator
49 Interconnection Exchange 5%
(ICX), Access Network
Services (ANS), any other
person having agreement
with BTRC
50 Manufacturer of soft drink 4% Gazipur Sec – 52S
and mineral or bottled Zone
water
51 Payment in excess of 5% LTU Sec – 52T
premium paid on life
insurance policy
52 Local letter of credit (on 3% Ctg – 2 Sec – 52U

proceeds exceeding BDT Cox’s Bazar
500,000) –2
Subject to certain Other – LTU
conditions Dhk
53 Payment to regulatory 10% LTU Sec – 52V
authority by cellular mobile
phone operator

Applicable
zone
54 Importer 5% Dhk - 14 Sec – 53;
(Rate may vary subject to Ctg – 1 Rule – 17A
certain conditions) Other - RZ
55 Rent payment for house 5% Dhk - 7 Sec – 53A
property Ctg – 2
Other - RZ
56 Shipping business of a Dhk - 10 Sec – 53AA
resident Ctg – 4
Other - RZ
Freight received or receivable 5%
in or out of Bangladesh
Freight received or 3%
receivable from service
rendered between two or
more foreign countries
57 Export of manpower 10% Dhk - 4 Sec – 53B;
Rule – 17C
58 Export of knit wear and 0.6% Dhk - 4 Sec – 53BB;
woven garments, terry SRO – 224 –
towel, carton, garments AIN / 2015
accessories, jute goods,
frozen foods, vegetables,
leather goods, and packed
food
59 Member of Stock Exchanges 0.05% Dhk - 7 Sec –
Ctg – 3 53BBB;
SRO – 334
– AIN / IT /
2011
60 Export of goods except for 0.6% Dhk – 4 Sec –
items specified in Sec – 53BB 53BBBB;
SRO – 224 –
AIN / 2015
61 Goods or property sold by 5% Dhk - 9 Sec – 53C;
public auction 1% for auction of tea Ctg – 4 Rule – 17D
Other - RZ
62 Purchase of film, drama, TV 10% Dhk – 12 Sec –
or radio program 53D(1)

Applicable
zone
63 Performance in film, drama, 10% Dhk – 12 Sec –
advertisement, TV or radio 53D(2)
program
Subject to certain condition
64 Export cash subsidy 3% Dhk – 4 Sec –
53DDD
65 Commission, discount, fees 10% Dhk - 12 Sec –
Ctg – 4 53E(1)
Other - RZ
66 Distributor purchasing goods 3% Dhk - 12 Sec –
at a price lower than fixed Ctg – 4 53E(2)
retail price Other - RZ
Subject to certain condition
67 Commission or remuneration 10% Dhk - 6 Sec – 53EE
paid to agent of foreign Ctg – 3
buyer Other - RZ
68 Interest on savings deposit, Dhk - 1 Sec – 53F
fixed deposit, term deposit
If TIN is furnished 10%
If TIN is not furnished and 10%
deposit amount is up to BDT
100,000
If TIN is not furnished and 15%
deposit amount exceeds BDT
100,000
Public university, 10%
educational institutions,
ICAB, ICMAB and ICSB
69 Real estate or land As specified in Dhk - 5 Sec – 53FF

development business Section – 53FF Ctg – 4
Other - RZ
70 Insurance commission 5% LTU Sec – 53G
71 Fees etc. of surveyor of 15% LTU Sec – 53GG
general insurance company

Applicable
zone
72 Transfer of property As specified in Dhk – Sec – 53H;
Section – 53H and Central Rule – 17II
Rule – 17II survey
zone
Ctg – 4
Other - RZ
73 Lease of property 4% Dhk – Sec – 53HH
Subject to certain Central
conditions survey
zone
Ctg – 4
Other - RZ
74 Interest on deposit of Post 10% Dhk - 9 Sec – 53I
Office Savings Bank Account Ctg – 4
Other - RZ
75 Rental value of vacant land, 5% Dhk - 15 Sec – 53J
plant or machinery Ctg – 4
Other - RZ
76 Advertisement or airtime 4% Dhk - 5 Sec – 53K
bill of newspaper, magazine, Ctg – 3
private TV channel, private Other - RZ
radio station, website
77 Transfer of securities 5% Dhk - 3 Sec – 53M
or mutual fund units by Ctg – 3
sponsor shareholder,
director, placement holder
of listed companies
78 Transfer of share of 15% Dhk - 3 Sec – 53N
shareholder of Stock Ctg – 3
Exchange
79 Signing money, subsistence 15% Dhk - 5 Sec – 53P
money, house rent etc. paid Ctg – 2
to land owner by real estate Other - RZ
developer

Applicable
zone
80 Dividend Dhk - 13 Sec – 54
Company 20% Ctg – 4
Assessee other than 10% Other - RZ
company, if TIN is furnished
Assessee other than 15%
company, if TIN is not
furnished
81 Lottery 20% Dhk - 9 Sec – 55
Ctg – 3
Other - RZ
82 Payment to non–resident 20% Dhk - 11 Sec – 56
for accounting or tax
consultancy
83 Payment to non–resident for 15%
advertisement making
advertisement broadcasting
85 Payment to non–resident 30%
for advisory or consultancy
service
86 Payment to non–resident 7.5%
for air transport or water
transport
architecture, interior design
or landscape design
artist, singer or player
capital gain received from
capital assets (not being
securities listed with stock
exchange)

Applicable
zone
company or firm for
capital gain received
from securities listed with
any stock exchange in
Bangladesh which is not
exempted from tax in the
country of such non-resident
certification
charge or rent for satellite,
airtime or frequency
contractor, sub-contractor
or supplier
courier service
95 Dividend
a) Tax treaty countries:
- If the beneficial owner 10%
is a company and holds
directly at least 10% of the
company’s capital
- For other cases 15%
b) Other than tax treaty
countries:
- For Company 20%
- For all other cases 30%

insurance premium
for interest, royalty or
commission
legal service

Applicable
zone
machinery rent
for management or event
management
for pre-shipment inspection
service
professional service
salary or remuneration
for exploration or drilling in
petroleum operation
for survey for oil and gas
exploration
for any service for making
connectivity between oil or
gas field and its export point
107 Any other payments to non– 30%
resident
108 Motor vehicle presumptive As specified in SRO – Central SRO – 160 –

tax 160 – AIN / 2014 survey AIN / 2014
zone
109 Cargo or launch presumptive As specified in SRO – Dhk - 5 SRO – 162 –

tax 162 – AIN / 2014 Ctg – 3 AIN / 2014
Other - RZ
18. Payment of tax deducted at source

[Rule – 13, 14]
All taxes deducted or collected (except for the following cases) in accordance with
Chapter – VII: Section - 48 to 63 shall be paid to the credit of the Government by
electronic payment or income tax challan within 2 weeks from the end of the month

of deduction or collection and such tax shall be deposited to Bangladesh Bank or
Sonali Bank. The exceptions are the following cases –
XX Supply of goods or execution of contract under Section - 52

XX Fees for professional or technical services under Section – 52A
XX House property under Section – 53A
XX Commission or fees under Section – 53E
Tax deducted or collected in respect of the above mentioned cases, the deducting
authority has to issue a cheque equivalent to the deducted amount in favor of the
concerned DCT and hand it over to the person from whom the tax has been deducted
or collected at source. Such person is responsible to deposit the cheque through
income tax challan to Bangladesh Bank or Sonali Bank.
19. Final settlement of tax liability

[Section – 82C]
Tax deducted or collected at source in accordance with the provisions mentioned

below shall be deemed to be the final discharge of tax liability from that source.
These are as follows:
TDS Section
Sl. Sources of tax deduction or collection
Reference
1 Payment on account of supply of goods or execution of Sec - 52
contract
2 Payment on account of royalty, fees for technical services Sec - 52A(2)
3 Commission from clearing and forwarding agency business Sec - 52AAA
4 Value of banderols computed on account of manufacturer of Sec – 52B
cigarettes
5 Compensation against acquisition of property Sec – 52C
6 Amount received on account of sale of rental power by Sec – 52N
rental power companies
7 Amount received as interest from saving instruments Sec – 52D
8 Amount of tax collected from travel agent Sec – 52JJ
9 Salaries of a foreign technician serving in a diamond cutting Sec – 52O
industry
10 Amount received by International Gateway (IGW) services Sec – 52R
operator or Interconnection Exchange (ICX) in respect of
international phone call

TDS Section
Sl. Sources of tax deduction or collection
Reference
11 Amount computed in respect of goods imported (excluding Sec – 53
goods imported by an industrial undertaking as raw
materials for its own consumption)
12 Amount received or receivable from shipping business of a Sec – 53AA
resident
13 Amount received on account of export of manpower Sec – 53B
14 Amount received on account of export of certain items Sec – 53BB
15 Amount received on account of transaction by a member of Sec – 53BBB
stock exchange
16 The amount received on account of export of any goods Sec – 53BBBB
except certain items
17 Amount of auction purchase Sec – 53C
18 Amount received on account of courier business Sec – 53CC
19 Amount received on account of export cash subsidy Sec – 53DDD
20 Commission, charges paid to agent of foreign buyer Sec – 53EE
21 Interest or share of profit on saving deposit, fixed deposit, Sec – 53F(1)
term deposit of a public university, educational institutions, (c)
ICAB, ICMAB and ICSB
22 Amount received from persons engaged in real estate or Sec – 53FF
land development business
23 Remuneration or reward, whether by way of commission or Sec – 53G
otherwise payable to an insurance agent
24 Payment on account of survey by surveyor of a general Sec – 53GG
insurance company
25 Value of property Sec – 53H
26 Income derived from transfer of securities or mutual fund Sec – 53M
units by sponsor shareholders of a company
27 Income derived from transfer of share of Stock Exchange Sec – 53N
28 Amount on account of winnings from lotteries, crossword Sec – 55
puzzles, card games, gambling, betting
However final discharge of tax liability shall not be applicable for a contractor or
sub-contractor of an oil company, oil marketing companies and its dealer or agent
excluding petrol pump station, any company engaged in oil refinery and any company
engaged in gas transmission or gas distribution.

Income from the sources on which final discharge of tax liability applies shall be
determined on the basis of the tax deducted or collected at source and the rate
or rates of tax applicable for the assessment year. Any income shown or assessed
in excess of the amount determined in this way shall be liable to tax at the rate
applicable for the assessment year. Such income shall not be set off against loss of
earlier year or years.
20. Set-off and carry forward of loss

[Section – 37, 38, 39, 41, 42]
The rules of set-off and carry forward of any loss incurred is summarized below -
Carry forward to
set off against Limitations for
Head of income Set-off
following years’ carry forward
income
Income from salary N/A N/A N/A
Interest on Against income from Cannot be carried N/A
securities any other head forward
Income from house Against income from Cannot be carried N/A
property any other head forward
Agricultural Against income from Set off against Time limit:
income any other head except agricultural 6 successive
for income from capital income years
gain
Amount Limit:
None
Income from Against income from Set off against Time limit:
business or any other head except income from 6 successive
profession for income from same business or years
• House profession
property Amount Limit:
• Capital Gain None
Income from Against any other Set off against Time limit:
speculation income from income from 6 successive
business speculation business speculation years
Cannot be set off business
against any other head Amount Limit:
of income None

Carry forward to
set off against Limitations for
Head of income Set-off
following years’ carry forward
income
Capital gains Against any other Set off against Time limit:
income from capital capital gain 6 successive
gain years
Cannot be set off
against any other head Amount limit:
of income Amount
exceeding BDT
5,000
Income from other Against income from Cannot be carried N/A

sources any other head forward
Income from any Cannot be set off Cannot be carried N/A

source which is against any other head forward
exempted from tax of income
However any loss in respect of any income from any head shall not be set-off against
any income from manufacturing of cigarettes.
21. Carry forward of depreciation allowance

[Section – 42(6)]
Depreciation allowance which cannot be given full effect in any year because of
there being no profits / gains or being inadequate profits / gains, such unadjusted
allowance or part thereof shall be carried forward to the succeeding years and shall
be treated as part of depreciation allowance for those respective years. There is no
time limit or amount limit for such carry forward of depreciation allowance.
However carried forward business loss and loss in speculation business shall be set-
off before carried forward depreciation allowance is given effect in any year.

FILING OF RETURN &
PAYMENT OF TAX
22. Filing of return of income

[Section – 75]
XX Every person whose total income during an income year exceeds the exemption
limit (i.e. the maximum amount which is not chargeable to tax) and every person
(irrespective of his income in the income year) who was assessed to tax for any
of the preceding three years shall furnish a return of his income along with such
other particulars as may be prescribed. Moreover the following persons are also
required to file a return of income –
-- Who resides in a city corporation or paurashava or divisional headquarters or
district headquarters and owns a motor car or is a member of a club registered
under VAT Act 1991
-- Who runs any business or profession having trade license from a city
corporation, a paurashava or a union parishad; and operates a bank account
-- Who is registered with a recognized professional body as a doctor, dentist,
lawyer, income tax practitioner, chartered accountant, cost and management
accountant, engineer, architect, surveyor or any other similar profession
-- Who is a member of a chamber of commerce and industries or a trade
association
-- Who is a candidate for an office of any paurashava, city corporation or a
Member of Parliament
-- Who is a participant in a tender floated by Government, semi-Government,
autonomous body or local authority
-- Who is a non-Government organization registered with NGO Affairs Bureau
XX Every company is required to file a return of income or return of any other person
for whom it is assessable.
XX Every individual is required to furnish the following statements (prepared in
prescribed form and verified in prescribed manner) accompanying the return of
income –
-- Particulars of his lifestyle
-- Particulars of total assets, liabilities and expense in respect of himself, his

spouse, minor children and dependents
-- Particulars of any asset transferred by him to any other person
XX Every company is required to furnish the following documents accompanying the
return of income –
-- Audited statement of accounts
-- A reconciliation between profit or loss shown in the accounts and profit and
loss disclosed in the return of income
XX The last date of filing return for all assessee except for a company is 30 September
of the assessment year.
XX The last date of filing return for a company is 15 July of assessment year. If 15
July of assessment year falls within 6 months from the end of the income year
of the company, it has to file the return within 6 months from the end of the
income year.
23. Filing of revised return

[Section – 78]
Following persons can file a revised return at any time before the assessment is
made:
XX A person who has not filed a return under Section – 75

XX A person who has not filed a return as required by a notice issued by the DCT
under Section – 77
XX A person who has filed a return but discovered any omission or incorrect statement
in such return
24. Return of withholding tax

[Section – 75A]
Every company is required to file a return of withholding tax collected or deducted

at source to the Deputy Commissioner of Taxes where it is being assessed. Such
return has to be filed quarterly, within 15 October, 15 January, 15 April and 15 July
of each financial year. However the deadline of submission may be extended by DCT
up to 15 days.
The return of withholding tax shall be filed using the form prescribed in Rule – 24A.
The return has to be verified and signed off by the principal officer of the company
and accompanied by a statement of deduction or collection of tax and copy of
treasury challans or pay orders.
If a company required to deduct, collect or pay to the credit of the Government tax,

fails to do so, it will be treated as an assessee in default and penalized under Section
– 124 of ITO, 1984.
25. Payment of tax on the basis of return

[Section – 74]
Every person who is required to file a return under Section – 75, 77, 78, 89(2), 91(3)
& 93(1) has to pay tax on or before the date on which he/she files the return.
The amount of tax to be payable by him/her would be higher of (a) tax on the basis
of such return and (b) minimum tax liability as per Section - 16CCC, reduced by
the amount of any tax deducted from his/her income and any tax paid by him in
accordance with Chapter – VII: Payment of tax before assessment.
26. Advance payment of tax

[Section – 64 - 73]
An assessee is required to pay advance tax in a financial year, if he/she has total
income exceeding BDT 400,000 in the latest income year in respect of which he/she
has been assessed on regular basis or provisionally. If a person, who has not been
assessed previously by the way of regular assessment, estimates his/her income to
exceed BDT 400,000 in the income year, he/she is required to pay advance tax.
Amount of advance tax payable = Total income of the latest income year as assessed
on regular basis or provisionally x Rates in force in the respective financial year –
Amount of TDS
If a person liable to pay advance tax estimates that his/her tax liability in the
relevant assessment year would be less than the advance tax liability, he/she may
submit estimation of his/her tax liability and pay reduced advance tax accordingly.
Advance tax is payable in 4 equal installments on 15 September, 15 December, 15

March and 15 June.
27. Mode of payment

[Rule – 26A]
All payments of tax under Section - 64, 70, 73, 74, 82D, 83(2), 84, 89(3), 107(2)
(a), 120, 121(4)(a), 123 - 129, 135(2), 137(1), 154(1), 158(5), 160(1) and any other
payments under the Ordinance shall be made by pay order or demand draft or account
payee cheque of any scheduled bank in favor of concerned DCT or electronic payment.
However if the payment does not exceed BDT 10,000, then it can be made through
treasury challan.

ASSESSMENT
28. Provisional assessment

[Section – 81]
The DCT can make a provisional assessment of tax in a summary manner at any time
after 1 July of the concerned income year, based on the following –
XX Return, accounts and documents, if filed

XX The last assessment including provisional assessment, if return is not filed
29. Assessment on correct return

[Section – 82]
Where a return or revised return is filed fulfilling certain conditions and the DCT
is satisfied that the return is correct and complete without requiring the presence
of the assessee or production of any evidence, he will assess the total income
and determine the tax payable on the basis of such return and communicate the
assessment order to the assessee within 30 days.
30. Universal self-assessment

[Section – 82BB]
XX Where an assessee furnishes a return of income (manually or electronically)
fulfilling certain conditions, and pays tax on the basis of such return, the DCT
or other authorized official shall issue an acknowledgement receipt. Such
acknowledgement will be deemed as assessment order.
XX After processing the return, the DCT shall send the assessee a demand notice
along with an intimation specifying computed income, tax liability, tax credit
allowed, net tax payable or refundable and other particulars, within 30 days of
computation. Provided that no such intimation shall be sent after 12 months from
the end of the financial year in which the return is furnished.
XX No demand notice requiring the assessee to pay more tax will be made unless he/
she has been given an opportunity of being heard.

XX The Board may select a number of returns filed under universal self-assessment
for the purpose of audit. However such a return would not be selected for audit
if it shows at least 20% higher income than the income assessed or shown in the
immediately preceding assessment year and fulfills the following conditions:
-- The return is accompanied by corroborative evidences in support of tax
exempted income
-- It is accompanied by a copy of bank statement or account statement
supporting any sum or aggregate of sums of loan exceeding BDT 5,00,000
taken from any person during the income year
-- It does not show receipt of gift during the year
-- It does not show any income chargeable to tax at a rate reduced under
Section – 44
-- It does not show or result any refund
XX If a new assessee deriving income from business or profession shows income at
least not less than 25% of the capital invested in such business or profession and
pays tax accordingly, no question regarding the source of income would be raised
XX The initial capital investment or any fraction of it cannot be transferred within
the income year when the investment was made or within 5 years from the end
of such income year.
31. Spot assessment

[Section – 82D]
The DCT may fix tax payable by an assessee (except for a company), who has not
previously been assessed and carries on any business or profession in any shopping
center or commercial market or has a small establishment. The receipt obtained for
payment of tax in such case would be considered as assessment order.
32. Assessment after hearing

[Section – 83]
When a DCT is not satisfied with the correctness and completeness of a return or
revised return, he shall serve a notice requiring the presence of the person filing the
return for hearing or production of evidence supporting the return.
Within 30 days of the hearing and consideration of evidence, the DCT shall assess the
income and determine the amount of tax and communicate the order within 30 days
of such assessment.

33. Assessment on the basis of report of a Chartered
Accountant
[Section – 83AAA]
If the Board has reasonable cause to believe that a return or revised return filed
by a company is incorrect or incomplete, it may appoint a registered Chartered
Accountant to examine the accounts of the assesse.
The Chartered Accountant shall submit a report of findings to the Board. The DCT
shall assess the total income and determine the tax liability based on the report of
the Chartered Accountant, other evidences and hearing of the assessee.
34. Best judgement assessment

[Section – 84]
The DCT shall assess the total income and determine the tax liability as per his best
judgement in the following cases –
XX Where a person fails to file a return required by a notice under Section – 77

XX Where a person has not filed a return or revised return under Section – 78
XX Where a person fails to comply with the requirements of a notice under Section
– 79, 80 or 83(1)
35. Other assessments

Assessments for some special cases are handled with according to dedicated sections
as listed below:
Special case Reference

Special provisions regarding assessment of firms Section – 85
Assessment in case of change in the constitution of a firm Section – 86
Assessment in case of constitution of new successor firm Section – 87
Assessment in case of succession to business otherwise Section – 88
than on death
Assessment in case of discontinued business Section – 89
Assessment in case of partition of a Hindu undivided Section – 90
family
Assessment in case of persons leaving Bangladesh Section – 91
Assessment in case of income of a deceased person Section – 92
Assessment in case of income escaping assessment Section – 93

TAX INCENTIVE
There are broadly three categories of tax incentives that are provided to the
assessees by the Government with the aim to reduce their tax burden, promote
ethical and transparent tax practice and encourage investment. The categories are
tax exemption, reduced rate of tax and tax rebate.
36. Tax Exemption

The following table is an extensive but not exhaustive list of the tax exemptions
provided by the Government to different types of assessees (individual, firm,
association of persons, Hindu undivided family, local authority, company and other
artificial juridical person). It compiles the exemptions provided to such assessees
through Income Tax Ordinance, 1984 (ITO, 1984) and SROs issued by the Government
at different times.

Sl. Assesseee / Applicable for Source of Income Rate of Period of
No. exemption exemption
1 • Industrial undertakings set All income, profits 100% First 2 years
up in Dhaka and Chittagong and gains except
divisions (excluding Dhaka, capital gain and
Narayangonj, Gazipur,
disallowance under
Chittagong, Bandarban,
Rangamati and Khagrachari) Section – 30
between 1 July, 2011 and 30
June, 2019
• Engaged in production
of active pharmaceutical
ingredient industry and radio
pharmaceutical industry;
automobile manufacturing 60% 3rd year
industry; barrier contraceptive
and rubber latex; basic
chemicals or dyes and
chemicals; basic ingredients
of electronic industry
(e.g. resistance, capacitor,
transistor, integrator circuit);
bi-cycle manufacturing
industry; bio-fertilizer; bio-
technology; boilers; brick
made of automatic Hybrid 40% 4th year
Hoffman Kiln or Tunnel Kiln
technology; compressors;
computer hardware;
energy efficient appliances;
insecticide or pesticide; petro-
chemicals; pharmaceuticals;
processing of locally produced
fruits and vegetables; radio-
active (diffusion) application
industry (e.g. developing
quality or decaying polymer
or preservation of food 20% 5th year
or disinfecting medicinal
equipment); textile
machinery; tissue grafting;
tyre manufacturing industry or
other industrial undertakings
specified by the Government
• Subject to fulfilling certain
conditions
[Section – 46B]

2 • Industrial undertakings set up All income, profits 100% First 2 years
in Rajshashi, Khulna, Sylhet, and gains except
Barisal and Rangpur divisions capital gain and
(excluding City Corporation
disallowance under
area) and Bandarban,
Rangamati and Khagrachari Section – 30
between 1 July, 2011 and 30
June, 2019
• Engaged in production 70% 3rd year
of active pharmaceutical
ingredient industry and radio
pharmaceutical industry;
automobile manufacturing
industry; barrier contraceptive
and rubber latex; basic
chemicals or dyes and
chemicals; basic ingredients 55% 4th year
of electronic industry
(e.g. resistance, capacitor,
transistor, integrator circuit);
bi-cycle manufacturing
industry; bio-fertilizer; bio-
technology; boilers; brick
made of automatic Hybrid
Hoffman Kiln or Tunnel Kiln 40% 5th year
technology; compressors;
computer hardware;
energy efficient appliances;
insecticide or pesticide; petro-
chemicals; pharmaceuticals;
processing of locally produced
fruits and vegetables; radio-
active (diffusion) application 25% 6th year
industry (e.g. developing
quality or decaying polymer
or preservation of food
or disinfecting medicinal
equipment); textile
machinery; tissue grafting;
tyre manufacturing industry or
other industrial undertakings 20% 7th to 10th
specified by the Government year
• Subject to fulfilling certain
conditions
[Section – 46B]

3 • Physical infrastructure All income, profits 100% First 2 years
facilities set up between 1 and gains except
July, 2011 and 30 June, 2019 capital gain and
• Includes deep sea port; disallowance under 80% 3rd year
elevated expressway; Section – 30
flyover; gas pipeline;
hi-tech park; Information 70% 4th year
and Communication
Technology (ICT) village or
software technology zone; 60% 5th year
Information Technology
(IT) park; large water
treatment plant and 50% 6th year
supply through pipeline;
Liquefied Natural Gas
(LNG) terminal and 40% 7th year
transmission line;
mono-rail; rapid transit;
renewable energy (e.g. 30% 8th year
energy saving bulb,
solar energy plant,
windmill); sea or river 20% 9th year
port; toll road or bridge;
underground rail; waste
treatment plant or other 10% 10th year
physical infrastructure
facilities specified by the
Government
• Subject to fulfilling
certain conditions
[Section – 46C]
4 Industries established on Income from such 100% First 2 years
or after 1 January, 2012 in industry
the Export Processing Zones
of Dhaka and Chittagong
divisions (except in
50% Next 2
Bandarban, Rangamati &
Khagrachhari); as mentioned years
in the Bangladesh Export
Processing Zones Act,
1980 (Section - 10) or the 25% Next 1 year
Bangladesh Private Export
Processing Zones Act, 1996
[SRO – 219 – AIN / IT / 2012]

5 Industries established on Income from such 100% First 3 years
or after 1 January, 2012 industry
in the Export Processing
Zones of Bandarban,
Rangamati, Khagrachhari 50% Next 3
and Divisions other than years
Dhaka and Chittagong
divisions; as mentioned
in the Bangladesh Export 25% Next 1 year
Processing Zones Act,
1980 (Section - 10) or the
Bangladesh Private Export
Processing Zones Act, 1996
[SRO – 219 - AIN / IT /
2012]
6 Private power generation • Income from Full 15 years
companies (except power generation from the
coal based electricity business date of
generation companies) • Interest payable starting
starting operation within on foreign loan operation
31 December, 2014 • Royalties,
[SRO – 211 – AIN / IT / technical
2013] know-how
and technical
assistance fees
• Capital gain
form transfer of
company’s share
7 Private coal based • Income from Full 15 years
electricity generation power generation from the
companies signing contract business date of
within 30 June, 2020 • Interest payable starting
[SRO – 213-AIN / IT / 2013] on foreign loan operation
• Royalties,
technical
know-how
and technical
assistance fees
• Capital gain
form transfer of
company’s share

8 Private power generation Income from power 100% First 5 years
companies (except generation business 50% Next 3
coal based electricity years
generation companies) 25% Nest 2 years
starting operation on or
after 1 January, 2015
[SRO – 212 – AIN / IT /
2013]
9 Renewable energy projects Income from such Full 5 years
[SRO – 228 – AIN / IT / projects from the
2009] date of
commercial
production
10 • Industrial undertaking Income from such 100% First 2 years
engaged in production of business
rice bran oil
• Commencing production
50% Next 2
by 30 June, 2019
years
• Set up in Dhaka and
Chittagong divisions
(excluding city 25% Next 1 year
corporation area,
Bandarban, Rangamati
and Khagrachari
districts)
[6th Schedule, Part – A,
Para – 45]
11 • Industrial undertaking Income from such 100% First 3 years
engaged in production of business
rice bran oil
• Commencing production
by 30 June, 2019 50% Next 3
• Set up in Rajshashi, years
Khulna, Sylhet, Barisal
and Rangpur divisions
(excluding city 25% Next 4
corporation area) and years
and Khagrachari districts
Para – 45]

12 Cinema hall or Cineplex set Income derived 100% First 2 years
up in Dhaka and Chittagong from such cinema
divisions (excluding hall or Cineplex
50% Next 2
and Khagrachari districts)
starting commercial years
exhibition between 1 July
2012 and 30 June 2019 25% Next 1 year
Para – 44]
13 Cinema hall or Cineplex set Income derived 100% First 3 years

up in Rajshashi, Khulna, from such cinema
Sylhet, Barisal and Rangpur hall or Cineplex
divisions and Bandarban, 50% Next 3
Rangamati and Khagrachari years
districts starting 25% Next 4
commercial exhibition years
between 1 July 2012 and
30 June 2019
Para – 44]
14 Software development Income from such Full 1 July, 2008
or Nationwide business to 30 June,
Telecommunication 2024
Transmission Network
(NTTN) or Information
Technology Enabled
Services (ITES) business
Para – 33]
15 Business of corn or maize Income from such 50% Not
or sugar beet production business specified
Para – 46]
16 • Export business Income from 50% Not
• All except company not business of export specified
registered in Bangladesh
• Not enjoying any other
exemption or reduction
in tax rate
Para – 28]

17 • Handicraft export Income from such Full 1 July, 2008
business business to 30 June,
[6th Schedule, Part – A, 2019
Para – 35]
18 • Small and medium Income from such Full Not

enterprise (SME) engaged business specified
in production of goods
• Maximum annual
turnover BDT 30 Lakh
Para – 39]
19 Companies investing in Income from such Full Period

Bangladesh under any bi- company specified in
lateral treaty / contract the treaty /
between Bangladesh contract
Government and any
foreign Government or
investment organization
established by any foreign
Government
[SRO – 32 - AIN / IT / 1990]
20 Company Income donated to Upto lower Not

[6th Schedule, Part – A, funds established of specified
Para – 47] under Trust of • 20% of
Prime Minister’s income
Education of the
Assistance Act, company
2012) • 8 crore
21 NGO registered with NGO Operation of micro Full Not

Affairs Bureau credit specified
Para – 1A]

22 Voluntary organizations Income from micro- Full Not
and NGO registered under credit operation specified
Societies Registration Act,
1860, Trusts Act, 1882 or
Voluntary Social Welfare
Agencies (Registration and
Control) Ordinance, 1961
[SRO – 283 – AIN / IT /
2002]
23 Religious or charitable Voluntary Full Not

institution contribution specified
[6th Schedule, Part – A, applicable to
Para – 2] religious and
charitable purpose
24 Trust or other legal Income from house Full / Not

obligation held for property proportion specified
religious or charitable applied or
purpose set apart
[6th Schedule, Part – A, for such
Para – 1] religious or
charitable
purpose
25 Trustee Income on behalf Full Not

[6th Schedule, Part – A, of a recognized specified
Para – 6] provident
fund, approved
superannuation fund,
approved pension
fund, approved
gratuity fund
26 Commercial and trade All income except Full Not

association, commercial and income from specified
trade federation interest and income
[SRO – 210 – AIN / IT / 2013] from business

27 Co-operative society • Income from Full Not
[Section – 47] business of specified
agricultural or rural
credit; cottage
industry; marketing
of agricultural
produce of its
members; purchase
of agricultural
implements, seeds,
livestock or other
articles intended
for agriculture for
the purpose of
supplying them to
its members; such
processing of the
agricultural produce
of its members as is
ordinarily employed
by a cultivator
to render the
agricultural produce
marketable
• Income from
letting of godowns
or warehouse for
the purpose of
storage, processing
or facilitating
the marketing
of commodities
belonging or meant
for sale to its
members
28 Private agricultural college All income Full Not
or private agricultural specified
university
Para – 37]

29 • Educational institution All income except Full Not
interest and specified
• Enlisted for Monthly
dividend
Pay Order (MPO) of the
Government
• Following the curriculum
approved by the
Government
• Governed by a
body formed as per
Government rules and
regulations
Para – 52]
30 • Public university All income except Full Not
interest and specified
• Professional institute
dividend
established under
any law and run by
professional body of
Chartered Accountants
or Cost and Management
Accountants or
Chartered Secretaries
Para – 53]
31 Local Government All income Full Not

[6th Schedule, Part – A, specified
Para – 3]
32 Partner of a firm Share of capital Full Not

[6th Schedule, Part – A, gain on which tax specified
Para – 18] has already been
paid

33 Individual earning income Special allowance, Full Not
from salary benefits or specified
[6th Schedule, Part – A] perquisites granted
for official purpose
[Para – 5]
Pension Full Not
[Para – 8] Specified
Gratuity Upto BDT 2 Not
[Para – 20] crore 50 lakh specified
Interest credited Lower of Not
on accumulated • Actual specified
balance of interest
recognized credited
provident fund • Interest at
[Para – 25] 14,5%
Payment form Full Not
provident fund as specified
per Provident Funds
Act, 1925
[Para – 21]
Payment from Full Not
recognized specified
provident fund
[Para – 21]
Payment from Full Not
approved specified
superannuation
fund
[Para – 21]
Payment Full Not
from Workers specified
participation fund
established under
Bangladesh Labour
Act, 2006
[Para – 21]
34 Individual Bangladeshi Foreign remittance Full Not
Citizen brought in specified
[6th Schedule, Part – A, Bangladesh as per
Para – 48] existing laws

35 Individual whose only Agricultural income BDT 2 lakh Not
source of income is specified
agriculture
Para – 29]
36 Indigenous Hillman of Income from Full Not
Rangamati, Bandarban and economic activities specified
Khagrachari districts undertaken in such
[6th Schedule, Part – A, districts
Para – 27]
37 Foreign faculty members, Salaries and Full Not

teaching, research or allowances specified
library staff members,
administrators, officers,
experts, technicians,
visiting personnel of Asian
University for Women
[SRO – 17 - AIN / IT / 2009]
38 Government employee All benefits and Full Not

[SRO – 198 – AIN / IT / allowances except specified
2015] for basic salary,
festival bonus and
bonus
39 Government employee Monetary award Full Not
[SRO – 245 – ACT / IT / received for specified
2001] outstanding
contribution
towards
Government
40 Employees of Government Amount received Full Not
organization, local on voluntary specified
authority, autonomous or retirement
semi-autonomous body
including the units or
enterprises controlled by it
Para – 26]

41 Chief justice, judges of All benefits and Full Not
Appellate Division of allowances except specified
Bangladesh supreme court, for basic salary
judges of High Court
Division
[SRO – 227 – AIN / IT /
2011]
42 Prime minister, Speaker, All benefits and Full Not
Minister, Deputy Speaker, allowances except specified
State Minister, Deputy for basic salary or
Minister and Advisor having remuneration
Ministerial status and
Members of Parliament
[SRO – 226 – AIN / IT /
2011]
43 Expatriates working in Income from Full 3 years
private power generation working in private from the
companies (except power generation date of
coal based electricity companies arrival in
generation companies) (except coal Bangladesh
starting commercial based electricity
production within 31 generation
December, 2014 companies)
[SRO – 211 – AIN / IT /
2013]
44 Expatriates working Income from Full 3 years
in private coal based working in from the
electricity generation private coal date of
companies signing contract based electricity arrival in
within 30 June, 2020 generation Bangladesh
[SRO – 213 – AIN / IT / company
2013]
45 Expatriates working in Salary and Full 3 years

Dhaka Elevated Expressway allowances from from 13
PPP project the project August,
[SRO – 290 – AIN / IT / 2012
2012]

46 Expatriates working in Salaries and Full Not
International Committee remuneration specified
of Red Cross (ICRC) in provided by
Bangladesh International
[SRO – 80 – AIN / IT / 2010] Committee of Red
Cross (ICRC) from
Bangladesh or
abroad
47 Expatriate technician Salaries and Full Earlier of
working in industrial remunerations • 3 years from
undertakings having the date
approval from BEPZA of arrival in
within 22 March, 2009 Bangladesh
and starting commercial • 5 years from
production within 2012 company’s
[SRO – 28 / AIN / IT / 2010] commercial
production
48 Expatriates working as Income from salary Full Not
technician, professionals, specified
scientists, senior
administration staff,
advisor and consultant
in Local Development
Network Institutions under
Aga Khan Development
Network
[SRO – 101 – AIN / IT /
2003]
49 Expatriates working Salaries and Full Not
in foreign funded allowances received specified
development projects from the foreign
having bi-lateral treaty Government or
between Bangladesh the foreign funded
Government and the
development
foreign Government
or foreign funding project
organization
[SRO – 207 – AIN / IT /
1997]

50 Ambassador, high Remuneration Full Not
commissioner, envoy, from such state specified
minister, charge d’affairs, for service in such
commissioner, counsellor, capacity
consul de carrier, secretary,
advisor or attache of an
embassy, high commission,
legation or commission of a
foreign State
[6th Schedule, Part – A, Para – 7]
51 Trade commissioner Official salary; Full Not
or other official Provided that specified
representative of a foreign corresponding official
state in Bangladesh of Bangladesh in such
[6th Schedule, Part – A, Para – 7]
country enjoys such
exemption
52 Non-resident assessee Capital gain from Full Not
[6th Schedule, Part – A, transfer of stock specified
Para – 43] or shares of listed
company subject
to enjoying similar
exemption in
resident country
53 All shareholders except for Income arising Full Not
-- Companies defined in Section from trading / specified
– 2(20) transaction of
-- Firms defined in Section – 2(32)
-- Sponsor shareholder or
securities listed in
shareholder director of bank, any SEC approved
financial institution, merchant Stock Exchange
bank, insurance company, leasing (excluding
company, portfolio management Government
company, stock dealer or stock securities)
brokerage company
-- Shareholder (except sponsor
shareholder or shareholder
director) having 10% or more of
shares of total paid up capital of
a company / companies listed in
any stock exchange
-- Sponsor shareholder, director,
placement holder of a company
-- Sponsor or placement holder of a
mutual fund
[SRO – 196 – AIN/ IT / 2015]

54 All assessee • Income from any Full 10 years
[6th Schedule, Part – A, building situated from the
Para – 38] in areas other date of
than in City completion
Corporation, of
Cantonment
construction
Board, Tongi
Upazila,
Narayanganj
Paurashava,
Gazipur
Paurashava, and
any Paurashava
under Dhaka
District
• Maximum 5
storied with at
least 10 flats
• Constructed
between 1 July,
2009 and 30
June, 2014
55 All assessee Dividend from a BDT 25,000 Not
[6th Schedule, Part – A, company listed in specified
Para – 11A] Bangladesh
56 All assessee Income from a BDT 25,000 Not
[6th Schedule, Part – A, mutual fund or unit specified
Para – 22A] fund
57 All assessee Interest on tax- Full Not
[6th Schedule, Part – A, free Government specified
Para – 24] security
58 All assessee Income from wage Full Not
[6th Schedule, Part – A, earners development specified
Para – 24A] bond, US dollar
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

59 All assessee Interest from Full Not
[6th Schedule, Part – A, pensioner’s savings specified
Para – 32A] certificate or
wage earners bond
provided that the
limit of investment
is upto BDT 5 lakh
60 All assessee except Bank, Income from Full Not
Insurance or any Financial investment in specified
Institutions zero coupon bond
[6th Schedule, Part – A, issued by any bank,
Para – 40] insurance, financial
[SRO – 203 – AIN / IT / institution or other
2005] institution approved
by Bangladesh Bank
and SEC
61 All assessee Income from Upto BDT Not
[SRO – 154 – AIN / IT / Bangladesh 25,000 specified
1999] Industrial
Development
Bond issued by
nationalized
commercial bank
62 All assessee Income from Upto BDT Not

[SRO – 66 – AIN / IT / 2004] bond issued by 25,000 specified
Government,
semi-Government
or autonomous
body engaged
in electricity
production and
supply
63 All assessee Interest on savings Full Not

[SRO – 89 – AIN/ IT / 2003] pension scheme specified
of Government
approved scheduled
bank

64 All assessee except Income donated to Upto lower Not
company funds established of specified
[6th Schedule, Part – A, under Trust of • 20% of
Para – 47] Prime Minister’s income
Education of the
Assistance Act, assessee
2012) • BDT 1
crore
65 All assessee Income donated Full Not
[6th Schedule, Part – A, to any girls’ specified
Para – 49] school or girls’
college approved
by Ministry of
Education
66 All assessee Income donated to Full Not
[6th Schedule, Part – A, any Technical and specified
Para – 50] Vocational Training
Institute approved
by Ministry of
Education
67 All assessee Income donated Full Not

[6th Schedule, Part – A, to any national specified
Para – 50] level research
and development
(R&D) institute
of agriculture,
science, technology
and industrial
development
37. Reduced rate of tax

The following table lists down the reduced tax rate benefit offered by the Government
to different types of assessees. It compiles the reduced tax rate benefit provided to
such assessees through Income Tax Ordinance, 1984 (ITO, 1984) and SROs issued by
the Government at different times.

Sl. Rate of Period
Assessee / Applicable for Source of Income
No. tax applicable
1 Companies registered under • Yarn manufacturing, 15% 1 July, 2015
Companies Act, 1994 yarn dying, finishing, to 30 June,
[SRO – 193 – AIN / IT / 2015] coning 2019
• Fabric
manufacturing,
fabric dying,
finishing, printing
2 Industrial undertaking Manufacturing of jute 15% 1 July, 2015

engaged in manufacturing goods to 30 June,
of jute goods 2019
[SRO – 194 – AIN / IT / 2015]
3 Publicly traded ship building Income from export 5% Not specified

company registered under business
Companies Act, 1994
[SRO – 132 – AIN / IT / 2013]
4 Non-publicly traded ship Income from export 10% Not specified

building company registered business
under Companies Act, 1994
[SRO – 132 – AIN / IT / 2013]
5 Industries engaged in Income from such 5% 12 years from

production of freezer, business starting of
refrigerator, motorcycle and commercial
air conditioner (including production
production of small parts)
[SRO – 186 – AIN / IT / 2009]
[SRO – 78 – AIN / IT / 2010]

Sl. Rate of Period
No. tax applicable
6 Companies defined in Income arising from 10% Not specified
Section – 2(20) trading / transaction of
[SRO – 196 – AIN / IT / 2015] securities listed in any
SEC approved Stock
Exchange (excluding
Government securities)
7 Private university, private Income from such 15% Not specified

medical college, private institutions
dental college, private
engineering college, private
college providing education
on information technology
[SRO – 268 – AIN / IT / 2010]
8 Autonomous public utility All income except for 25% Not specified
providers capital gain
[SRO – 158 – AIN / IT / 2014]
9 National level research All income 15% Not specified

institute registered under
Trust Act, 1882 or Societies
Registration Act, 1860
[SRO – 163 – AIN / IT / 2014]
10 Firms defined in Section – Income arising from 10% Not specified

2(32) trading / transaction of
[SRO – 196 – AIN / IT / 2015] securities listed in any
SEC approved Stock
Exchange (excluding
Government securities)

Sl. Rate of Period
No. tax applicable
11 Sponsor shareholder or Income arising from 5% Not specified
shareholder director of trading / transaction of
bank, financial institution, securities listed in any
merchant bank, insurance SEC approved Stock
company, leasing company, Exchange (excluding
portfolio management Government securities)
company, stock dealer or
stock brokerage company
[SRO – 196 – AIN / IT / 2015]
12 Shareholder (except Income arising from 5% Not specified
sponsor shareholder or trading / transaction of
shareholder director) having securities listed in any
10% or more of shares of SEC approved Stock
total paid up capital of a Exchange (excluding
company / companies listed Government securities)
in any stock exchange
[SRO – 196 – AIN / IT / 2015]
13 All assessee Production of • 3% on Not specified
[SRO – 199 – AIN / IT / 2015] pelleted poultry first
feed, production of BDT 10
pelleted feed for lakh
cattle, shrimp and • 10% on
fish, production of next
seeds, marketing BDT 20
of locally produced lakh
seeds, cattle firming, • 15% on
dairy firming, frog rest
firming, horticulture, of the
floriculture, silk income
tree plantation, bee
keeping, silk worm
firming, mushroom
firming
38. Tax rebate

The following table lists down the tax rebate benefit offered by the Government
to different types of assessees. It compiles the tax rebate benefit provided to such
assessees through Income Tax Ordinance, 1984 (ITO, 1984), Finance Act, 2015 and
SROs issued by the Government at different times.

Sl. Rate of Period
Assessee / Applicable for Conditions
No. rebate applicable
1 Non-publicly traded company Transfer of minimum 10% on tax In the year
[Finance Act, 2015] 20% share of paid up of transfer
capital through IPO
2 Non-publicly traded mobile Transfer of 20% 10% on tax In the year
phone operator share of paid up of transfer
[Finance Act, 2015] capital through IPO
3 New manufacturing If commercial 20% on tax 10 years
industries established in operation starts
any area of Bangladesh within 1 July, 2014 –
except for the areas within 30 June, 2019
the jurisdiction of any City If any organization 20% on tax 10 Years
Corporation with existing
• Registered under commercial
Companies Act, 1994 operation within
• Not enjoying tax holiday, the jurisdiction of
tax exemption or reduced any city corporation
tax rate area shifts the
• Not publicly traded entire operation
company outside city
• Subject to fulfilling certain corporation area
conditions within 1 July, 2014 –
[SRO – 185 – AIN / IT / 30 June, 2019
2014]
If commercial 10% on tax Upto 30
operation started June, 2019
before 1 July, 2014
4 • Company donating for Donation to be 10% on Not

the purpose of corporate made in areas as expenditure specified
social responsibility specified by the Maximum
limit of
• Subject to fulfilling certain Government in the expenditure:
conditions relevant SROs Lower of
[SRO – 229 – AIN / IT / 2011] • 20% of
[SRO – 223 – AIN / IT / 2012] total
income
[SRO – 186 – AIN / IT / 2014] • BDT 12
crore

Sl. Rate of Period
Assessee / Applicable for Conditions
No. rebate applicable
5 Individual assessee If production 5% on Not
owning cottage industry volume exceeds 15% income specified
in less developed or least but does not exceed
developed area 25% as compared
[Finance Act, 2015] with preceding year
If production 10% on Not

volume exceeds 25% income specified
as compared with
preceding year
6 Partner of a firm Partnership income Average Not

[6th Schedule, Part – B, Para rate on specified
– 16] partnership
income
7 Individual assessee Investments to 15% on Not

[Section – 44(2)(b)] be made in areas admissible specified
specified in 6th investment
Schedule Part – B, allowance
ITO, 1984
Maximum limit
of investment
allowance is lower
of:
• BDT 1 crore 50
lakh
• 30% of total
income excluding
employer’s
contribution
to recognized
provident fund
(RPF), interest
on accumulated
balance of RPF
and income under
Section – 82C

39.Conditions for tax exemption for newly established
industrial undertaking and newly established physical
infrastructure facility
[Section – 46B, 46C]
Newly established industrial undertakings and newly established physical

infrastructure facilities (set up between 1 July, 2011 & 30 June, 2019) has to fulfil
the following conditions to enjoy the tax exemption (as stated in Point 1, 2 & 3 of
Tax Exemption table ) offered –
XX The industrial undertaking or physical facility is owned and managed either by
(a) a body corporate established by or under any law and with head office in
Bangladesh or (b) a company defined under Companies Act 1994 with registered
office in Bangladesh and having a subscribed & paid up capital of not less than
BDT 2,000,000 on the date of commencement of commercial production
XX 30% of the exempted income is invested in the said undertaking or facility or in
any new industrial undertaking or physical facility during the period of exemption
or within the following year of exemption
XX 10% of the exempted income is invested each year in the purchase of shares of
a listed company
XX The industrial undertaking or physical facility is not formed by splitting up,
reconstruction or reconstitution of an existing undertaking or facility or transfer
of machinery and plant from an existing undertaking or facility
XX The industrial undertaking is not engaged in purchase or sale of goods at a higher
/ lower price than market price with another industrial undertaking or company
having common sponsor directors
XX The income, profits and gains of the industrial undertaking or physical facility
shall be computed in the same manner applicable for income from business or
profession. Such income, profits and gains will be computed separately from
other income, profits and gains. Any loss sustained will be carried forward to be
set-off against income, profits and gains of the same industrial undertaking or
physical facility
XX The industrial undertaking or physical facility obtains approval for such tax
exemption in the prescribed manner.
40. Investment allowances eligible for tax credit

[Sixth Schedule, Part – B]
The following table summarizes the areas, investment in which will be eligible for
tax credit as per Sixth Schedule, Part – B.

Sl. Particulars Reference
1 Life insurance premium paid by an individual for Para - 1
insurance for the life of self, spouse or a minor child upto
10% of actual sum assured
2 Life insurance premium paid by a Hindu undivided family Para - 2
for the life of a male member or his wife
3 Contribution deducted from salary paid by Government to Para - 3
secure deferred annuity or provision for wife or children
4 Contribution to provident fund under Provident Fund Act, 1925 Para - 4
5 Employer’s and employees contribution to a recognized Para - 5
provident fund
6 Annual contribution to approved superannuation fund Para - 6
7 Investment in Board approved Para - 10
• Savings certificate and instrument
• Unit certificates and mutual fund certificates issued
by any financial institution or ICB and its subsidiaries
• Government securities
• Shares of investment companies
Not applicable for company
8 Deposit pension scheme upto BDT 60,000 Para - 11
9 Donation to a charitable hospital, subject to certain Para – 11A
conditions
10 Donation to a charitable organization set up for welfare Para – 11B
of retarded people, subject to certain conditions
11 Zakat paid to Zakat Fund; Donation or contribution to Para – 13
a charitable fund established by or under Zakat Fund
Ordinance, 1982
12 Sum paid to benevolent fund or premium paid to group Para – 17
insurance scheme
13 Donation to any socio-economic or cultural development Para - 21
institution established by Aga Khan Development Network
14 Donation to Government approved philanthropic or Para - 22
educational institution

Sl. Particulars Reference
15 Sum invested by an individual for purchase of one Para – 23
computer or one laptop
16 Donation to a national level institution set-up in memory Para – 24
of liberation war
17 Donation to a national level institution set-up in memory Para – 25
of the Father of the Nation
18 Sum invested by an individual in acquisition of any stocks Para – 27
or shares of a company, mutual fund or debenture listed
with any stock exchange
19 Sum invested by an individual for purchase of Bangladesh Para - 28
Government Treasury Bond
41. CSR activities eligible for tax credit

[SRO – 229 – AIN / IT / 2011, SRO – 223 – AIN / IT / 2012, SRO – 186 – AIN / IT / 2014]
The CSR activities for which a company may avail tax rebate facilities are listed
below
XX Donation made to natural disaster affected people through Government

organization
XX Donations made to institution engaged in establishment and maintenance of old
home
XX Donations made to social institution engaged in the welfare of mentally or
physically disabled people
XX Donations to organizations engaged in educating street children
XX Donations to organizations engaged in projects on accommodation for the slum
dwellers
XX Donations to social institutions engaged in campaign for women rights and against
dowry system
XX Donations made to institution engaged in maintenance and rehabilitation of
orphan/rootless children
XX Donations made to institutions engaged in research on liberation war, expansion
of the consciousness of liberation war and the act of honorable living of the
freedom fighters
XX Donations made to institutions engaged in sanitation and sewerage work at Chittagong
Hill Districts, char areas and areas surrounding breaking up of banks of river

XX Donation made to institution engaged in medicating cleft leap, cataract, cancer
and leprosy
XX Donation made to person or institution engaged in treatment of acid affected
people
XX Donation to specialized hospital like cancer hospital, lever hospital, kidney
hospital, thalassemia hospital, eye hospital and cardiology hospital for free
treatment to poor patient
XX Donation to public universities
XX Donation to Government approved educational institution for giving stipend
to insolvent meritorious freedom fighters’ children with a view to providing
technical or vocational education to them
XX Any assistance made to schools and colleges under MPO for improving computer
and English education
XX Donations to organizations engaged in providing technical and vocational training
to unskilled or semi-skilled labor for export of human resources
XX Donations made to national sports institutions engaged in the development of
infrastructure and training at national level
XX Any contribution to museum made for freedom fighter at national level
XX Any contribution to organization engaged in the preservation of the memories of
the Father of the Nation
XX Any donation to any social welfare organization, NGO or not for profit organization
engaged with awareness, treatment or rehabilitation for HIV, AIDS and the drug
addicted people
XX Any donation to any social welfare organization, NGO or not for profit organization
engaged with rehabilitation for children or women rescued from overseas
trafficking
XX Any donation to any Government approved fund for national disaster or
tournament or national carnival
A company cannot charge such CSR expenditure as expense in the profit or loss
account. Moreover such company has to fulfil the following conditions to claim
rebate against the above mentioned CSR activities –
XX Must pay salaries and allowances to its workers regularly and must have waste
treatment plant if it is involved with the production of industrial goods
XX Must pay income tax, VAT and duty timely and must repay institutional loans
XX Can only donate money to the institutions recognized by the Government for the
purpose of CSR
XX Must fulfil all rules as per Bangladesh Labour Act, 2006

42. Special tax treatment
[Section – 19BBBBB, 19C]
Special tax treatment benefit has been given to persons who have income with
unexplained source. If such persons invest in the following areas and pay tax at
certain rates before the assessment of the relevant year, the source of invested
amount would be deemed explained.
XX Investment in residential building and apartment [Section – 19BBBBB]

XX Investment in purchase of bond under Bangladesh Infrastructure Finance Bond
[Section – 19C]
43. Avoidance of Double Taxation

[Section – 144, 145]
The Government of Bangladesh may enter into an agreement with the Government
of other countries for the avoidance of double taxation and prevention of fiscal
evasion with respect to taxes on income leviable under the ITO, 1984 and also under
corresponding law of such other countries. Under the DTA agreement, each dominion
determines the total income of an assessee in the ordinary way under its own laws.
However each country is entitled to retain tax in respect of the source of income
or categories of transactions which are specified in the agreement, at the rates
embodied in the agreement.
At present, Government of Bangladesh has entered into agreement for the avoidance
of double taxation with the following 32 countries –
Belarus Belgium Canada China

Denmark France Germany India
Indonesia Italy Japan Malaysia
Mauritius Myanmar Netherlands Norway
Pakistan Philippines Poland Romania
Saudi Arabia Singapore South Korea Sri Lanka
Sweden Switzerland Thailand Turkey
UAE UK USA Vietnam

TRANSFER PRICING
44. Transfer pricing

Transfer pricing is increasingly influencing significant changes in tax legislation
around the world. Transfer pricing refers to the prices charged between related
parties in different tax jurisdictions for goods, services, assets, and the right to
use intangibles, interest, guarantee fees and factoring fees. Transfer prices must
be determined following the arm’s length principle which requires that the pricing
and the related terms and conditions set between associated entities should be
consistent to the prices and terms and conditions that would have been charged
if the goods / services had been provided / received from an independent party.
If the transfer prices are set in a manner that is inconsistent with the arm’s length
principle, tax authorities raise the concerns of the possibility of profit shifting.
In Bangladesh, regulations of transfer pricing enacted from the Fiscal Year 2012-2013.
44.1 Procedure from record keeping to submission of return
Person having international transactions with

associated enterprise
Person maintains records of

transactions in prescribed manner
Person calculates adjustment

Transactions are at for transfer price on the
arm’s length basis No basis of arm’s length price
Yes Submits (a) statement of international

transactions and (b) report from a Chartered
Accountant (if value of international
transaction exceed BDT 3 crore)
Submits income tax return

44.2 Assessment procedure
DCT receives the return
along with other documents
DCT checks the required

documents are submitted
with the return
Int’l transactions No
are on arm’s DCT refers the return to TPO
length price
Yes
TPO computes the arm’s length
Transfer pricing adjustment price using appropriate method
is not required and sends back to DCT
DCT completes the DCT makes adjustment of

assessment transfer pricing on the basis of
computation of TPO
44.3 Computation of arm’s length price
[Section - 107C]
The arm’s length price in relation to international transaction shall be determined

by applying any of the following method –
i. Comparable uncontrolled price method
According to comparable uncontrolled price method, price charged in

an international transaction is compared with price in an uncontrolled
transaction. Then the international transactions are adjusted with the
difference to get arm’s length price.
ii. Resale price method
Under resale price method, normal gross margin is subtracted from the price
that would have been obtained from an independent enterprise. Then some

other adjustment for custom duty, risk involved, asset employed, time gap,
accounting practices etc. are made to the price of international transaction
to determine the arm’s length price.
iii. Cost plus method
Under cost plus method, cost base for international transaction is determined
considering direct and indirect cost incurred for supply of goods or provision
of service. Then comparable profit markup after adjustment of certain factors
is added to the cost base to determine the arm’s length price.
iv. Profit split method
Under the profit split method, the portion of common profit that would be
expected to be earned from comparable uncontrolled transactions is allocated
to controlled transactions of the participating enterprises. Each of the associated
enterprise is allocated a basic return based on the basic functions they perform
as determined with reference to the market returns earned by independent
enterprise in similar transactions. The basic return does not account for the use
of unique assets of the associated enterprises. The residual profit attributable to
the unique asset is calculated by deducting the sum of basic returns allocated
to associated enterprises from the combined profit. Then the residual profit is
allocated to the associated enterprises based on the relative contribution. Such
allocated profit is considered the arm’s length price.
v. Transactional net margin method
Under the net profit margin method, net profit margin is computed in
respect of international transactions, both in associated enterprises and in
independent enterprises regarding the same appropriate base such as costs,
sales or assets. Then appropriate adjustment is given to the net profit margin
earned by an independent enterprise to adjust the differences. Finally, the
adjusted net profit margin is applied to the appropriate bases to arrive at the
arm’s length transaction.
vi. Other appropriate method
Any other appropriate method may be used to determine the arm’s length
price which yields consistent result with the arm’s length price.

44.4 Reference to Transfer Pricing Officer
[Section - 107D]
With prior approval of the Board, DCT may refer to Transfer Pricing Officer (TPO)
for determination of arm’s length price of any international transaction. TPO
shall serve the assessee a notice to submit relevant evidence in relation to the
international transaction in question. Considering all evidence produced to
him and other relevant information gathered by him, the TPO shall determine
arm’s length price and shall send a copy of his order to the DCT. Then the DCT
shall compute the total income of the assessee considering arm’s length price
computed by the TPO in relation to international transaction.
44.5 Maintenance and keeping of information, documents and records

[Section - 107E; Rule - 73]
Every person having international transaction shall keep and maintain the
following information, documents and records provided that the aggregate value
of international transactions exceeds BDT 3 crore in the particular income year –
XX Ownership profile including organizational structure, name, location, legal

status, etc.
XX Business profile of the group including line of business, industry dynamics,
market and economic environment etc.
XX Brief business profile of each member of the group
XX Details of all transactions with the associated enterprises
XX Manner of choosing tested party including rationale for choice
XX Information on method chosen for determining arm’s length price
44.6 Statement of international transaction to be submitted

[Section - 107EE; Rule - 75A]
Every person entering into an international transaction shall furnish statement of

international transactions along with the return of income.
44.7 Report from an accountant to be furnished

[Section - 107F; Rule - 75]
Every person entering into international transactions with aggregate value

exceeding BDT 3 crore during an income year shall furnish a report from a
Chartered Accountant or Cost and Management Accountant.

Offences, penalties
& punishments
45. Offences, penalties & punishments

The following table summarizes the various offences and related penalties and
punishments under ITO, 1984.
Sl. Offences Penalties & Punishments Reference
1 Failure to deduct/collect tax 2% of the amount of tax to Sec - 57

at source be deducted, collected or
Failure to deposit deducted/ deposited per month
collected tax into national
exchequer
2 Failure to give notice to Maximum the amount of tax Sec – 89(3)
the DCT regarding the subsequently assessed
discontinuance of business
3 Failure to keep, maintain Maximum 1% of the value of Sec - 107G
or furnish information, each international transaction
documents or records to the
Deputy Commissioner of Taxes
as per Section – 107E
4 Failure to comply with the Maximum 1% of the value of Sec - 107H
notice or requisition under each international transaction
Section – 107C regarding
computation of arm’s length
price
5 Failure to comply with the Maximum 2% of the value of Sec - 107HH
provision of Section - 107EE each international transaction
regarding submission of
statement of international
transactions
6 Failure to furnish report from Maximum BDT 300,000 Sec - 107I
a Chartered Accountant under
Section – 107F

7 Failure to maintain accounts Maximum 1.5 times of tax Sec – 123

in the prescribed manner as liability
per Section – 35(2) (assessee Maximum BDT 100, where the
does not have income from total income does not exceed
house property) the maximum amount on which
tax is not chargeable
8 Failure to maintain accounts Higher of (a) 50% of taxes Sec – 123
in the prescribed manner as payable on house property
per Section – 35(2) (assessee income or (b) BDT 50,000
has income from house
property)
9 Failure to file return under Higher of (a) 10% of last Sec – 124
Section - 75,77, 89(2), 91(3), assessed tax or (b) BDT 1,000
93(1), 75A For continuing default: BDT 50
for every day
Provided that maximum penalty
for an individual assessee not
previously assessed: BDT 5,000
Maximum penalty for an
individual assessee previously
assessed: Higher of (a) 50% of
last assessed tax or (b) BDT
1,000
10 Failure to furnish certificate, BDT 500 Sec – 124
statement, accounts, For continuing default: BDT 250
information or TIN certificate per month
required under Section - 58,
108, 109, 110 and 184C
11 Failure to furnish information BDT 25,000 Sec – 124
required under Section – 113 For continuing default: BDT 500
per day
12 Use of fake TIN or TIN of Maximum BDT20,000 Sec – 124A
another person
13 Failure to verify the Maximum BDT 50,000 Sec – 124AA
authenticity of TIN
14 Failure to pay advance tax Maximum the amount of Sec – 125
shortfall
15 Non-compliance with any Maximum the amount of tax Sec – 126
notice under Section – 79,80, liability
83(1) and 83(2)

16 Failure to pay tax on the basis Maximum 25% of of unpaid tax Sec – 127
of return under Section – 74
17 Concealment of income 15% of the tax evasion Sec – 128
If concealment detected after
1 year: Additional 15% for each
preceding year
18 Incorrect or false audit report Minimum: BDT 50,000 Sec – 129A

by Chartered Accountant Maximum: BDT 200,000
19 Furnishing fake audit report BDT 100,000 Sec – 129B
20 Default in payment of tax Maximum amount of arrear tax Sec – 137

21 Non-compliance of certain Imprisonment upto 1 year or Sec – 164
obligations under Section - fine or both
164
22 False statement in Imprisonment of 3 months to 3 Sec – 165

verification years or fine or both
23 Use of fake TIN or TIN of Imprisonment upto 3 year or Sec – 165A

another person fine upto BDT 50,000 or both
24 Furnishing fake audit report Imprisonment of 3 months to 3 Sec – 165AA
years or fine upto BDT 100,000
or both
25 Obstruction of income tax Imprisonment upto 1 year or Sec – 165B
authority fine or both
26 Unauthorized employment of Imprisonment of 3 months to 3 Sec – 165C
a non-Bangladeshi citizen years or fine upto BDT 500,000
or both
27 Concealment of income Imprisonment of 3 months to 5 Sec – 166

years or fine or both
28 Disposal of property to Imprisonment upto 5 years or Sec – 167

prevent attachment fine or both
29 Disclosure of protected Imprisonment upto 6 months or Sec – 168

information fine or both

VALUE ADDED TAX
SUMMARY OF
VALUE ADDED TAX

46. Taxes imposed under VAT Act, 1991
Three different types of taxes are imposed under the provisions of the Value Added
Tax Act, 1991.
XX Value Added Tax at 15% on value addition, to be paid by importers, manufacturers,

and service providers having minimum turnover of BDT 80 lakh. [Section – 3]
XX Turnover Tax at 3% to be paid by persons and organizations having turnover

amount not exceeding BDT 80 lakh and who is not required to be registered for
VAT under Section - 15. [Section – 8; Rule – 4]
XX Supplementary Duty at different rates ranging from 10% to 500% on luxurious,

non-essential and socially undesirable goods. [Section – 7]
47. Goods and services chargeable to VAT

[Section - 3]
According to the Section - 3(1) of the Value Added Tax Act, 1991, 15% VAT is imposed
on following goods and services –
XX All goods imported or supplied in Bangladesh, except for those stated in the First
Schedule of the VAT Act, 1991
XX All services provided or imported in Bangladesh, except for those stated in the
Second Schedule of the VAT Act, 1991
However zero rate tax shall be imposed on following goods and services –
XX Any goods or services exported or deemed to have been exported from Bangladesh
XX Food and other things supplied in accordance with Section - 24 of the Customs
Act, 1969 to any transport leaving Bangladesh, for consumption in the transport
outside Bangladesh
Provided that provisions of zero rate tax shall not be applicable in the following
cases –
XX Any goods intended to be re-imported into Bangladesh
XX oods that have been presented for export in accordance with Section - 131 of
G
the Customs Act, 1969 but have not been exported within 30 days of submission
of the bill of export or such extended time(if any) allowed by the Commissioner.

48. Persons responsible to pay the VAT
[Section – 3]
According to Section - 3(3) of the Value Added Tax Act, 1991, VAT shall paid by –
XX In the case of imported goods, the importer of the goods imported at import
stage
XX In the case of goods manufactured or produced in Bangladesh, the supplier at

production or manufacture stage
XX In the case of services, the provider of services
XX In the case of service providing from outside the territory of Bangladesh, service
receiver
XX In other cases, the supplier and the receiver of service
49. VAT deduction at source

[Rule – 18A]
Following persons are responsible to deduct VAT at source –
XX Government organization
XX Semi-Government organization
XX Autonomous organization
XX NGO
XX Bank
XX Insurance
XX Financial Institutions
XX Limited company
XX Educational Institutions
XX Any enterprise having annual turnover of more than BDT 1 crore
50. Deposit of deducted VAT

Deducted VAT amount shall have to be deposited to Government exchequer with
following area code –

Commissionerate Areas Treasury Challan Financial Code
Large Tax-payer Unit LTU) 1/1133/0006/0311

Dhaka (North) 1/1133/0015/0311
Dhaka (South) 1/1133/0010/0311
Dhaka (East) 1/1133/0030/0311
Dhaka (West) 1/1133/0035/0311
Chittagong 1/1133/0025/0311
Comilla 1/1133/0040/0311
Sylhet 1/1133/0018/0311
Rajshahi 1/1133/0020/0311
Rangpur 1/1133/0045/0311
Jessore 1/1133/0005/0311
Khulna 1/1133/0001/0311
51. Scope of VAT and specified rates

The following table summarizes applicable VAT rates on various services along with
areas where VAT Deduction at Sources (VDS) are applicable –
Head Service Rate Applicability of

Sl. Service provider
No. Code of VAT VDS
1 S 001 S 001.10 Hotels including club 15% N/A
S 001.20 Restaurant (including club) 15% N/A

with air condition
Restaurant (including club) 7.5% N/A
without air condition
2 S 002 S 002.00 Decorators and caterers 15% VDS Applicable

No. Code of VAT VDS
3 S 003 S 003.10 Motor garage & workshop 7.5% VDS Applicable

S 003.20 Dockyard 7.5% VDS Applicable
4 S 004 S 004.00 Construction works / firms 5.5% VDS Applicable
(Builders)
5 S 005 S 005.10 Warehouse 15% N/A
S 005.20 Port for import or export 15% N/A
6 S 007 S 007.00 Advertisement organizations 15% VDS Applicable
7 S 008 S 008.10 Printing press 15% VDS Applicable
8 S 009 S 009.00 Auction 15% VDS Applicable

9 S 010 S 010.10 Land development organi- 3% VDS Applicable
zation
S 010.20 Building construction orga- VDS Applicable
nization
• 1-1,100 sq. feet 1.5%
• 1,101-1,600 sq. feet 2.5%
• Over 1,600 sq. feet 4.5%

10 S 011 S 011.10 Video cassette shop 15% N/A
S 011.20 Video games shop 15% N/A
S 011.30 Video, audio recording shop 15% N/A
S 011.40 Video and audio CD rent 15% N/A
provider shop
11 S 012 S 012.10 Telephone service provider 15% N/A
S 012.11 Tele-printer service provider 15% N/A
S 012.12 Telex service provider 15% N/A
S 012.13 Fax service provider 15% N/A
S 012.14 Internet service provider 15% N/A
S 012.20 Sim card distributors 15% N/A
12 S 013 S 013.00 Automated laundry 15% N/A
13 S 014 S 014.00 Indenting service 15% N/A
14 S 015 S 015.10 Freight forwarders 15% N/A
S 015.20 Clearing and forwarding 15% N/A
agent

No. Code of VAT VDS
15 S 017 S 017.00 Community center 15% N/A

16 S 018 S 018.00 Film studio 15% N/A
17 S 020 S 020.00 Survey sangstha 15% VDS Applicable
18 S 021 S 021.00 Plants or capital machiner- 15% VDS Applicable
ies rent provider
19 S 022 S 022.00 Sweet shop 15% N/A
20 S 023 S 023.10 Cinema hall or film distrib- 15% N/A
utor
S 023.20 Film producer 15% N/A
21 S 024 S 024.00 Sales center of furniture - At 6% VDS Applicable
the time of production
Sales center of furniture - 4% VDS Applicable
At the time of marketing,
subject to treasury challan
for 6% at production stage
22 S 025 S 025.00 WASA 15% N/A
23 S 026 S 026.00 Goldsmith, silversmith and 5% N/A
gold & silver trader
24 S 027 S 027.00 Insurance company 15% N/A
25 S 028 S 028.00 Courier & express mail 15% VDS Applicable
service
26 S 030 S 030.00 Beauty parlor 15% N/A
27 S 031 S 031.00 Repairing or servicing of 15% VDS Applicable
taxable goods
28 S 032 S 032.00 Consultancy firm and super- 15% VDS Applicable
visory firm
29 S 033 S 033.00 Lessee 15% VDS Applicable
30 S 034 S 034.00 Audit and accounting firm 15% VDS Applicable
31 S 035 S 035.00 Shipping agent 15% N/A
32 S 036 S 036.10 Air-conditioned Bus Service 15% N/A
S 036.20 Air-conditioned launch 15% N/A
service
S 036.30 Air-conditioned railway 15% N/A
service
33 S 037 S 037.00 Procurement provider 5% VDS Applicable

No. Code of VAT VDS
34 S 038 S 038.00 Organizer of cultural pro- 15% N/A

gram with foreign perform-
ers
35 S 039 S 039.10 Satellite cable operators 15% N/A
S 039.20 Satellite channel distribu- 15% N/A
tors
36 S 040 S 040.00 Security service provider 15% VDS Applicable
37 S 042 S 042.00 Automated saw-machine 15% N/A
38 S 045 S 045.00 Legal advisors 15% VDS Applicable
39 S 046 S 046.00 Health club and fitness 15% N/A
center
40 S 047 S 047.00 Sports organizer 15% N/A
41 S 048 S 048.00 Transport contractor - For 2.25% VDS Applicable
carrying petrol and related
goods
Transport contractor - 7.5% VDS Applicable
Other goods
42 S 049 S 049.00 Transport fare or rent-a-car 15% VDS Applicable
43 S 050 S 050.10 Architect, interior designer 15% VDS Applicable
or interior decorator
S 050.20 Graphics designer 15% VDS Applicable
44 S 051 S 051.00 Engineering firms 15% VDS Applicable
45 S 052 S 052.00 Sound and lighting instru- 15% VDS Applicable
ments rent providers
46 S 053 S 053.00 Present at board meeting 15% VDS Applicable
47 S 054 S 054.00 Advertisement with satel- 15% VDS Applicable
lite channel
48 S 056 S 056.00 Banking and non-banking 15% N/A
service provider
49 S 057 S 057.00 Electricity supplier 5% N/A
50 S 058 S 058.00 Chartered airplane or heli- 15% VDS Applicable
copter rent providers

No. Code of VAT VDS
51 S 059 S 059.00 Glass sheet manufacturer 15% N/A

52 S 060 S 060.00 Buyer of auction goods 4% VDS Applicable
53 S 061 S 061.00 Credit card supplying orga- 15% N/A
nization
54 S 062 S 062.00 Money changer 15% N/A
S 063 S 063.00 Tailoring shop 15% N/A
55 S 064 S 064.10 Amusement and theme park 15% N/A
56 S 064.20 Picnic spot and shooting 15% N/A
spot
57 S 065 S 065.00 House, floor & space 15% VDS Applicable
cleaning and maintenance
organization
58 S 066 S 066.00 Lottery ticket seller 15% VDS Applicable
59 S 067 S 067.00 Immigration advisor 7.5% N/A
60 S 068 S 068.00 Coaching center 15% N/A
61 S 069 S 069.00 English medium school 7.5% N/A
62 S 070 S 070.10 Private university 7.5% N/A
S 070.20 Medical and engineering 7.5% N/A
college
63 S 071 S 071.00 Event organizer 15% VDS Applicable
64 S 072 S 072.00 Human resource providers 15% VDS Applicable
65 S 074 S 074.00 Rent of office space or 9% N/A
building used for commer-
cial purpose
66 S 076 S 076.00 Social and sports related 15% N/A
club
67 S 078 S 078.00 Sales center of RMG of own 5% N/A
brand

No. Code of VAT VDS
68 S 099 S 099.00 Any services not spec- 15% N/A

ified under SRO – 175
-Ain/2011/598 -Mushak
dated 09 June 2011, Second
Schedule and Section - 14
of VAT Act, 1991 will be
taxed under this code
S 099.10 Information technology 4.5% VDS Applicable

enabled services
S 099.20 Other services 15% VDS Applicable
S 099.30 Sponsorship services 7.5% VDS Applicable
69 SRO – 242 Advance Trade VAT (ATV) 4% N/A
-Ain/2012/659
-Mushak dated 28
June 2012;
SRO – 124 -
Ain/2015/730
–Mushak dated 04
June, 2015

SUMMARY OF
GIFT TAX

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52. Gift tax
As per Section – 3 of the Gift Tax Act, 1990, gift tax is leviable on gifts made in any
financial year on and from 1 July 1990 at the rates prescribed in the schedule. As
per Section – 2(f), Gift means the transfer of any existing immovable or moveable
property by one person to another, made voluntarily and without consideration of
any money or money’s worth.
The value of property under gift (other than cash) shall be the value which, in the
opinion of the Deputy Commissioner of Taxes, it would fetch if sold in the open
market on the date of gift. When a property is not saleable in the open market and
such value cannot be determined, its value will be determined according to the rules
prescribed for the purpose. Methods of valuation of gift have been provided in the
Section - 5 of the Gift Tax Act, 1990.
As per Section – 20, provisions of the Gift Tax Act, 1990 shall not apply to gifts made
by following persons –
XX A body corporate established or constituted by or under any law

XX Any institution or fund whose income is exempt from income tax under Sixth
Schedule, Part – A, Para – 1 &2 of the Income Tax Ordinance, 1984
53. Exemption from Gift Tax

[Section – 4]
As per Section – 4 of the Gift Tax Act, 1990, gift tax shall not be charged in respect
of the following gifts made by any person –
XX Gift of property situated outside Bangladesh

XX Gift to the Government or any local authority
XX Gift to the following funds or institutions for charitable purpose –
-- Any university established under the law in force in Bangladesh or any
educational institution including polytechnic institute recognized by the
Education Board or recognized or run by the Government
-- Any hospital recognized or run by the Government or any local authority or

any hospital aided by the Government or any local authority
-- Any flood or disaster management fund established or approved by the

Government
-- Such institutions or funds for religious or charitable purposes, not being a

private religious institution or fund which does not ensure for the benefit of

the public, as are established in Bangladesh and approved by the Government
for such purposes, or to any institution established for religious or charitable
purposes and registered under any law for the time being in force, up to
20% of the total income determined for the concerned year or BDT 100,000
whichever is less
XX Gift to the dependent relative up to BDT 20,000 on the occasion of his/her

marriage
XX Gift by way of payment of policy of insurance or annuity for any person (other
than wife/spouse) dependent upon him for support and maintenance up to BDT
20,000
XX Gift under a will
XX Gift under contemplation of death
XX Gift to sons, daughters, father, mother, spouse, brothers and sisters
In addition to the above exemptions, gifts made in any financial year up to value of
BDT 20,000 are exempt from gift tax. The Government may by notification exempt
any class of gift or any class of person from gift tax.
54. Rates of Gift Tax

[Section - 3]
Gift tax is imposed at a 4 tier progressive rate. The value of taxable gift with
corresponding gift tax rate are quoted below –
Value of gift Rate of gift tax

On the first BDT 500,000 of the value of all taxable gifts 5%
On the next BDT 1,000,000 of the value of all taxable gifts 10%
On the next BDT 2,000,000 of the value of all taxable gifts 15%
On the balance of the value of all taxable gifts 20%
55 . Return of Gift Tax

[Section - 7]
Every person who had made taxable gift during any financial year of an amount as to
render him liable to gift tax under the Gift Tax Act, 1990, shall before 15 September
of the corresponding assessment year furnish a return to the Deputy Commissioner
of Taxes in the prescribed form and in the prescribed manner. Tax on the basis of the
return is payable on or before the date on which such return is furnished.

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TABLE OF CONTENTS

MAJOR CHANGES IN 2015 - 2016................................................................. 1

SUMMARY OF INCOME TAX........................................................................ 23

TAX RATE STRUCTURE............................................................................ 44

17 Tax deducted at source................................................................... 48

FILING OF RETURN & PAYMENT OF TAX........................................................ 63

OFFENCES, PENALTIES & PUNISHMENTS......................................................102

SUMMARY OF VALUE ADDED TAX................................................................105

SUMMARY OF GIFT TAX..........................................................................115

Bangladesh Tax Handbook 2015-2016 1

1.02 Personal tax rate structure [Finance Act, 2015]

Assessment Year: 2015-2016 Assessment Year: 2014-2015

Bangladesh Tax Handbook 2015-2016 3

1.03 Minimum tax [Finance Act, 2015]

Minimum tax liability for the individual assessee (including non-resident

Location of assessee Assessment Year Assessment Year

Assessees residing in Dhaka and BDT 5,000 BDT 3,000

Assessees residing in other City BDT 4,000 N/A

Assessees residing in Paurashavas at N/A BDT 2,000

1.04 Surcharge on individual assessee [Finance Act, 2015]

The following table shows a comparative analysis of the surcharge applicable

Bangladesh Tax Handbook 2015-2016 4

1.05 Corporate tax rate

Assessment Year Assessment Year

Bangladesh Tax Handbook 2015-2016 5

10 % tax rebate offered to publicly traded companies declaring at least 30%

1.06 Income year [Section – 2(35)]

Bangladesh Tax Handbook 2015-2016 6

The impact of change in definition of income year is on a company (not a

Bangladesh Tax Handbook 2015-2016 7

Similarly an assessee (except for company) following a different date than 30

1.07 Charge of additional tax [Section – 16B]

XX A public limited company, except for a banking or insurance company,

1.08 Charge of minimum tax for industries engaged in manufacturing of goods

1.09 Un-explained investments, etc., deemed to be income [Section – 19]

Bangladesh Tax Handbook 2015-2016 8

Areas of Amount tax Amount tax Reference

1.11 Voluntary disclosure of income [Section – 19E]

Through insertion of Section – 19E(3)(e), the following incomes have been

XX Income exempted from tax in the concerned income year

1.12 Allowable limit of perquisite [Section – 30 (e)]

The limit of perquisite paid to an employee which is allowable as deduction

Bangladesh Tax Handbook 2015-2016 9

1.14 Exemption of tax from newly established industrial undertaking

XX Automobile manufacturing industry, bi-cycle manufacturing industry,

1.15 Exemption of income of co-operative societies [Section – 47]

XX Income of dealings with members involving sale of goods, lending of

1.16 Deduction at source from salaries [Section – 50]

1.17 Deduction at source from interest on securities [Section – 51]

1.18 Deduction from the payment of certain services [Section – 52AA]

Bangladesh Tax Handbook 2015-2016 10

1.19 Collection of tax from cigarette manufacturers [Section - 52B]

Bangladesh Tax Handbook 2015-2016 11

Interest or profit arising from wage earners development bond, US Dollar

1.21 Collection of tax from travel agent [Section – 52JJ]

1.22 Collection of tax from manufacturer of soft drink [Section – 52S]

1.23 Deduction of tax from commission or remuneration paid to agent of foreign

10% tax to be deducted at source has been imposed on interest or share of

1.25 Deduction of tax from advertising bill of newspaper or magazine or private

1.27 Deduction of tax from dividend [Section - 54]

Section - 54 has been replaced and tax to be deducted at source on dividend

Bangladesh Tax Handbook 2015-2016 12

XX If the shareholder is a person other than a company, 10% if TIN is