Assignment

Corse Title: Taxation, Course Code: BBA321

Date of soft copy submission: September 06, 2020
Date of hard copy submission: after opening university
Instructions: i. write your name and id on the top of each page
ii. use white color clean page or fresh white color khata
iii. Keep it safely for the final submission of the hard copy after opening the campus
iv. You have to participate on line viva voce on this assignment and viva schedule will be
given later on.
Problem-1
On June 2019, Mr. Jarif’s basic salary falls on Tk. 10,200 in the scale of 9,600-200*12-
12,000. His date of yearly increment is on 21st March. He received two bonuses equivalent to
one month’s B.S, one received before the date of increment and another after increment. He
contributes 10% of B.S to recognized provident fund (RPF) from which he has also received
an interest of Tk. 1,500 @ 10% interest. He received technical allowance Tk. 8,000 per
month and medical allowance Tk. 3,500 per month. He has been provided a quarter with a
concessional rate for which Tk. 1,000 per month is deducted from his salary. However, the
annual rental value of that house is Tk. 75,000. He has been provided with a car for both
office and private use. In additional to it, he is also provided with Tk. 6,000 per month as
conveyance allowance. Driver’s salary of the full-time car Tk. 10,000 per month paid to his
driver’s bank account directly. The maintenance cost of the car during the year was Tk.
10,000 paid by him.
Company gave him international Air ticket for a tour as a part of his service contract for
which the company spent Tk. 35,000. He has received compensation for the termination of
Tk. 250,000. Bill paid for the membership of an international club by the company Tk.
25,000. He received Tk. 4,000 per month as a pension and gratuity for Tk. 120,000. Due to
family problem he received two month’s B.S as an advanced. He has been provided a special
allowance Tk. 6,000 for conducting office assignment but his actual expenses were Tk. 4,500.
He has been given Tk. 250,000 as a travel passage to Maldives with his spouse as per the
terms of employment. Company provides Tk. 10,000 to him during the year being the
reimbursement of various utilities bills of his house. His taxation income from other sources
was Tk. 230,000 during the income year. He was paid personal mobile phone bill paid by the
company @ Tk. 600 per month. His investments during the year were as follows:
 a. Purchase of share of a private limited company Tk. 10,000
b. Purchase of share of a partnership firm Tk. 25,000
c. Donation to Dhaka university and Dhaka hospital Tk. 120,000
d. Payment of owns and his wife’s insurance policy Tk. 1,200
e. Purchase of a laptop Tk. 56,000
f. Purchase of books and magazine Tk. 2,500

Required: Compute total taxable income of Mr. Jarif under the head of “Income from
Salary” Sec-21

Problem-2: From the following information compute the chargeable income under the head
of “income from interest on securities” for Mr. Maulif for the income year 2018-2019
I. Income from interest on tax free government securities Tk.30,000
II. 15% tax -exempt govt. securities to the extent of Tk.80,000
III. Income from interest on taxable govt. securities Tk. 20,000
IV. 12% less tax government securities to the extent of Tk. 60,000
V. Income from zero coupon bond Tk. 15,000
VI. Income from interest on debentures Tk. 16,000
VII. 13% taxable government securities to the extent of Tk.180,000 which were purchased
on 01/010/2016.
VIII. 12.5% approved commercial securities to the extent of Tk. 270,000 which were
purchased on 01/010/2018.
IX. The DCT identified that he has transferred 14% debenture of Tk. 240,000 to his close
friend on 15th June 2019(interest is paid on 30 th June on an annul basis) and bought it
back n 3rd July 2019 a Tk. 105,000. The DCT has identified the matter as Bond
washing.

The Bank has deducted Tk. 600 as commission for collecting interest on above government
securities. In addition to this, approved commercial securities were purchased by taking a
bank loan of Tk. 150,000@ 10% interest.

Problem-3
Transparent Company provides the following information about its production & sales:

Purchase of Raw materials Tk. 20,00,000 and Direct wages Tk.2,50,000

Administrative expenses Tk. 70,000 and Selling expenses Tk. 20,000

Depreciation of Machinery Tk. 30,000

The Company sells its products by adding 25% margin on cost. The opening and closing
stock of raw materials recorded at Tk. 50,000 and Tk. 40,000 respectively. Determine VAT if
the rate is 15% assuming that opening and closing stock of finished goods were Tk. 30,000
and Tk. 20,000 respectively.

Problem -4

Ms. Samiha is working as an assistant professor of a private university in Bangladesh. For

the assessment, her income of the year 2018-2019 is given bellow:
Income from Salary: On July, 2018, basic salary Tk. 35,400 in the scale of 30,000-1800*10-
61,800. Her date of yearly salary increment is on 25th January. She received Dearness
Allowance @ 15% of B.S. and Medical Allowance of Tk. 800 per month. She received two
business equivalents to one month’s basic salary –one received before and another after
increment. She contributes 10% of her basic salary to recognized provident fund. Her
employer also contributes the same. She has been provided with a quarter for which 10% B.S.
is deducted. She received interest on provident fund Tk. 6,400 at an interest rate of 16%. She
has been provided with a car for office and private use.
Income from securities: 8% tax free government securities Tk. 25,000; Interest on taxable
government securities Tk. 3,800; interest on zero coupon bond Tk. 22,000 and interest on
approved debenture Tk. 20,000.
Income from House Property: She has a six storied building. Each floor has two flats. All
flats of the house are let out at Tk. 20,000 per month except one where she is using it for her
residence. The Municipal value of the house is Tk. 28,00,000. Expenses of the house for the
year were as follows: Repair Tk. 350,000; Interest on H.B.F.C. Loan Tk. 45,000; city
corporation tax Tk. 24,000; caretaker & night guard salary Tk. 19,500; rent collection charges
of Tk. 4,500; legal expense Tk. 13,250; insurance premium for this year of the building Tk.
14,500; whitewash and painting of the building maintenance for water pump, etc. Tk. 6,000
and municipal taxes Tk. 5,400. The house remained vacant for two months during the year.
Uncollectible rent for one month. However, owner’s expense paid by the tenants Tk. 7,800.
Agriculture Income: Sale of Rice 240 maunds @ Tk. 950 per maund. Income from tea Tk.
100,000, income from lease of agricultural land Tk. 28,000 and Sale of Agri-products Tk.
400,000. She purchased a tractor by Tk. 250,000; paid land development tax Tk. 4,000 and
crops insurance Tk. 12,000. Income from sale of fish from pond Tk.68,000. Income from
ferry ghat Tk. 10,000. Income from sale of honey Tk. 4,500 and income from sale of Palm
juice Tk. 3,200. Allowable depreciation for this year Tk.12,000. Maintenance costs of
irrigation plant Tk. 4,500. Other costs of production: cost of seeds and fertilizer Tk. 55,000,
watering and & maintenance cost Tk. 22,000, Labor, other production costs Tk. 140,000 and
ordinary processing costs Tk. 13,200. However, she maintained proper books of accounts for
the agricultural income of this year.
Business Income: Income from sole-trader ship business Tk. 260,000; last year loss carried
forward Tk. 20,000 and loss on speculative business Tk. 25,000 for this year. Sale of machine
Tk. 24,000 and cost was Tk. 20,000 and book value was Tk. 16,000. Moreover, she has
speculative income in this year Tk. 12,000 from another source.
Partnership income: Share of profit of an unregistered partnership firm Tk. 120,000.
Income from husband’s and minor son’s property (they do not submit tax return):
Income from her husband’s property Tk. 80,000 and income from her minor son’s property
Tk. 35,000.
Capital gain: Capital gain Tk. 85,000.
Other income: Interest on Bank Deposit Tk. 18,000; Dividend income from public limited
company Tk. 9,000; Profit from Islami Bank Bangladesh Limited Tk. 9,000. Interest on bank
fixed deposit account Tk. 18,350, dividend received from private limited company Tk.
22,800, Prize of lottery Tk. 50,000. Interest on postal savings account Tk. 27,000. Income
from writing book Tk. 35,000. Income from sale of forest timber Tk. 12,000. Dividend
received from private limited company Tk. 72,000.
Foreign income: Income from foreign property Tk. 120,000 received through remittance and
interest on foreign bank’s deposit Tk. 25,000.
During the year she incurred expenses for: Insurance premium paid (Policy value Tk.
300,000) Tk. 35,000; purchased primary share of a listed company Tk. 20,000; Purchased
Law and academic books Tk. 5,000; Donated to Deposit pension Scheme per month Tk.
1,000; Paid to Government Zakat Fund Tk. 5,000; given zakat during Ramadan to the poor
people Tk. 23,750 and Purchased of savings certificate Tk. 40,000. He purchased share of a
company from primary market Tk. 7,500. He also purchases medical books for Tk. 12,000
during the year. He donated Tk. 32,500 to prime minister's relief fund; Tk.12,000 to his
relatives and Tk. 25,000 to Aga khan Development Foundation.
Required: Calculate her total taxable income, gross tax liability and net tax liability. Assume
that during the income year her total net asset amount is Tk. 7 crore.