Date of Evaluation: 05.06.

2021

AHSANULLAH UNIVERSITY OF SCIENCE AND TECHNOLOGY

School of Business
BBA Program
Semester Final Evaluation, Spring 2020
Year: 3rd Semester: 2nd
Course Number: BBA 321
Course Name: Taxation
Time: 3 (Three) hours Full Marks: 60
Use single answer script
Instructions: i) Answer script should be hand written and should be written in A4 whitepaper.
You must submit the hard copy of this answer script to the Department when the
university reopens.
ii) You must write the following information at the top page of each answer script:
Department: Program:
Course no: Course Title:
Examination: Semester (Session):
Student ID: Signature and Date:

iii) Write down Student ID, Course number and put your signature on top of every
single page of the answer script.
iv) Write down page number at the bottom of every page of the answer script.
v) Upload the scan copy of your answer script in PDF format through provided
google format the respective course site (i.e., google classroom) using
institutional email within the allocated time. Uploading clear and readable scan
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answer script. However, for clear and readable scan copy of the answer script
student should use only one side of a page for answering the questions.
vi) You must avoid plagiarism, maintain academic integrity, and ethics. You are
not allowed to take any help from another individual and if taken so can result in
stern disciplinary actions from the university authority.
vii) Marks allotted are indicated in the right margin.
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use graph papers where necessary.
ix) Assume any reasonable data if needed.
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The answer script (one single pdf file) must be uploaded at designated location in the provided google
form link available in the Google classroom.

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 [Answer any 4 (four) questions including question no. 6(six) out of the following 6 (six) questions.
Marks allotted are indicated on the margin.]

1. a. How would you evaluate the benefits of tax? 3

b. Why is residential status important to determine the tax liability? 4
c. “Income tax has its own features by which it is distinguishable from the other taxes”. 5
Justify this statement with appropriate characteristics.

2. a. How does excise duty play the vital role to control society? 4
b. “All giftsare not taxable under gift tax Act”. Justify the statement with due evidence. 4
c. How would you differentiate assessable and non-assessable income? 4
3 On June 2020, Ms. Tania Ali's basic salary falls on Tk. 56,000 in the scale of 40,000- 12
4,000 x8 -72,000. Her date of yearly increment is on 21st March. She received
dearness allowance @ 20% of basic salary and medical allowance Tk. 3,000 per
month. She received two festival bonuses and one performance bonus each equivalent
to one month's basic salary in the month of August, December and May respectively.
She contributes 10% of her basic salary to a recognized provident fund from which
she has also received an interest of Tk. 30,000 @ 15% interest. Her employer also
contributes the same amount to the RPF. She has been provided with 60% of her
basic salary as house rent allowance and a full-time car by the employer for office &
personal use. Company gave her international air ticket for a tour as a reward for her
performance in addition to her service contract for which the company spent Tk.
50,000. During the year she has also received an entertainment allowance of Tk.
10,000 of which Tk. 7,500 has actually been spent. She has also been provided with
telephone facilities at her office only. The bill for this telephone reimbursed by the
company amounted to Tk. 12,000. She has also received overtime bill of Tk. 22,000.
She has been provided one lunch in every week and the cost of each lunch was Tk.
145. She received arrear salary Tk. 40,000 and leave encashment Tk. 17,500.
Her investments during the year were: Purchase of secondary shares of public limited
company Tk. 10,000 and Donation to Anjuman Mufidul Islam Tk. 6,000.
Required: Compute her taxable income under the head of income from salary.

4. a. How is VAT helpful for the government and customers? What is the main difference 3
between VAT and turnover tax?
b. The following information has been taken from the accounting records of Apex Food
Limited for the year 2020.

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 Particulars Taka
Purchase of raw materials 790,000
Raw material inventory, January 1 180,000
Raw material inventory, December 31 160,000
Opening work- in- progress 160,000
Closing work- in -progress 120,000
Finished goods, Jan-1 260,000
Finished goods, Dec-31 310,000
Administrative expense 200,000
Materials return to supplier 10,000
Direct labor 390,000
Selling expenses 250,000
Manufacturing overhead 70% of direct labor
9
The company sells its product by adding 20% profit on cost.

Required: Calculate the amount of value addition and VAT if the rate is 15%.

5. a. Discuss the provision of annual value and repair & maintenance cost of rental 2
building.
b. Mr. Hossain is the owner of a Six-storied building at Malibagh. In each floor of the
building there are two flats. Mr. Hossain resides with his family in one floor
containing two flats. One flat of another floor is using by his son-in- law and paying
nothing for it. All other flats were let out for residential purpose at a monthly rent of
Tk. 20,000 per flat. During the year, the owner has borne the water and gas bill of the
tenants amounting to Tk. 30,000. The municipal value of the house is Tk. 3,000,000.
Expenses related to the house property for the year were: repair expenses Tk.
600,000; city corporation tax Tk. 42,000; caretaker & night guard salary Tk.
120,000; land revenue paid Tk. 9,000; mortgage interest paid Tk. 45,000; installation
of generator Tk.1,000,000. During the year one of the tenants in the ground floor left
the house without paying rent for one month. Mr. Hossain even after taking necessary
legal actions failed to collect this rent. However, advance received from the tenant
was Tk. 50,000 and refunded advance Tk. 25,000 to another tenant at the time of
leaving the house. Moreover, due to Covid pandemic one flat was vacant for two
months.
Required: Compute taxable income under the head of income from house property. 10

6 Mr. Islam is a gazette freedom fighter in Bangladesh and currently, he is working as

an associate professor at a private university in Bangladesh. For the assessment, his
income of the year 2019-2020 is given below:
Income from salary: on July, 2019, basic salary (B.S) Tk. 90,000 in the scale of

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78,000-4,000*10-118,000. His date of yearly salary increment is on 23rdJanuary. He
received medical allowance of Tk. 4,000 per month. He contributes 10% of his basic
salary to recognized provident fund. His employer also contributes the same. He has
been provided with a quarter for which 15% B.S. is deducted. He has been provided
conveyance allowance Tk. 5,500 per month.
Income from interest on securities:15% tax free govt. securities to the extent of
Tk.80,000. Income from interest on taxable govt. securities Tk. 9,500. 11.375%
taxable government securities to the extent of Tk. 160,000. Income from interest on
approved commercial securities(debenture) Tk. 19,000 and 15% commercial
debenture to the extent of Tk. 300,000.
Total taxable income from house property is Tk. 4,20,000.
Income from agriculture: He has agricultural income from the sale of paddy Tk.
82,000 and from the sale of jute Tk. 46,000. On the other hand, he has also received
Tk. 31,000 as a landlord. He did not keep proper accounts of cost of production but
has maintained proof of the following expenses: interest on borrowed capital Tk.
4,000; maintenance of irrigation work Tk. 6,000 and process cost Tk. 5,200. His other
income includes: income from rent of a building solely used for business purpose Tk.
4,200; income from rubber garden Tk. 32,000; income from the sale of honey Tk.
3,300; income from the sale of fishes from pond Tk. 14,000.
Income from business and profession: He is a Homeopathic practitioner and he
received Tk. 24,000 from this practice as visit fee; income from his departmental
store Tk. 90,000. Loss on fast food business Tk. 23,000. He has sold a car (which was
purchased very recently) by Tk. 340,000; cost Tk. 330,000 and book value Tk.
315,000. He has loss on speculative business of this year Tk. 3,700.
Income from Wife’s property (She does not submit tax return)Tk. 40,000.
His income from registered partnership firm during the year Tk. 100,000.
Other income: Dividend from a private limited company Tk. 18,000; interest on
savings account Tk. 2,700; prize of lottery Tk. 40,000; income from a private
university as a part-time lecturer Tk. 122,000; income from the remuneration of
director Tk. 114,000; and income from royalty Tk. 58,000 (there were no TDS).
He has foreign property from which he received Tk.90,000 as foreign income through
remittance.
During the year he incurred the following expenses:
During the year he spent Tk. 18,00,000 to purchase a flat in the Malibug area and the
source of Tk. 4,00,000 of that expenditure remained unexplained to the DCT.
Insurance premium- spouse (policy value Tk. 40,000) Tk. 4,500; Education expense
of son Tk. 4,000; Household expenses Tk. 18,000 per month; Donated to recognized
fund Tk. 15,000; Purchased of savings certificate Tk. 124,000; Purchased of company
10% debenture (1st time acquisition) Tk. 100,000; Donated to Sir Salimullah Muslim
Orphanage Tk. 5,000; Purchased share from an unlisted company Tk. 25,000;

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Purchased share of a listed company from Dhaka Stock Exchange Tk. 30,000, and
Advance payment for expenses Tk. 10,000.

Required: Calculate total taxable income, gross tax liability, and net tax liability of 24
Mr. Islam for the assessment year. Assume that during the income year his total net
asset amount was Tk.5.5 crore.

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