INCOME TAX ORDINANCE, 1984

Annual Value

According to Section 2(3)) of ITO 1984

Annual value for a let out property means:

i) the sum for which the property might reasonably be expected to let from year to year; or
ii) where the annual rent in respect of the property is in excess of the expected rent as referred to in
paragraph (i) above, the annual rent is the annual value.

Business Connection

In generally there should be a business in Bangladesh and a connection between the person sought to be taxed
and that business or person should have earned income from that connection.

According to Section 18(2) (a) of ITO 1984

Any income accruing or arising, whether directly or indirectly, through or from any business connection in
Bangladesh.

According to Section 104 of ITO 1984

Any business carried on between a resident and a non-resident, arranged in a manner that relevant transactions
produces to the resident either no profit or profit less than the ordinary profit is treated as business connection
by the DCT.

According to Rule 34 of ITR 1984

If the actual amount of income, profits or gains accruing or arising to any person residing out of Bangladesh
whether directly or indirectly through or from any business connection in Bangladesh or through or from any
property in Bangladesh or through or from any asset or source of income in Bangladesh in cash or in kind
cannot be ascertained, a reasonable percentage of the turnover so accruing or arising treated as income

Double Taxation Avoidance Agreement

According to Section 144 of ITO 1984

The Govt. of Bangladesh may enter into an agreement with the Govt. of any other country for the avoidance of
double taxation and the prevention of fiscal evasion with respect to taxes on income leviable under this
ordinance and under the corresponding law in force in that country.

Objectives of Double taxation agreement

a) Relief from the double tax payable

b) Determining the income accruing or arising, or deemed to be accruing or arising, to non-residents
from sources within Bangladesh
c) Where all the operations of business or profession are not carried on within Bangladesh, determining
the income attributable to operations carried on within or outside Bangladesh, or the income
chargeable to tax in Bangladesh in the hands of non-residents, including their agencies, branches or
establishments in Bangladesh
d) Determining the income to be attributable to any person resident in Bangladesh having any special
relationship with a non-resident
 e) Recovery of tax leviable
f) Exchange of information for the prevention of fiscal evasion
g) To attract FDI (Foreign Direct Investment) in Bangladesh

Expert Assessment/Best Judgment Assessment

According to Section 84 of ITO 1984

Where any person fails –

a) To file the return required by a notice under section 77
b) Has not filed a return or revised return under section 78
c) To comply with the requirements of a notice under section 79 – production of accounts and documents
d) To comply with the requirements of a notice under section 80 – statement of assets and liabilities and
life style
e) To comply with the requirements of a notice under section 83 (1) – notice for the production evidence
and supporting and for hearing.

The DCT shall, by an order in writing, assess the total income of the assessee to the best of his judgment and
determine the sum payable by the assessee on the basis of such assessment; and in the case of firm, may refuse
to register it or may cancel its registration if it is already registered, and communicate such order to the
assessee within 30 days next following.

The assessment under section 84 of ITO 1984 is commonly known as expert assessment.

An expert assessment shall be construed as misconduct of concerned DCT if the Board proves that the best
judgment assessment made by him/her shows lack of proper evaluation of legal and factual aspects of the
case, which has resulted in an arbitrary and injudicious assessment.

Perquisite
According to Section 2(45) of ITO 1984
1) Any payment made to an employee by an employer in the form of cash or in any other form excluding
basic salary, festival bonus, incentive bonus not exceeding 10% of disclosed profit of relevant income
year, arrear salary, advance salary, leave encashment or leave fare assistance and overtime, and
2) Any benefit, whether convertible into money or not, provided to an employee by an employer, called
by whatever name, other than contribution to a recognized provident fund, approved pension fund,
approved gratuity fund and approved superannuation fund.

Resident

According to Section 2(55) of ITO 1984

i) An individual is resident in Bangladesh if he remains in the income year in Bangladesh for a
period of or periods amounting in all to 182 days or more, or
ii) If he remains in Bangladesh in the income year for a period of or periods amounting in all to 90
days or more and he remained for a period of or periods amounting in all to 365 days or more
during the immediate 04 preceding years.
iii) A Hindu Undivided Family, firm or AOP is resident in the income year if its control and
management of affairs is situated wholly or partly in Bangladesh in the income year.
iv) A Bangladeshi company or any other company is resident in Bangladesh if the management of its
affairs is situated wholly in Bangladesh in the income year.
Tax audit
According to Section 83AAA of ITO 1984

Where the Board has reasonable cause to believe that the return or revised return filed by a company is
incorrect or incomplete, the Board may appoint a registered CA to examine the accounts of that assessee.

Key points:
1) The CA shall exercise the powers and functions of the DCT
2) The CA, after examination of the accounts, shall submit a report in writing to the Board along with
findings
3) On receipt of the report the Board shall forthwith forward the report to the concerned DCT for
consideration
4) On receipt of the report the DCT shall serve a notice for hearing
5) The DCT shall, after hearing the person appearing and considering the evidences by an order in
writing, assess within 30 days after the completion of hearing or consideration, as the case may be, the
total income of an assessee and shall determine the sum payable by the assessee within 30 days from
the date of such order.

Unabsorbed Depreciation

According to Section 42(6) & (7) of ITO 1984:

The amount of depreciation allowance of any year which cannot be absorbed due to the non-availability of
profits or gains chargeable for that year or such profits or gains being less than the allowance then, the
allowance or part of the allowance to which effect has not been given is treated as unabsorbed depreciation.
The amount of unabsorbed depreciation of any year shall be added to the amount of the allowance for
depreciation for the following year and be deemed to be part of that allowance or if there is no such allowance
for that year, be deemed to be the allowance for that year and so on for succeeding years,

When depreciation allowance is carried forward, then, it can be set off after giving effect of business loss and
speculation loss.

Written Down Value

According to Section 2(68) and 3rd Schedule para 11(15)

a) Where the assets were acquired in the income year, the actual cost thereof to the assessee;
b) Where the assets were acquired before the income year, the actual cost thereof to the assessee as
reduced by the aggregate of the allowance for depreciation allowed under ITO 1984 in respect of the
assessments for earlier year or years;

Charge of Income Tax: Section 16

Income tax is chargeable for each “Assessment Year” beginning on the 1 st day of July each year at any rate
or rates as provided by an act of Parliament and is payable in respect of the “total world income of the
income year” in the case of a resident or “total income” of the income year in the case of a non-resident.

Charge of Additional Tax: Section 16B

If a publicly traded company does not issue, declare or distribute dividend or bonus share equivalent to at
least 15% of its paid up capital within 06 months following any income year, it will be charged 5%
additional tax on undistributed profit in addition to tax payable under ITO.
Charge of Excess Profit Tax: Section 16C

If any banking company shows profit exceeding 50% of the aggregate sum of capital and reserves, the
company shall pay tax @ 15% of such excess. Such tax is payable in addition to the tax payable under
ITO, 1984

Income Deemed to Accrue or Arise within Bangladesh: Section 18

a) Bangladesh Connection: Any income accruing or arising directly or indirectly through or from any
business connection in Bangladesh; any property, asset, right or other source of income in Bangladesh
or transfer of capital assets in Bangladesh is deemed to be income accruing or arising in Bangladesh.
b) Salary: Any income classifiable as “salaries” irrespective of its place of payment shall be deemed to
be income accruing or arising in Bangladesh if it is earned in Bangladesh or if it is paid by the govt. or
a local authority in Bangladesh to a citizen of Bangladesh in the service of such govt. or authority.
c) Dividend: Any dividend paid outside Bangladesh by a Bangladeshi company.
d) Interest: Any income by way of interest payable by the govt. or by a resident person except where the
interest is payable in respect of any debt incurred or moneys borrowed and used in the business carried
on outside Bangladesh or for making or earning income from any source outside Bangladesh or by a
non-resident person in respect of any debt incurred or moneys borrowed and used in his business or
profession carried on in Bangladesh or for making or earning any income from any source in
Bangladesh.
e) Technical Fees: Any income by way of fees for technical services payable by the govt. or by a
resident person except where the fees are payable in respect of the services utilized in a business
outside Bangladesh or for making or earning income from any source outside Bangladesh or by a non-
resident person in respect of services utilized in his business or profession carried on in Bangladesh or
for making or earning any income from any source in Bangladesh.
f) Royalty: Any income by way of royalty payable by the govt. or by a resident person except where the
royalty is payable in respect of any right, property or information used or services utilized in a
business carried on outside Bangladesh or for making or earning income from any source outside
Bangladesh or by a non-resident person in respect of any right, property or information used or
services utilized for the purpose of his business or profession carried on in Bangladesh or for making
or earning any income from any source in Bangladesh.

Deemed Income: Section 19

1. Unexplained Cash Credit: Section 19(1)

2. Unrecorded Investments or Possession of bullion, jewellery etc: Section 19(2)
3. Unexplained Expenditure: Section 19(3)
4. Unrecorded Investments: Section 19(4)
5. Ownership of any money, bullion, etc: Section 19(5)
6. Income received from discontinued business: Section 19(6)
7. Receipt of Dividend: Section 19(7)
8. Difference between the purchase price and the fair market value: Sect 19(8)
9. Salami or Premium: Section 19(9)
10. Goodwill, Compensation or Damages etc: Section 19(10)
11. Cancellation of indebtedness: Section 19(11)
12. Managing Agency Commission: Section 19 (12)
13. Lotteries, Crossword Puzzles etc: Section 19(13)
14. Income from Insurance business: Section 19(14)
 15. Receipt back of loss, bad debt or expenditure and unpaid trading liability etc: Section 19(15)
16. Income from Sale of Depreciated Assets having been used for the purpose of any business or
profession: Section 19(16)
17. Income from Sale of Depreciated Assets having been used for agricultural purpose: Section 19(17)
18. Income from receipt of insurance, salvage or compensation moneys in respect of assets having
been used for the purpose of any business or profession: Section 19(18)
19. Income from receipt of insurance, salvage or compensation moneys in respect of assets used in
agriculture: Section 19(19)
20. Income from sale of asset of capital nature: Section 19(20)
21. Unpaid Loan: Section 19(21) exceeding Taka 50,000 and 03 years
22. Un-adjustable security money taken from tenant: Section 19(22)
23. Income from transfer of export quota by garment industry: Section 19(23)
24. Investment by a private limited company or a public limited company in its equity received from
shareholder or director not being received by cross cheque: Section 19(24)
25. Exemption in respect of investment: Section 19AAA

Income from Salary: Section 21

Valuation of perquisites, Allowances, Benefits includible as income in the case of salaried person: Rule 33

B. House Rent Allowance Receivable in Cash: Rule 33A

Exempted upto 50% of Basic Salary
Or Whichever is lower
Taka 15,000 per month/Taka 180,000

C. Rent Free Accommodation: Rule 33B

1. if rent free accommodation, included in his income

Rental value of accommodation

Or whichever is less
25% of Basic Salary

2. if at concessional rate, the difference between the rent actually paid and the amount determined shall be
included in his income.

D. Conveyance Allowance receivable in cash with no conveyance facility: Rule 33C

Exemption up to Taka 24,000

E. Conveyance provided exclusively for personal or private use: Rule 33D

An amount equal to 7.5% of Basic salary shall be included in the employees income.

F. Additional Conveyance Allowance: Rule 33E

The whole amount shall be included in his income.

G. Free or Concessional Passage for Travel Abroad or within Bangladesh: Rule 33G

1. if it is in accordance with the TOE, Amount receipt minus Actual expense shall be included.
2. if it is not in accordance with the TOE, the whole amount shall be included.
But subject to not more than once in two years

H. Entertainment Allowance: Rule 33H

The whole amount shall be included in his income.

I. Medical Expenses: Rule 33 I

Amount receipt minus Actual expenditure shall be included in his income.

J. Other Benefits: Rule 33 J

The whole amount shall be included in his income

Income from Interest on Securities: Section 22 and 23

1. Interest receivable by the assessee on any security of the govt.; or any security approved by the govt.
2. Interest receivable by him on debentures or other securities of money issued by or on behalf of a local
authority or a company.

Deductions: Section 23

1. Commission or charges deducted from interest by a bank realizing the interest on behalf of the
assessee;
2. Interest payable on money borrowed for the purpose of investment in the securities.

Income from House Property: Section 24 and 25

Income from house property whether used for commercial or residential purposes is taxable on the basis of its
annual value.
Where the property is owned by two or more persons and their respective shares are definite and ascertainable,
the owners are assessable on their respective share of income from the property and not as an association of
persons.

Deductions Allowable: Section 25

1. In respect of expenditure for repairs, collection of rent, water and swerage, electricity and salary of
darwan guard, pumpman, liftman and caretaker and all other expenditures related to maintenance and
provision of basic services:
a) an amount equal to 25% of the annual value of the property where the property is used for
residential purpose;
b) an amount equal to 30% of the annual value of the property where the property is used for
commercial purpose;

2. Any premium paid to insure the property against risk of damage or destruction
3. Interest on mortgage or other capital charge for the purpose of reconstruction, extension or
improvement of the house property.
4. Any tax not being a capital charge leviable on an annual basis.
5. Ground Rent
6. Any sum payable to govt. as land development tax or rent on account of the land comprised in the
property
 7. Interest payable on capital borrowed for the purpose of acquisition, construction, reconstruction, repair
or renovation of the house property; provided that where the property or a portion thereof is self
occupied and acquired, constructed, renewed or reconstructed with borrowed capital, the amount of
any interest, payable on such borrowed capital not exceeding taka 20 Lacs, shall be deducted from
total income.
8. Proportionate vacancy allowance of the period for which the property remains wholly unoccupied.
9. Interest payable during construction period when no income is earned from the house will be allowed
in three equal installments in the first three subsequent years during which income from the said
property is assessable.

Agricultural Income: Section 26 and 27

Allowable Deductions: Section 27

1. Any land development tax or rent paid in respect of the land used for agricultural purpose.
2. Any tax, local rate or cess paid in respect of such land.
3. Interest paid in respect of mortgage or charge.
4. Any sum paid in respect of the maintenance of any irrigation or protective work or other capital assets
5. Depreciation
6. Any sum paid as premium in order to effect any insurance against loss of, or damage to, such land or
any crops to be raised or cattle to be reared thereon.
7. Any expenditure incurred in cultivating such land or raising livestock thereon.
8. Any expenditure incurred in performing any process for rendering the produce of such land fit to be
taken to market.
9. Any expenditure incurred in transporting such produce or livestock to market.
10. Any expenditure incurred in maintaining agricultural implements and machinery in good repair and in
providing for the upkeep of cattle for the purpose of such cultivation, process, or transport.
11. Any interest paid in respect of capital borrowed for the purpose of acquisition, reclamation and
improvement of such land.
12. Where no books of account have been maintained, deduction for cost of production shall be an amount
equal to 60% of the market value of the produce of the land, instead of clauses 7, 8, 9, and 10
13. Where the agricultural income is derived according to the local borga or bhag or adhi system, no
allowances under the above clause 7,8,9,10 shall be admissible and in all such cases the cost of
production shall be limited to the share of bargadar or bhagchasi according to the local borga or bhag
or adhi system as the case may be.
14. In respect of any machinery of plant used exclusively for agricultural purposes which has been sold,
transferred by way of exchange, acquired, discarded, demolished or destroyed in the previous year, the
loss on sale of such plant and machinery will also be allowed subject to certain conditions as provided
for in the Ordinance.
15. Any expenditure not being in the nature of capital or personal expenditure, laid out wholly and
exclusively for the purpose of deriving such income from such land.

Income from Tea or Rubber Garden

1. 40% of the income derived from sale will be assessed as business income; and
2. Remaining 60% as agricultural income.

Board may prescribe manner for computation of Agricultural income from sale of Tobacco, Sugar or any other
produce grown and manufactured by the assessee.

Income from Business or Profession: Section 28 (1), (2) and (3)

 1. Profits and gains of any business or profession
2. Income of trade or professional association derived on account of specific services performed for its
members.
3. Value of any benefit or perquisite arising from business or exercise of profession
4. Receipt back of loss, bad debt or expenditure and unpaid trading liability as referred to in section
19(15)
5. Income from sale of depreciated asset as referred to in section 19(16)
6. Income from receipt of insurance, salvage or compensation moneys as referred to in section 19(18)
7. Income from sale of asset of capital nature as referred to in section 19(20)
8. Income from transfer of export quota as referred to in section 19(23)

Allowable Deductions: Section 29(1)

1. Rent for the business premises

2. Repairs to hired business premises
3. Bank interest paid or any profit shared with a bank run on Islamic principles in respect of capital
borrowed.
4. Share of profit paid by a bank run on Islamic principles
5. An amount not exceeding 5% of the profit transferred to Special Reserve by financial institutions
approved by the Govt.
6. Repairs to own buildings, plants, machinery, furniture etc.
7. Insurance premium for insurance against risk of damage etc. of buildings plant etc used in business or
profession
8. Depreciation of building, machinery, plant or furniture being owned by the assessee and used for
business or profession.
9. Investment allowance for a passenger vessel or a fishing trawler, which is entitled to special
depreciation is allowable at 20% of the original cost subject to stipulated conditions.
10. Obsolescence allowance for building, machinery or plant, which has been discarded, demolished or
destroyed, under the stated circumstance and to the prescribed extent.
11. Obsolescence allowance and allowance on account of death or useless animals
12. Land development tax or rent, local rate etc
13. Bonus paid to employees including festival bonus
14. The amount of bad debt, which is established to have become irrecoverable, under certain
circumstances
15. The amount of bad debt written off as irrecoverable but deduction not allowed on the ground that it
was not then irrecoverable, the amount which was established to be irrecoverable.
16. The amount of bad debt having been irrecoverable in an earlier year, is allowable for the earlier year
under the stated circumstances and with the consent of the assessee.
17. Provision for bad and doubtful debt by BSB, BSRS upto 5% of overdue loan or the amount of actual
provisions or such debt, whichever is less.
18. Provision for bad and doubtful debt and interest thereon made by a commercial bank including BKB,
Karmasangsthan Bank and the RAKUB of a sum equal to 1% of the outstanding loan including
interest thereon or the amount of actual provision, whichever is less.
19. Any expenditure, not being capital expenditure, laid out or expended on scientific research related to
the business.
20. Any expenditure of a capital nature laid out or expended on scientific research related to the business
subject to the stipulated conditions.
21. Any sum paid to scientific research institute etc. subject to the stipulated conditions.
22. Any sum, not being of capital nature laid out or expended on any educational institute or hospital
established for the benefit of employees subject to the stipulated condition.
23. Expenditure (including capital expenditure) incurred on any educational institute or hospital
established for the benefit of employees and their dependents is deductible provided no charge is made
 for the services rendered by such hospital or institute. Expenditure incurred on the construction,
maintenance or running of any institute for the training of industrial workers will be similar
deductible.
24. Any expenditure laid out or expended on the training of citizens of Bangladesh in connection, with a
scheme approved by the NBR
25. Expenses incurred in connection with visits abroad in a Trade Delegation sponsored by Govt.
26. Subscription paid to registered trade organization.
27. Any expenditure, not being in the nature of capital expenditure or personal expense for the assessee
laid out or expended wholly or exclusively for the purpose of the business or profession of the
assessee.
28. Allowance in respect of expenditure on publicity and advertisement.
29. Any allowance in respect of expenditure on entertainment not in excess of the amount prescribed in
this behalf. Ceiling of admissible expenditure has been prescribed in Rule 65 of ITR, 1984

a) On the first Taka 10,00,000 of income from business or profession 4%

b) On the balance income 2%

30. Foreign travel expenses for holidaying and recreation incurred by business houses on account of their
employees and their dependents not exceeding the amount prescribed in this behalf under Rule 65A of the
ITR, 1984. The amount has been restricted upto 3 months’ basic salary or 3/4 th of the actual expenditure
whichever is less, not oftener than once in every 2 years.

30. Allowable expenditure on distribution of Free Sample: Rule 65C

a) In respect of industries other than pharmaceutical industries:

i)Turnover up to Taka 5 Crore 1.5%
ii) Turnover exceeding Taka 5 Crore but not exceeding Taka 10 Crore 0.75%
iii) Turnover exceeding Taka 10 Crore 0.375%

b) In respect of pharmaceutical industries:

i)Turnover up to Taka 5 Crore 2%
ii) Turnover exceeding Taka 5 Crore but not exceeding Taka 10 Crore 1%
iii) Turnover exceeding Taka 10 Crore 0.50%

Deduction Allowable proportionately 29(2)

Where any premises, building, machinery, plant is not wholly used for business or profession, any deduction
allowable under this section will be allowed proportionately.

Deductions not allowable in respect of the following: 4 th proviso to Section 29(1) (xviiiaaa)

1. In respect of provision for bad and doubtful debt and interest thereon made by a commercial bank
including the BKB, Karmasangsthan Bank, RAKUB, a sum equal to 1% of total outstanding loan
including interest thereon or the amount of actual provision for such bad or doubtful debt and interest
thereon in the books of the assessee whichever is less.
2. Any amount representing grant allowed by the Govt. in the form of 15 year Special Treasury Bonds.
3. Any loan advanced to any govt. organization, body corporate etc. or any other loan guaranteed by the
govt.
4. Any debt representing loans advanced to any director of the bank, his nominees or dependants.
Deductions not admissible in certain circumstances: Section 30

a) Payment of salaries if tax is not deducted at the time of payment and paid thereon in accordance with
the section 50 of Chapter VII
aa) Any payment made by an assessee to any person if tax thereon has not been deducted and credited in
accordance with Chapter VII and VAT thereon has not been collected or deducted and credited in
accordance with the VAT Act, 1991
b) Payment of interest, salary, commission or remuneration by a firm or an association of persons to any
partner of the firm or any member of the association as the case may be
c) Brokerage or commission paid to a non-resident if tax has not been deducted therefrom under section
56
d) Payment to a provident or other fund unless effective arrangement has been made for deduction of tax
at source while making the payments from the fund which are taxable under the head “salaries”
e) So much of the expenditure by an assessee on the provision of perquisites, as defined in clause 2(45)
to any employee as exceeds Taka 2 Lacs.
f) The amount of expenditure in excess of the prescribed rates, and as is not, in the case of sales and
services liable to excise duty, supported by excise stamp or seal in respect of the following items:

i)Entertainment: Rule 65
ii) Foreign travels of employees and their dependants for holidaying and recreation: Rule 65A
iii) Distribution of free samples: Rule 65C

Provision for disallowance: Section 30A

The DCT shall not make any disallowance or deduction for any year claim of the assessee in the trading
account or profit and loss account without specifying reason for such disallowance or deduction.

Capital Gains: Section 31 and 32

i) Determination of income
Any gains arising from transfer of a capital asset (both movable and immovable) is chargeable to income tax in
accordance with the 2nd schedule of the ITO 1984 which prescribes rates of income tax in certain special cases.

In determining the gains on transfer, any expenditure incurred solely in connection with the transfer of the
capital asset and its cost of acquisition including expenditure, if any, incurred for improvement of the asset are
deductible from the sale value.

ii) Fair Market Value: Section 2(30), 32(3) & (4)

Fair market value means, in relation to a capital asset the price which an asset would ordinarily fetch on sale in
the open market. If such price is not ascertainable, the price which the DCT may determine with the prior
approval of the IJCT

iii) Exemption of Capital Gains from tax

Capital gains or portion thereof arising out of transfer of certain capital assets are exempt from the income tax
under certain circumstances and upon fulfillment of certain conditions. Followings are the cases of full or
partial exemption:

1. Transfer of capital asset used in the business: Section 32(5)

A capital gain arising from transfer of a capital asset which immediately before the date on which transfer
took place was being used by the assessee for the purposes of his business or profession shall be exempt
from payment of the income tax upto the extent as indicated below and upon fulfillment of the conditions
mentioned below:
 a) A new capital asset for the purposes of his business or profession has to be purchased within a period
of one year before or after the date of transfer
b) The declaration shall have to be filed for exemption before the assessment is made
c) When the capital gain is greater than the cost of the new asset, the capital gain upto the extent of cost
of acquisition of the new asset shall be exempt and the balance shall be charged to tax. In determining
the depreciation on such asset, cost shall be taken to be nil.
d) When the capital gain is equal to or less than the cost of the new asset, no tax shall be charged on the
capital gain
In determining the depreciation or the profit on disposal of depreciated asset, or the capital gain on its transfer
the cost of acquisition shall be reduced by the amount of the capital gain.
The time limit for purchase of the new asset can be extended by the DCT with the prior approval of the IJCT

2. Transfer of govt. securities: Section 32(7)

Capital gain which arises from transfer of govt. securities and stocks and shares of public companies listed
with a stock exchange in Bangladesh is exempt from tax.

3. Transfer of buildings and lands to a new company: Section 32(10)

When buildings and lands are transferred to a new company for setting up an industry and the whole amount
of capital gain arising out of such transfer is invested in the equity of the said company, the capital gain shall
not be charged to tax as income of the year of transfer.

4. Transfer of capital asset of a firm to a new company: Section 32(11)

When capital gain arises from the transfer of capital asset of a firm to a new company registered under CA
1994 and the whole amount of capital gain is invested in the equity of the said company by the partner of the
firm, then the capital gain shall not be charged to tax as income of the year of transfer.

5. Transfer of stocks and shares of a public company by a non-resident: Proviso to Section 31

Capital gains which arises to an assessee, being a non-resident from the transfer of stocks or shares of a public
company as defined in the CA 1994 is exempt from tax provided such assessee is entitled to similar exemption
in the country in which he is a resident.

Income from Other Sources: Section 33

This is the residuary head of income as mentioned in section 20 of the ITO 1984

The following income of an assessee is assessable under the above head:

1. Dividend and interest

2. Royalties and fees for technical services
3. Income from letting of machinery, plant or furniture and also of buildings if letting of buildings is
inseparable from the letting of the machinery, plant or furniture.
4. Deemed income under section 19(1), (2), (3), (4), (5), (8), (9), (10), (11), (12), (13), or (21),
(21A), or (24) applies
5. Income of any kind or from any source which is not classifiable under any of the other heads
specified in section 20

Deductions: Section 34

1. Interest paid on money borrowed for the purpose of acquisition of shares of a company.
2. Any expenditure not being capital expenditure or personal expenses spent solely for the purpose of
making or earning the relevant income.
3. Allowance for repairs, insurance premium, depreciation and obsolescence allowance.
Maintenance of Accounts: Section 35

An assessee shall compute income from agriculture, business or profession and from other sources in
accordance with the method of accounting regularly followed by him.

The NBR may however prescribe manner and form of maintenance of accounts and other documents and the
assessee shall maintain the accounts accordingly and thereupon the income of the assessee shall be computed
on the basis of the accounts maintained.

Every PLC or PVT company shall furnish with the return copy of trading, profit and loss account and the
balance sheet certified by a CA.

If the DCt finds that income of the assessee cannot be determined from the accounts maintained by the
assessee or where the assessee has not maintained the books of accounts and documents in the manners and
forms as prescribed by the NBR or as assessee fails to comply with the requirements in regard to the filing of
audited accounts, the DCT may determine the income on such basis and in such manner as he thinks fit.

Set Off Losses: Section 37

Wherever an assessee sustains a loss in any year under any head of income, he is entitled to set off the loss so
sustained against his income, profits or gains under any other head in that year. Provided that any loss in
respect of any speculation business or any loss under capital gains or any loss from any other source, income
of which is exempted from tax shall not be so set off.

Receipt of cash subsidy from the govt.: Section 37 – Second proviso

When an assessee receives any subsidy in cash from the govt. in any year, the amount of subsidy shall be
deducted in computing the net loss of the assessee in that year.

Carry forward of loss from business: Section 38

Whenever an assessee sustains any loss under the head “Business or Profession” and the loss cannot wholly be
set-off against under any other head, such unadjusted loss shall be carried forward to the following year to be
set-off against the profits and gains of the same business or profession. Loss cannot be carried forward for
more than 6 successive assessment years.

Carry forward of loss in speculation business: Section 39

Loss from speculation business, which cannot be set-off during the year against income from any other
speculation business, can be carried forward to the next following year and set-off against income from any
speculation business in the said following year. If the loss cannot be wholly set-off, it can be carried forward to
the next year and so on, restricted upto 6 successive years.
Carry forward of loss under the head “Capital Gains”: Section 40

Loss under the head “Capital Gains” can be set-off against income from the same head during the income year.
If the loss cannot be set-off in the above manner, the loss or portion thereof can be carried forward to the next
assessment year and set-off against income under the same head in that year restricted upto 6 successive
assessment years.

Loss upto Taka 5,000 cannot be carried forward. Amount in excess of Taka 5,000 can pnly be carried forward
and set-off in the aforesaid manner.
Loss of Agricultural Income: Section 41
Where any assessee sustains a loss of profit or gains in any year under the head “Agricultural Income” and the
loss cannot be wholly set-off under section 37, the loss or portion thereof where the assessee has no income
under any other head, shall be carried forward to the following year and set-off against the profits and gains, if
any, of such agricultural income and if the loss in either case cannot be wholly set-off, the amount of loss not
so set-off, shall be carried forward to the next year and so on but not more than 6 years.
Set-off of loss in the case of succession in business: Section: 42
In case of succession in business otherwise than by inheritance, the person succeeding in the business shall not
be entitled to set – off the loss of the person succeeded. In the case of change in constitution of firm, the firm
shall not be entitled to set-off the proportionate share of loss of the retired or deceased partner. A partner of the
firm shall also not be entitled to the benefit of such loss.

Carry forward of depreciation allowance: Section 42(6)

Depreciation allowance which cannot be given full effect of, in any year, because of there being no profits or
of inadequate profits, unadjusted allowances or portion thereof as the case may be, shall be carried forward to
the next year or years and be part of allowance for that year.

While setting-off loss on account of depreciation allowance, effect shall first be given to business loss
including loss from speculation business.

Section 46B Exemption from tax of newly established industrial undertakings: Newly insertion by FA
2008
Exemption from tax of newly established industrial undertakings set-up between the period of July, 2008 to
June, 2011 and at the rate specified below:
a) If the said undertaking is set-up in Dhaka and Chittagong divisions, excluding hill districts of Rangamati,
Bandarban and Khagrachari for a period of five years beginning with the month of commencement of
commercial production or operation of the said undertaking:

Period of Exemption Rate of Exemption

For the first two years (1st & 2nd Years) 100% of income

For the next two years (3rd & 4th Years) 50% of income

For the last one year (5th Year) 25% of income

b) If the said undertaking is set-up in Rajshahi, Khulna, Sylhet and Barisal divisions and the hill districts of
Rangamati, Bandarban and Khagrachari for a period of seven years beginning with the month of
commencement of commercial production or operation of the said undertaking:

Period of Exemption Rate of Exemption

For the first three years (1st , 2nd 3rd Years) 100% of income

For the next three years (4th, 5th & 6th Years) 50% of income

For the last one year (7th Year) 25% of income

Depreciation Allowance on Assets used in Business or Profession: Section 29(1) (viii) & (ix)

In computing the profits and gains from business or profession, allowance is admissible for depreciation on
building, machinery, plant, furniture owned by the assessee and used for the purpose of his business or
profession. Different categories of depreciation allowable to an assessee carrying on business or profession are
as following:

a) Normal depreciation allowance

b) Accelerated depreciation allowance
c) Accelerated depreciation allowance for expansion unit of undertaking
d) Special depreciation allowance
e) Initial depreciation allowance

a) Normal Depreciation Allowance (Paragraph 3 of 3rd Schedule)

Sl No. Class of Asset Rate

1. 1. Building – General 10%
2. Factory Building 20%
2. Furniture and Fittings 10%
3. Machinery & Plant:
1. General Rate 20%
2. Special Rates
a) Ships-
i) Ocean-Going Ships- New 12%
ii) Ocean- Going Ships – Second hand age at purchase date
a) Less than 10Years 12%
b) 10 Years or more 24%
b) i)Batteries, X-Ray and electric therapeutic apparatus 20%
ii)Machinery used in production 20%
iii)Motor Vehicles, not plying for hire 20%
iv) Motor Vehicles, plying for hire 24%
v) Computer and Computer Equipment 30%
c) i) Professional Reference Books 30%
ii) Aircraft, aero-engines and aerial photographic apparatus 30%
iii) Moulds used in the Manufacture of glass or plastic goods 30%
d) Mineral Oil Concerns
i) Below ground installations 100%
ii) Above ground installations 30%

In case of motor vehicles, being passenger vehicles or sedan cars, not plying for hire, cost for the purpose of
depreciation is restricted to Taka 10,00,000
No allowance under this paragraph shall be made for a leasing company or such machinery, plant, vehicles or
furniture given to any lessee on financial lease.
b) Accelerated Depreciation Allowance (Paragraph 7 of 3rd Schedule)

Depreciation will be allowed as follows, namely-

a) For the 1st year 50%
b) For the 2nd year 30%
c) For the 3rd year 20%
C) Accelerated Depreciation Allowance for Expansion Unit of an undertaking (Paragraph 7A of 3 rd
Schedule)

a) For the 1st year 80%

b) For the 2nd year 20%

D) Special Depreciation Allowance on Ships (Paragraph 8 of the 3rd Schedule)

a) For the 1st year 40%

b) For the 2nd year 30%
c) For the 3rd year 30%

E) Initial Depreciation Allowance (Paragraph 5A of 3rd Schedule)

Depreciation on building, machinery and plant built/introduced as the case may be after 30.06.2002 in the year
of construction or installation or use or commencement of commercial production whichever is later. Its rate
will be 10% for building and 25% for plant and machinery
Deduction or Collection of Tax at Source: Sections 48 and 49

Income tax payable is deductible or collectible at source in respect of certain specific items of income. The tax
deducted or collected at source is part of income of an assessee and is treated as payment of tax in due time.
The specified items of income are the following:

No. Heads Section/Rule Rate Chalan in the

name of

1 Salaries Respective
Section 50 deduction at average rate
Zone

2 Discount on the real value of deduction at normal rate or LTU

Bangladesh Bank Bills Section 50A maximum rate whichever is
greater.
Section 51
3 Interest on securities LTU
10%on interest or discount

nil up to 1 lac,
 4 Supply of goods and Zone-2
execution of contracts and 1-5 lacs (1%), (Partly) &
sub-contracts Section 52(Rule 16) LTU
5-15 lacs (2.5%),
& 82(C)
15-25 lacs 3.5% and

25 lacs and above (4%)

Upto Taka 2 lacs nil
In case of oil supplied by oil Not 82 (c)
marketing companies Exceeding Taka 2 lacs 0.75%
5 Indenting commission / Section 52 3.5% of the total receipt of Zone-2
Shipping agency indenting commission & 5% of
commission (Rule 17) total Shipping agency
commission receipt

6  Royalty, Fees for Zone-8

professional or technical Section  52 A 10% of the fees
services

7 Stevedoring agency & Ctg. Zone-2

Section  52 AA 7.5% of the fees
Security service

8 C & F agency commission Section  52 AAA 7.5% of the fees Zone-2

Section 52B
9 Sale of bandrolls ( for biri) Respective
6% of the value of bandrolls.
& 82 (c) Zone

10 Compensation for Zone-2

Section 52C 6% of the compensation money
acquisition of property
Section 52D
11 Interest on saving 10% of the amount of interest  Zone-2
instruments & Not 82 ( c ) (Current rate)

12 Collection of tax from brick 1 Sec. = Tk.10,000/ for each Respective

manufacturers brick field. Zone
1.5 Sec. = Tk.12,000/ for each
Section 5`F
brick field.
2 Sec. = Tk.18,000/ for each
brick field.

13 Commission on Letter of 5% of the amount of LTU

Section 52 I
Credits commission.

14 Issuing & Renewal of trade Tk 500/- For renewal of each Zone-3

Section 52K
licence Lincence
Section 52L
15 Trustee fees  
10%

16 Frieght Forward agency  

Section 52M 7.5%
Com.
Section 52N
17 Rental power  
4%
 Section 53
18 Import of goods (Rule17A) Zone-2
3% of the value of imports.
& 82 ( c )

19 Income from house property No deduction if monthly rent is Zone-2 Dha

(house rent) below 20,000/- & Other
Section 53A 3% (if monthly rent is 20,000- outside Zone
(Rule17B) 40,000 Tk.) and
5% (if monthly rent is above
40,000 Tk.)
Section 53AA
20 Shipping business of Zone-2,ctg
5% of freight
resident & 82 ( c )

21 Export of manpower Section 53B (Rule Zone-2,   dhk

10% of the service charges.
17C) & ctg
Section 53BB
22 Export of Knitwear Zone-5
0.25%
& 82 ( c )

23 Member of Stock Exchange Section 53BBB 0.015% Zone-7

24 Export of goods except Zone-5

Knitweare & Woven Section 53BBBB 0.25%
garments
Section 53C
25 Sale of goods by public Zone-2
auction (Rule 17D)
5% of the sale price
& 82 ( c )
Section 53CC
26 Courier Service (Non- Zone-6
7.5%
resident) & 82 ( C )

27 Payment to film actors and 5% of the amount paid  Zone-2

Section 53D (Rule
actresses exceeding 
17E)
Tk. 36000/-
Section 53DD
28 Cash subsidy Zone-5
5%
& 82 ( C )

29 Commission Fees or Section 53E (Rule 7.5% of the amount of Zone-2  &
discount paid to distributors 17G) commission. LTU

30 Commission or charges paid Section 53EE 4 % on the amount of Dhk.Zone-6,

to the agents of foreign commission or charges. Ctg.Zone-3
buyers and Zone of
 Respective
Division
Interest on bank deposits
31 Section 53F (Rule Zone-1
10% of the amount of interest.
17H)

32 Real Estate & Developers Section 53FF In case of Bldg. 250 per sq. Zone-5
meter
& 82 ( C ) In case of land  5% of deed
value
Section 53G
33 Insurance commission 3% on the amount of LTU
& 82 ( C ) commission

34 Commission paid to the Section 53GG Dhk.Zone-2,

Surveyors of General Ctg.Zone-3
7.5% on the amount of
Insurances and Zone of
& 82 ( C ) commission.
Respective
Division

35 Transfer of property Section 53H (Rule Survey Zone

5% of the value of the property.
17I)
Section 53I
  Interest on Post Office Zone-2
Savings Bank Account No deduction if the amount of
interest does not exceeds
Tk.1,50,000  and if exceeds then
10% on the amount of   interest 
.

Zone-2
36 Rent of vacant land, plant No deduction if monthly rent is
and machinery below 15,000/-  
Section 53J (Rule 3% (if monthly rent is 15,000
17BB) -30,000 Tk.) and
5% (if monthly rent is above
30,000 Tk.)

 37 Advertising  bill of news Zone-5

paper, magazine, private Section 53K 3% of the value of the property.
television channel

38 Dividend LTU (only

(1) Resident individual 10%,
LTU’s files)
Section 54 non-resident individual 25% (2)
all others
Company 20%
Zone-2
Section 55
39 Income from lottery 20% of the amount won. Zone-2
 &

82(C)

40 Income of non-resident  Company - rate applicable to the Zone-6

Other than  non-resident Section 56 com. Other than company -
Bangladeshi} maximum rate 25%

Major areas for final settlement of tax liability : 82 (C)

Tax deducted at source for the following cases is treated as final discharge of tax liabilities. No additional tax
is charged or refund is allowed in the following cases:-

 Supply or contract work

 Band rolls of hand made cigarettes
 Import of goods
 Transfer of properties
 Export of manpower
 Real Estate Business
 Export value of garments
 Local shipping business
 Royalty, technical know-how fee
 Insurance agent commission.
 Auction purchase
 Payment on account of survey by surveyor of a general insurance company
 Clearing & forwarding agency commission.
 Transaction by a member of a Stock Exchange.
 Courier business
 Export cash subsidy

Advance Payment of Tax: Section 64,65,66,67,68,69,70,71,72 and 73

Advance tax is payable by an assessee during each financial year if the latest assessed income exceeds Taka 3
Lacs.

Advance tax is payable in four equal installments on 15 th September, 15th December, 15th March and 15th June.
If one estimates that one’s income during any financial year will be less than the last assessed income, one
may submit an estimate of income of one’s own and pay the advance tax accordingly. While preparing the
estimate, one must take sufficient care that the tax paid on the basis of the estimate does not fall short of 75%
of the tax payable on regular assessment. Because, if the tax paid falls short, he is liable for interest.

If an assessee fails to pay any installment of advance tax, he will be deemed to be an assessee in default.
Penalty may be imposed for such default.
Where payment of advance tax by a new assessee or by an old assessee on the basis of his own estimate, falls
short of 75% of the tax payable on the basis of regular assessment, interest at the rate of 10% is leviable on the
amount by which the tax paid together with the tax deducted at source if any, falls short of 75% of the assessed
tax. The interest is leviable for the period from 1 st day of July of the relevant financial year to the date of
regular assessment or for a period of two years from the aforesaid 1 st day of July, whichever is shorter.

An assessee, on the other hand is entitled to simple interest at 10% per annum on the amount by which
aggregate sum of advance tax paid in any financial year exceeds the amount of tax payable by him on the basis
of regular assessment. Interest is payable for the period from 1 st day of July of the assessment year to the date
of regular assessment or a period of two years from the said 1 st day of July, whichever is short.

Return of Income and Statements

Return of Income: Section 75, 77, 78 and 80

Who should submit Income Tax Return ?

 If total income of any individual other than female taxpayers, senior taxpayers of 70 years and above
and retarded taxpayers during the income year exceeds Tk 1,65,000/-.
 If total income of any female taxpayer, senior taxpayer of 70 years and above and retarded taxpayer
during the income year exceeds Tk 1,80,000/-.
 If any person was assessed for tax during any of the 3 years immediately preceding the income year.
 A person who lives in any city corporation/paurashava/divisional HQ/district HQ and owns a building
of more than one storey and having plinth area exceeding 1,600 sq. feet/owns motor car/owns
membership of a club registered under VAT Law.
 If any person subscribes a telephone.
 If any person runs a business or profession having trade license.
 Any professional registered as doctor, lawyer, income tax practitioner, Chartered Accountant, Cost &
Management Accountant, Engineer, Architect and Surveyor etc.
 Member of a Chamber of Commerce and Industries or a trade Association.
 Any person who participates in a tender.
 A person who has a Taxpayer's Identification Number (TIN).
 Candidate for Union Parishad, Paurashava, City Corporation or Parliament.

Time to Submit Income Tax Return:

For Company
By fifteenth day of July next following the income year or, where the fifteenth day of July falls before the
expiry of six months from the end of the income year, before the expiry of such six months.

 For Other than Company

Unless the date is extended, by the Thirtieth day of September next following the income year.

Consequences of Non-Submission of Return

  imposition of  penalty  amounting to  10% of tax on last assessed income subject to a minimum of  Tk.
1,000/-
 In case of a continuing default a further penalty of Tk. 50/- for every day of delay.

Assessments

1) Assessment on correct and assessment after hearing: Section 82

Where a return or a revised return has been filed under Chapter VIII and the DCT is satisfied that the return is
correct and complete, he shall assess the total income of the assessee and determine the tax payable by him on
the basis of such return and communicate the assessment order to the assessee within 30 days next following:

Provided that –
a) such return shall be filed on or before the date specified in clause (c) of subsection (2) of
section 75
b) the amount of tax payable shall be paid on or before the date on which the return is filed; and
c) such return does not show any loss or lesser income than the last assessed income, or
assessment on the basis of such return does not result in refund.

2) Universal Self Assessment: Section 82BB

1. Where an assessee furnishes a correct and complete return of income, the DCT shall receive such
return if or cause to be received by any other official authorized by him and issue a receipt of such
return and the said receipt shall be deemed to be an order of assessment for the assessment year for
which the return is filed.
2. A return shall be taken to be completed, if it is filed in accordance with the provisions of sub-section
(2) of section 75 and tax has been paid in accordance with section 74
3. Notwithstanding anything contained in sub-section (1) and section 93, the Board or any authority
subordinated to the Board, if so authorized by the Board in this behalf, may select, in the manner to be
determined by the Board a number of these returns filed under sub-section (1) and refer the returns so
selected to the DCT for the purpose of audit and the DCT shall thereon proceed, if so required, to
make the assessment under section 83 or section 84, as the case may be.

An assessee – an individual, a firm, a company or any taxable entity irrespective of income/ loss can file return
under Universal Self Assessment procedure. A return with loss, resultant refund, and also with income shown
lesser than last year and even if it contains exempted income and gift shall qualify for acceptance under
Universal Self Assessment.

3) Spot Assessment: Section 82D and Rule – 38B

4) Assessment on the basis of Chartered Accountant: Section 83AAA/Tax Audit

Where a return or a revised return filed by a company is reasonably believed to be incorrect or incomplete, the
Board may appoint a registered CA to examine the accounts of that assessee.

The CA shall exercise the powers and functions of the DCT and after examining the accounts shall submit a
report to the Board in writing. The Board shall forthwith forward the report to the DCT and the DCT after
giving an opportunity to the assessee shall make the assessment on the basis of the report of the CA and on the
basis of other evidences within 30 days after completion of hearing or consideration as the case may be and
communicate the order within 30 days from the date of such order.
 5) Best Judgment Assessment/Exparte Assessment
According to Section 84 of ITO 1984

Where any person fails –

f) To file the return required by a notice under section 77
g) Has not filed a return or revised return under section 78
h) To comply with the requirements of a notice under section 79 – production of accounts and documents
i) To comply with the requirements of a notice under section 80 – statement of assets and liabilities and
life style
j) To comply with the requirements of a notice under section 83 (1) – notice for the production evidence
and supporting and for hearing.

The DCT shall, by an order in writing, assess the total income of the assessee to the best of his judgment and
determine the sum payable by the assessee on the basis of such assessment; and in the case of firm, may refuse
to register it or may cancel its registration if it is already registered, and communicate such order to the
assessee within 30 days next following.

The assessment under section 84 of ITO 1984 is commonly known as exparte assessment.

An exparte assessment shall be construed as misconduct of concerned DCT if the Board proves him/her that
the best judgment assessment made by him/her shows lack of proper evaluation of legal and factual aspects of
the case, which has resulted in an arbitrary and injudicious assessment.

6) Assessment in the case of discontinued business: Section 89

When any business or profession is discontinued, a notice of such discontinuance must be given to the DCT
concerned within 15 days of the discontinuance of the business or profession accompanied by a return of total
income for the period between the end of the income year and the date of such discontinuance. If the person
discontinuing such business or profession fails to give such notice, the DCT may recover from him by way of
penalty a sum not exceeding the amount of tax assessed on him in respect of the business or profession upto
the date of its discontinuance.

7) Assessment in case of deceased persons: Section 92

Whenever any person dies, his executor, administrator or other legal representative is liable to pay tax out of
the estate of the deceased which was payable by him and any other tax liability which might be payable in
consequence of any assessment made after his death. Liability of the legal representatives is limited to the
extent to which deceased’s estate is capable of meeting.

8) Assessment in case of person leaving Bangladesh: Section 91

Whenever any person is going to leave Bangladesh and has no intention of returning, the DCT may proceed to
assess him for all the completed income years for which his assessments remain pending as well as for the
broken period upto the probable date of his departure from Bangladesh. In the circumstances, the DCT is
empowered to estimate the total income of the person leaving Bangladesh for the broken period and charge it
to tax at the rate enforce for the financial year in which such assessment is going to be made.

The assessee is entitled to get at least 07 days time to furnish the return and the particulars of his income

9) Assessment in the case of Minors, Lunatics, Idiots, Beneficiaries of any Trust etc. Section 95
Minors, lunatics and idiots are assessable to tax as beneficiaries through their guardians and trustees in the
same way and to the same extent as it would have been leviable and recoverable from such beneficiaries of full
age or sound mind in direct receipt of any income profits and gains. In the like manner, the beneficiaries of any
property managed by a Trust, Court of Wards, Receiver or Manager will be brought to tax through the
Trustees, Court of Wards, Receiver or Manager.

Time limit for issuing notice for assessment-

1. Time limits for issuing notice for assessment –

a) in the case where no return has been filed – 93 (3)(a)--------At any time
b) in the case of concealment or furnishing of inaccurate particulars etc in respect of any assessment
year – 93 (3)(b)----within 5 years from the end of the concerned assessment year
c) in any other case – 93 (3)(c)--------------- within 2 years for the end of the concerned assessment
year

2. Time limits for finalization of assessment –

a) where no return was filed – 94 (2)(a)----- within 2 years from the end of the year in which
notice was issued.
b) In the case of concealment etc. – 94 (2)(a) ---- within 2 years from the end of the year in
which notice was issued.
c) In the other cases – 94 (2)(b) ------- within 2 years from the end of the year in which notice
was issued.
Power to Call for Information: Section 116

The Director General of Inspection, the Commissioner of Taxes, the Director-General Central Intelligence Cell
and the Inspecting Additional/Joint Commissioner of Taxes any make any enquiry which they consider
necessary as respect any person liable or believed by them to be liable to assessment under the ITO or require
any such person to produce or cause to be produced any accounts or documents which they consider necessary,
and shall have the same powers for the purpose of making any such enquiry or enquiring the production of
accounts or documents under this Ordinance as the DCT has.

The Commissioner of Taxes, the Director-General Central Intelligence Cell, the Inspecting Additional/Joint
Commissioner of Taxes, the Commissioner of Taxes or an Inspector of Taxes, if so authorized in writing, may
for the purpose of making any enquiry which he considers necessary, enter the premises in which a person
liable or believed by him to be liable to assessment carries on his business or profession and may call for and
inspect any such person’s accounts or any documents in his possession and any stamp any account or
documents so inspected and may retain such accounts or documents for so long as may be necessary for
examination thereof or for the purpose of prosecution.

The DCT or an Inspector of Taxes shall not make any enquiry from any schedule bank regarding any client of
such bank except with the prior approval of the Commissioner of Taxes.

Refund of Tax: Section 146, 150 and 151

An assessee is entitled to get refund of tax where any amount of tax happens to be paid wrongly or in excess of
actual demand.

The DCT are empowered to issue refund vouchers for refund of tax being satisfied that an amount of tax has
actually been paid wrongly or in excess.

Any refund of tax due to an assessee, has got to be paid within 02 months of the date of the relevant
assessment order or claim of refund. If it is not paid within the 02 months period, interest @ 7.5% per annum
shall be payable to the assessee on the refundable amount from the 3 rd month upto the date of the issue of the
refund voucher.

Appeals, Revision, Reference and Taxes Settlement

1. First Appeal: Section 153,154,155 and 156

Appeals by an assessee not being a company against the order of the DCT shall be made to the Appellate
Additional/Joint Commissioner of Taxes. An assessee being a company may file appeal against the order of
the DCT or IJCT/IACT to the Commissioner (Appeals). Such appeal must be filed within 45 days of the
receipt of the concerned order in the prescribed form accompanies with appeal fee of Taka 200. No appeal
shall lie against order of assessment unless the tax payable on the basis of return has been paid before filling
the appeal. Time limit for appeal has been prescribed at 90 days from the end of the month which the appeal
was filed. If no order is made within the prescribed time-limit, appeal shall be deemed to have been allowed.
On disposal of an appeal the order shall be communicated within 30 days of passing such order.

2. Second Appeal: Section 158 and 159

Appeals against the order of Appellate Additional/Joint Commissioner of Taxes or the Commissioner
(Appeals) as the case ay be, lie with the Taxes Appellate Tribunal.

Such appeal by an assessee must be filed, within 45 days of the communication of the order, in the prescribed
form accompanied by appeal fee of Taka 1,000. In the case of appeal filed by an assessee the tax payable at
10% of the amount representing difference between the taxes determined on the basis of the order of the IJCT
or the CT (Appeal) and the tax payable under section 74, must be paid.

The DCT can file an appeal to the Tribunal with the prior approval of the Commissioner (Appeal)
An appeal filed by an assessee to Appellate Tribunal shall be deemed to have been allowed if the Appellate
Tribunal fails to make an order thereon within a period of six months from the end of the month in which the
appeal was filed. The time-limit of six months for disposal of appeal has been extended to one year in respect
of an appeal filed by an assessee before the 1 st July, 2002

The Appellate Tribunal shall communicate its order on the appeal to the assessee and to the Commissioner
within 30 days from the date of such order.

3. Reference Application to the Supreme Court: Section 160,161 and 162

The assessee or the Commissioner may within 90 days from the date of receipt of the order of the Appellate
Tribunal refer to the High Court Division in the prescribed form and manner, question of law arising out of the
order of the Tribunal.

An appeal shall lie to the Appellate Division from a judgment of the High Court Division if the High Court
certifies the order to be fit for appeal to the Appellate Division.

Requirement of Certificate in Certain Cases: Section 184A, 184B, 184BB and 184C
A TIN certificate is necessary for opening L/C, Renewal of Trade Licence, Submission of tender documents
registration of documents. In the case of ownership also production of TIN has been made compulsory. It has
also been made compulsory for registration of purchase of land, building or apartment situated within any city
corporation, deed value of which exceeds Taka 1 Lacs. This provision shall not apply to a non-resident
Bangladeshi. It will also have to be produced for sanction of a loan exceeding Taka 5 Lacs by a commercial
bank or leasing company, issue of Credit Card, issue of practicing license to a doctor, a CA, a CMA, a Lawyer
or an ITP, giving connection of ISD telephone, Registration of a company under CA 1994 in resoect of
sponsor directors, submitting application for membership of a club registered under CA 1994, for submission
of application for license as a Nikha Registrar , applying for or renewal of membership of any trade body.

Every assessee or any person who applies for TIN will be given a TIN certificate u/s 184B.
Under section 184BB there has been made provision for tax collection account number for every
person in charge of deducting or collecting tax at source. Such deducting or collecting person shall
have to obtain his own account number as per rule 64C

Tax Rate (Assessment Year- 2008-09)

Other than Company :

For individuals other than female taxpayers, senior taxpayers of 70 years and above and retarded taxpayers, tax
payable for the

First                      1,65,000/-              Nil

Next                      2,75,000/-              10%
Next                      3,25,000/-              15%
Next                      3,75,000/-              20%
Rest Amount                                      25%

For female taxpayers, senior taxpayers of age 70 years and above and retarded taxpayers, tax payable for the

First                      1,80,000/-              Nil

Next                      2,75,000/-              10%
Next                      3,25,000/-              15%
Next                      3,75,000/-              20%
Rest Amount                                      25%

Minimum tax for any individual assessee is Tk. 2,000

( In case of business personnel Taka 3,600)

Provided that those assesses who paid tax at 25% for the assessment year 2007-2008 with declaration of more
than 10% higher income in 2008-2009 will get 10% tax rebate on tax attributable to that additional higher
income declared in 2008-2009 assessment year.

Capital gain of an individual

a) If the asset is disposed off before the expiry of 5 years from the date of acquisition Slave rate

b) If the asset is disposed off after expiry of 5 years from the date of acquisition

Capital Gain + Remaining Income = Total income Slave Rate

 Whichever is lower

Capital Gain 15% and Remaining Income Slave Rate

Income from Winning, from Lottery 20%

Non-resident Individual                       25%

(other than non-resident Bangladeshi)

For Companies

Publicly Traded Company 27.5%

Provided that rebate @ 10% of income tax shall be allowable if such a PLC gives more than 20% dividend.

Publicly Traded Company 24.75%

Provided further that if such a PLC declares less than 10% dividend or does not paid within the time
determined by the SEC, the rate of tax for the said PLC shall be 37.5%

An additional tax at 5% is chargeable on undistributed profit if dividend and/or bonus share is not declared of
at least 15% of paid up capital within 6 months of year closing u/s 16B

Non-publicly Traded Company 37.5%

Bank, Insurance & Financial Company 45%

Banking company to pay excess profit tax @ 15% on so much of profit as it exceeds 50% of aggregate
sum of capital & reserve.

Mobile Phone Operator Company 45%

Provided that such mobile company offers at least 10% of its equity as IPO 35%

Any dividend income 20%

Capital Gain 15%

Textile 15%

RMG – Woven and Knit 53BB & 82 (C ) 0.25%

RMG – other than Woven and Knit 0.25%

Jute Industries 15%

Diamond Cutting & Polishing 15%

Private University 15%

Local Authority 25%

Dividend – Company 20%

Dividend – Individual 10%

Dividend of MF/UF upto Taka 25,000 – exempted

Exceeding Taka 25,000 20%

New Hospital Nil

Income from Agro-processing industry Nil

Income from Farming Nil

Enterprise in EPZ Nil

Private Sector Power Generation Co. upto 15 years – Nil

Bangladeshi Resident Assessee’s income from computer software – Nil

Income of Sena Kalyan Sangstha house property income at Dhaka & Khulna – Nil

 Tax Rebate for investment :

          Rate of Rebate:

          Amount of allowable investment is either up to 25% of total income or Tk. 5,00,000/- whichever is less.
Tax rebate amounts to 10% of allowable investment.

          Types of investment qualified for the tax rebate are :-

 Life insurance premium

 Contribution to deferred annuity
 Contribution to Provident Fund to which Provident Fund Act, 1925 applies
 Self contribution and employer's contribution to Recognized Provident Fund
 Contribution to Super Annuation Fund
 Investment in approved debenture or debenture stock, Stocks or Shares
 Contribution to deposit pension scheme
 Contribution to Benevolent Fund and Group Insurance premium
 Contribution to Zakat Fund
 Donation to charitable hospital approved by National Board of Revenue
 Donation to philanthropic or educational institution approved by the Government
 Donation to socioeconomic or cultural development institution established in Bangladesh by Aga
Khan Development Network

 Assessment Procedures  :

 For a return submitted under normal scheme, assessment is made after hearing.
  For returns submitted under Universal Self Assessment Scheme, the acknowledgement slip is
determined to be an assessment order. Universal Self Assessment is of course subject to audit. 

Appeal against the order of DCT :

A taxpayer can file an appeal against DCT's order to the Commissioner (Appeals)/Additional or Joint
Commissioner of Taxes (Appeals) and to the Taxes Appellate Tribunal against an Appeal order.

Tax withholding functions :

In Bangladesh withholding taxes are usually termed as Tax deduction and collected at source. Under this
system both private and public limited companies or any other organization specified by law are legally
authorized and bound to withhold taxes at some point of making payment and deposit the same to the
Government Exchequer. The taxpayer receives a certificate from the withholding authority and gets credits of
tax against assessed tax on the basis of such certificate.

Income Tax Authorities:

          Income Tax Authorities are :-

 National Board of Revenue,

 Director General of Inspection (Tax),
 Commissioner of Taxes (Appeals),
 Commissioner of Taxes (LTU)
 Director General (Training),
 Director General Central Intelligence Cell (CIC),
 Commissioner of Taxes,
 Additional Commissioner of Taxes (Appeal/Inspecting),
 Joint Commissioner of Taxes(Appeal/Inspecting ),      
 Deputy Commissioner of Taxes,
 Assistant Commissioner of Taxes,
 Extra Assistant Commissioner of Taxes,
 Inspectors of Taxes.