Department of Accounting and Information Systems

EMBA 3rd Semester 2nd Midterm Exam

Course: AIS 5301 Taxation Practices
Time: 1 (one) Hour: Marks: 20

Question 1:
What is grossing up of interest? Explain the taxability of income from interest on different securities. 5.0
Question 2:
Mr. Abdullah has the following income for the current income year:
Income from Salary: Total Taxable Income Tk.30,00,000
Income from Securities:
8% tax exempt government securities Tk.25,000; Interest on taxable government securities Tk.3,325; and
Interest on debenture Tk.19,000. Bank charge Tk.800 to collect interest from tax exempt government
securities.
Income from House Property:
He has a house. Half of the house is let out at Tk.12,000 per month and other half is used for his residence.
The municipal value of the house is Tk.3,00,000. The let-out part of the house remained vacant for two
months during the year. Expenses of the house for the year were as follows:
Land development tax Tk.1,000;
Repair Tk.38,000;
Interest on HBFC Loan Tk.45,000;
Maintenance of water pump, etc. Tk.6,000 and
Municipal taxes Tk.5,400

Investment:
During the year he spent for:
Insurance Premium paid Tk.20,000 (policy value Tk.3,00,000);
Purchase of primary share of a listed company Tk.20,000;
Purchased academic boos Tk.5,000;
Contributed to Deposit Pension Scheme per month Tk.1,000;
Paid to Government Zakat Fund Tk.5,000 and
Purchase of savings certificate Tk.20,000.

Required:
1. Calculate total taxable income of Mr. Abdullah 9.0
2. Calculate net tax liability of Mr. Abdullah for the current assessment year. 6.0