TAX & TAXATION SYSTEM

OF
BANGLADESH

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 AIM
To apprise about the basic idea
on
taxation system fol in Bangladesh.

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 SEQUENCE
 Preliminary Idea on Tax
 Classification and Types of Taxation in Bangladesh
 Basic Calculation of Tax

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 What is Tax?
Why do we pay it for?

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 DEFINITION
The term “Taxation” comes from a Latin words
“Taxatio”. It means to determine the payable quantum on
estimate.

The amount which is paid to the government for living in

civilized society, paid by individuals.

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OBJECTIVES OF TAX
Economic
Control

Redistribution Full
of Income Employment

National Collection of
Development Revenue

Protection of
Industries
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QUALITIES OF GOOD TAX SYSTEM
Equality

Flexibility Convenience

Simplicity Economy

Diversity Productivity
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 IMPORTANT TERMINOLOGIES
Assesse – A person by whom any tax or other sum of money is
payable under the ordnance of ITO 1984.
 
Assessment – Income Tax assessment is one of the main structures
under which income tax is calculated.

Income Year and Assessment Year for an Individual – Income

year starts from 1st July and ends on 30th June. Assessment year is the
year immediately following the income year wherein income is
assessed. 8
COMMON TERMINOLOGIES
Income Year
Assessment Year
From To

01-Jul-17 30-Jun-18 2018-19

01-Jul-18 30-Jun-19 2019-20

01-Jul-19 30-Jun-20 2020-21

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CLASSIFICATION & TYPES OF TAX
Basis of
Classification

Base Progression Incidence

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 ON THE BASIS OF BASE
Single Tax. A single tax occurs in a system in
which the tax is levied on one subject. E.g. Poll Tax.

Multiple Tax. A multiple tax refers to the tax

system in which taxes are levied on various items or
bases.
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ON THE BASIS OF PROGRESSION
Progressive Tax. A progressive tax is a tax in which the tax
rate increases as the taxable amount increases.
Proportionate Tax. A proportional tax is a tax imposed so
that the tax rate is fixed, with no change as the taxable base
amount increases or decreases.
Regressive Tax. A regressive tax is a tax imposed in such a
manner that the tax rate decreases as the amount subject to
taxation increases.

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ON THE BASIS OF PROGRESSION

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ON THE BASIS OF INCIDENCE
 Direct Tax. Direct taxes are imposed on income
and profits.
 Indirect Tax. Indirect taxes are levied on goods
and services.
 Difference. Direct taxes are paid directly to the
govt. while indirect tax is collected by an
intermediary from consumer
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 TYPES OF TAX

Basis of
Classification

Value Added
Sales Tax Excise Tax Personal Tax
Tax (VAT)

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BASIC CALCULATION OF TAX

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SOURCES OF INCOME TAX
 Salaries
 Interest on securities
 Income from house property
 Income from agriculture
 Income from business or profession
 Capital gains
 Income from other sources
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 INCOME TAX RATES
Slab of Income Rate of Income Tax
Up to 2,50,000 Tk 0%
Next 3,00,000 Tk 10%
Next 5,00,000 Tk 15%
Next 6,00,000 Tk 20%
Next 30,00,000 Tk 25%
Rest Amount 30%
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 SCHEDULE OF INCOME
Schedule

Schedule 2 Schedule 3
Schedule 1
House Property
Salaries Tax Rebate
Income
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LET’S DO SOME TAXES !!!

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 Oh!! I forgot to do
my taxes again!!!

Capt Fahim is a defense officer who has an annual basic income

of 3,65,400 Tk along with due allowances. He gets a house rent
of 3,00,000 Tk annualy as revenue. What would be his annual
tax for the assessment year of 2020-21?
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 SCHEDULE OF SALARY
Amount of Income Amount of Exempted Net taxable income
Pay & Allowance (Tk) Income (Tk) (Tk)
(1) (2)  
Basic Pay 3,65,400 - 3,65,400
Uniform Allowance 14,400 14,400 -
Defense Services
67,500 67,500 -
Allowance
Batman Allowance 20,220 20,220 -
Festival Allowance/
65,900 65,900 -
Bonus
Total 5,33,420 1,55,060 3,65,400
Net Taxable Income From Salary (1)-(2) = 3,65,400
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 SCHEDULE OF HOUSE PROPERTY INCOME
Loc and
Expense Amount Income Amount
Description of Particulars
(1) (2)
property
Annual Rental 12 X 25,000 =
 
Income 3,00,000
Repair &
91,000 -
1 Storied 1500 Sq Maintenance
Ft Building at Municipal Tax 8,500 -
DOHS, Baridhara Land Revenue 500 -
Interest on Loan - -
Total 1,00,000 3,00,000
Net Income (1)-(2) = 2,00,000 23
 SCHEDULE OF TAX REBATE

Amount of Rebate will be directly 15% of the total

investment made with below preconditions:
 Maximum 30% of the total taxable amount can be
invested.
 If investment is less than 30% of the taxable income,
then 15% rebate will be made upon actual investment
 Rebate cannot exceed 1.5 crore of Tk

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SCHEDULE OF TAX REBATE

Particular Amount
DSOP 60,000
DPS 96,000
Total Investment = 1,56,000
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CALCULATION OF PAYABLE TAX

Computation of Total Income

Net Taxable Salary Income = 3,65,400 Tk
Net House property Income = 2,00,000 Tk

Therefore, Total Taxable Income = 5,65,400 Tk

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 CALCULATION OF PAYABLE TAX

Calculation of Tax on Total Income

First 2,50,000 – Nil
Next 3,00,000 – 30,000 Tk
Next 15,400 – 2,310 Tk
 
Therefore, Income Tax Incurred = 32,310 Tk

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 CALCULATION OF PAYABLE TAX
Calculation of Tax Rebate
Maximum allowed investment = 5,65,400 X 30%
= 1,69,620 Tk  
Actual Investment Made = 1,56,000 Tk
So, he will get a direct 15% Rebate on his investments
Tax Rebate = 1,56,000 X 15%
= 23,400 Tk
Therefore, Payable Income Tax = (32,310 – 23,400)Tk = 8,910 Tk

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Summary

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Any Question ?

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Thank You

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