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Any income, profits or gains, from whatever source derived, chargeable to tax under IT
Ordinance; 84;
The profits and gains of any business of insurance carried on by a mutual insurance
association computed in accordance with the IT Ordinance; 84:
Any sum deemed to be income, or any income arising or received or deemed to accrue or
arise or be received in Bangladesh.
New provision; 2002: Provided however, that Bonus or Bonus Shares issued/ declared by a
company shall not be included as income of the recipient shareholder.
Income may be assessable or non- assessable. Non-assessable are totally ignored by tax laws
Viz. pension income, receipts of accumulated balance from recognized provident fund etc. as
have been declared as non-assessable income by the Govt. from time to time. Assessable income
is again divided into taxable and non-taxable income. Non-taxable income is taken into total
income for taxation rate purpose but no tax is to be paid on this part of income, rather, a
proportionate rebate is allowed on this income as is included in the total income. Non-taxable
income like share income of partnership firm, share income from Hindu Undivided Family etc.
(Salary income of Govt. servant was deemed to have been tax paid till 30.06.2010 but it has been
made taxable by Finance Act. 2011) are included in the total income of the tax payers only to
raise the income ceiling and the tax rates as and when applicable. For example, a tax payer with
an income of Tk.220,000/- would not be at all taxable (below taxable ceiling) but it shall be
taxable due to inclusion of his share income of a firm (already taxed at firms stage), say another
Tk.180,000/-. But with the inclusion of his non-taxable income (taxed share income), the total
income works out Tk.4000,000/- and the tax as per Finance Act., 20013 is Tk.18,000/-. But he
has not to pay Tk.18,000/-rather, a proportionate rebate for this inclusion of the said non-taxable
income (18,000/4000,000) X 1,80,000/=8,100/- is to be deducted from the tax payable i.e. net tax
Tk.(18,000-8,100)=9,900 remains to be payable instead of Tk.18,000/- as calculated above on his
total income of Tk.400,000/-.
The inclusion of Non-Taxable income into the total income may give rise to higher income
ceiling with higher taxes or it may give rise to higher rates of taxes of the existing tax payers.
Who is to pay tax? Residential Status Sec. 2(55)
Taxability of a person is determined on the basis of his residential status. Anyone staying in the
taxable territory for 182 days or more in the income year or 365 days at a time or consecutively
within 04 years immediately before the income year just preceding the assessment year plus a
minimum of 90 days in the income year, shall be deemed to be resident. Otherwise, a nonresident.
Non-resident except a Bangladeshi non-resident has to pay tax at the maximum rate of 25%
irrespective of total income. Moreover, a Non-Resident shall not be entitled to any sort of tax
rebate like investment tax rebates etc.
Companies and other statutory bodies shall be resident if their control and management is wholly
situated in Bangladesh. HUF, firms or other Association of Persons shall be resident in
Bangladesh if its control and management is situated wholly or partly in Bangladesh in that year.
Assessment year means the Govt. financial year just following the income year when the
assessment is to be made.
opt to buy it as per the provisions of Income Tax Ordinance 1984. All these are there just to
check the gross under valuation of properties so sold off.
The rates of capital gains tax have also been simplified. Capital gains arising out of disposal of
assets within five years of acquisition shall fetch tax at normal rate along with other income. If
the gains as such, accrue after five years the tax payable by an individual shall be the normal tax
along with other income or the normal tax on other income if there be any, plus 15% on the
portion of capital gains, whichever is beneficial for the tax payer. A company shall pay tax on
capital gains @ 15%. It has been also provided that tax deducted at source @ 3% in city
corporation areas, 2% in municipal areas and 1% elsewhere on the Deed Value at the time of
registration of the sale deed. It is further provided that the capital gain arising from sale of lands
where from tax at has been realized by the sub-register at the aforesaid rates shall not be further
taxed because, taxes so deducted shall be deemed to be the final discharge of tax liability under
this head u/s 82C except where the same capital gains have been reinvested under sub section 10
of section 32 in the equity of a new industry.
a. If the sale proceeds of the scrapped assets fall below the written down value, the
deficiency shall be deemed to be obsolescence allowance u/s 19(16).
** The excess of sale proceeds over the written down value, subject to deduction of a maximum
depreciation amount allowed so far, shall be taken to be the capital gain u/s 31 and the deducted
amount of depreciation shall be deemed to be a business income u/s 28.
** Capital gains arising to an individual from the transfer of Govt. securities and stock and
shares of public limited companies listed with the stock exchanges of Bangladesh are exempted
from tax. This exemption shall also be available to a Non-resident if similar benefit is available
for him in his home country. Sec.32(7) further specifies that Capital gains arising from transfer
of shares and stocks to a company shall be however, taxed at a concessional rate of 10% from
assessment (F.A. 2010).
Total Income:
Tax is levied on the basis of total income of an assesses i.e. taxpayer. For individuals, Firms etc.,
the minimum ceiling for taxable limit has been now fixed at Tk.200,000/- from the asst. year of
2012-2013. For companies, banks and other statutory bodies, there is nothing like
minimum tax ceiling, which means otherwise that these bodies will have to pay tax for any
amount of income. The rate is also different as is prescribed by annual Finance Act. Taxability of
a resident shall be determined on the basis of his total world income; and its the local income
only for a non-resident taxpayer. From 2008-2009 to 2010-2011, the minimum ceiling for tax
exemptions for a non-corporate tax payers was Tk. 1,65,000/- and for Ladies and senior persons
aged 65 years and above, it was Tk.1, 80,000/-. But for 2012-2013 assessment year, the two
groups as above shall enjoy the minimum tax exemption ceiling at Tk.200,000 & Tk.225,000/respectively. A retarded person shall enjoy tax exemption ceiling of Tk.275,000 for 2012-2013.
But from 2013-2014, the rates have been changed to 220,000, 250,000 & 300,000 for
individuals, women & Sr. citizen over 65 and the retarded person respectively. The next slabs for
calculation of taxes for these tax payers shall remain to be Tk.3,00,000/-, 4,00,000/-, 3,00,000/and the maximum rate of 25% as before.
Total world income means any income arising to a Resident anywhere in the world
Tax rates have been given at the end of this write up.
Assessment year is the year when the assessments are made. Assessment year must conform to a
govt. financial year. It is the year just following the income year.
Income year is the year when the income is earned. Different tax payers may have different
income year but each tax payer must fall within a particular assessment year. Income year is
otherwise the year just preceding the assessment year.
Assessment:
Assessment means the computation of total income and the determination of tax liability of a
taxpayer. The assessment order shall be framed within 30days from the end of the hearing
and the DCT shall communicate to the assessee the same order within next 30days.
Section 81: Provisional assessment may be made by the Dy. Commissioner of Taxes on the basis
of return submitted or where no return has been submitted, on the basis of the latest assessed
income. Regular assessment in such cases shall have to be made subsequently.
Section 82: Where the Dy. Commissioner of Taxes has the reason to believe that the return
submitted is correct and complete, he may assess and accept the total income shown as per
return.
Section 82B: Assessment as per IT return if the Board so directs the Deputy Commissioner of
Taxes to do so
Section 82BB: Universal Self Assessment - if the return submitted by an assessee appears to be
correct and complete, the DCT shall accept it as it is. And the receipt given as
acknowledgement to the submission of the said return shall be deemed to be as an
assessment order of the DCT. However, any such return is also subjected to audit only on the
prior approval of the NBR.
Section 83: Assessments after hearing of cases: notices are issued, compliance is asked for,
accounts and evidences are verified and the assessments are finally made subject to other norms
and procedures (Normal Assessment).
Sec. 84: Best judgment assessment: For non-submission of returns or for non-compliance of
notices after the assessment proceedings began, the DCT shall complete the assessment to the
best of his judgment and determine the total income and tax payable.
If the best judgment assessment of the DCT lacks of proper evaluation of legal and factual
aspects in the opinion of the Board, the actions of the DCT shall be construed as
misconduct. [Sec. 84(2)]
Sec.30: No expenses shall be allowed u/s29 from income earned through Business or profession
unless certain tax regulations are obliged by the tax payer i.e. non deductions of taxes & VAT at
source (TDS) from specified heads. For example; TDS from Salaries, House Rents, Imports,
Payment to Contractors and on Supplies of goods and services etc.
Sec.30A: The DCT cannot disallow any claim of the assessee without ascribing specific reasons
for any such disallowance of any item of expenditure. (Finance Act, 2002.)
Sec.93: For concealment of income/underassessment or for undue relief having been enjoyed in
the past, the Deputy Commissioner of Taxes, subject to certain conditions and restrictions may
re-open the case within 06 years (FA 2012) from the end of year of completion of the assessment
and determine the income of that year and may further start penal proceedings as per law leading
to imprisonments or fine or the both.
Sec.94: Assessments shall be made within 02 years from the end of the assessment year in which
the income was first assessable (in case of Audit/re-opened cases) otherwise, after the expiry of
06 months from the end of the assessment year in which the return is submitted (normal
assessment). However, in a case where transfer pricing is involved, the assessment shall be made
within 03years from the end of the concerned assessment year.
Sec. 94(4): If the DCT fails to give effects to appellate decision within 30 days, it shall be
construed as misconduct.
Sec. 123 to 131:
Sec. 164 to 171:
These sections deal with the penalties and prosecutions for various offences and irregularities
committed by the taxpayers in respect of their income tax assessments.
The punishment ranges between monetary penalties to 05 years imprisonment but in no case, the
minimum imprisonment shall be less than 03 months.
Appeals by aggrieved tax payers:
An aggrieved assesses, other than a company, may prefer an appeal to the appellate Joint/Addl.
Commissioner of Taxes within 45 days from the date of receipt of the impugned assessment
order. (Sec.153)
An appeal fee of Tk.200 (Finance Ordinance, 2007) to be deposited to govt. a/c under code no.11143-0010-1876 and the admitted liability U/S 74 shall have to be paid before filing the appeal.
A company will file the appeal direct to the Commissioner of Appeals with similar
conditions. Sec. 153(1A)
The aforesaid appeals shall be deemed to have been accepted unless an order is passed by the
appellate authorities within 150 days from the end of the month in which the appeal was filed
[sec.156(6)]
Sec. 121A: Revisional powers of the Commissioner
This section was deleted by Finance Ordinance, 2007, but again reintroduced by Finance Act.
2009. The Commissioner may call for any case record wherein the order has been passed by any
officer subordinate to him and may pass an order as he deems fit. On the other hand, the tax
payer may also file a revision petition to the Commissioner of Taxes within 60 days from the
date of receipt of the impugned order along with a fee of Tk.200/-. The undisputed tax under sec.
74 has also to be paid before filing the petition.
The aforesaid review petition shall be deemed to have been accepted unless an order is passed by
the Commissioner within 60 days from the date of filing the review petition. This revision
petition is subject to the condition that the applicant has to forgo the right to further appeals to
Appellate Joint/Addl. Commissioner of taxes or the Commissioner of taxes (Appeals) or to the
Taxes Appellate Tribunal as stated earlier.
Taxes Appellate Tribunal: (Sec.158)
Taxes Appellate Tribunal shall be constituted by members being recruited from amongst retired
members, NBR, retired Commissioners of Taxes, existing Commissioners of Taxes, Chartered
Accountants & ICMAs with at least 08 years practice, retired District and session Judge and
practicing Tax Lawyers of enormous experience. Subject to norms, procedures and limitations,
an assessee can appeal to Tribunal within 60 days and on payment of an appeal fee of Tk.1000/to be deposited to govt. a/c against the orders of the Appellate Commissioners/Additional
commissioners/Joint commissioners of taxes. The appeal shall be deemed to have been accepted
unless any order is passed on such appeal by the Tribunal within 06 months from the end of the
month in which the appeal was filed.
Provided however, that no appeal shall lie to the Tribunal unless 10% of the amount representing
the difference between the tax as determined on the basis of the order in the 1st appeal (revised
assessment u/s156) and the tax payable u/s74 as per return is paid. It is further provided that the
Commissioner of Taxes may however, waive such payment of taxes u/s 158(2) in a manner as he
deems fit on cogent grounds (F. Act. 2011).
Reference to the Honble Supreme Court. (Sec.160, 162)
Such references only on questions of law may be made within 90 days and on payment of a fee
Tk.2,000/Provided however that no reference under sub sec. 01 shall lie against the order of the Taxes
Appellate Tribunal unless the following taxes have been paid.
25% of the difference between taxes payable under sec. 74 and the taxes due after the
disposal of the case by the Tribunal (taxes u/s. 159) when such taxes does not exceed
Tk.10,00,000/-,
50% of the difference between taxes payable under sec. 74 and the taxes due after the
disposal of the case by the Tribunal when such taxes exceeds Tk.10,00,000/-
Conclusion:
Tax laws are highly cumbersome and full of juggleriess of repetitions and renewals, which have
made it difficult for a commoner to understand. A BCS (Taxation) Cadre officer has to undergo
02 years probation before being posted to the charge of assessments. Therefore, I have no reason
to be very much enthusiastic as to the sort of ongoing knowledge the participants may gather
from this sort of short lived course so hopefully organized by the management of this great
institute.
Rates of Taxes as per Finance Act, 2009.
Individual / Firm / Hindu Undivided Family / Association of Person (AOP)
First Tk.165,000 -----------------------------------Nil
Next Tk.275,000 ---------------------------------@ 10%
Next Tk.325,000-----------------------------------@ 15%
----------------------------------@ 25%
Provided however, that a lady tax payer or a Senior person over 65 shall enjoy the initial
exemption of Tk.180,000/- Provided further that an assessee who paid taxes in the
maximum rate in the last year shall get a rebate @ 10% on the additional tax attributable
to any excess income shown at more than 10% this year over last year.
Rates of Taxes as per Finance Act, 2011.
Individual / Firm / Hindu Undivided Family / Association of Person (AOP)
First Tk.180,000 ----------------------------------------Nil
Next Tk.300,000 -----------------------------------@ 10%
Next Tk.400,000-------------------------------------@ 15%
Next Tk.3000,000------------------------------------@ 20%
On the balance
------------------------------------@ 25%
------------------------------------@ 25%
------------------------------------@ 25%
Provided however, that a lady tax payer or a Senior person of 65 and above shall enjoy the
initial exemption of Tk.250,000 and a retarded person shall enjoy the minimum ceiling of
Tk.300,00. Other slabs remain as usual.
Non-residents except a Bangladeshi Non-resident, (NRB) shall be charged to tax at the
maximum rate of 25%. The NRB shall be taxed at normal rates as applicable to a resident of
Bangladesh.
But in no case, tax shall be lesser than Tk.3,000 in any city corporation areas, Tk.2,000 in
municipalities and Tk.1,000 in other places.
Tax Rates for Corporate Tax payers as per Finance Ordinance, 2011
Public Ltd. Companies listed with the Stock Exchange-27.5%
Private Ltd. Companies-37.5%
Banks, Insurance Companies and other Financial Institutions-42.5%
Mobile Phone Operators Companies-45%
Finance Act. 2012: There was no change in the tax rates as above.
Finance Act. 2013: Corporate tax rates also remain to be the same as above.
But if any Mobile Company offers at least 5% of its shares in the Stock Market as IPOs, in that
case, tax rate shall be @40% Dividend income shall be taxed @ 20% (for the corporate assesses)
other conditions remain unaltered as last year.
As per Finance Act. 2011, every company irrespective of shown Profit or Loss, shall pay
a minimum tax of 0.50% of the amount representing such companys gross receipts from all the
sources for that year.
An investment tax rebate @15% on 30% of the total income excluding the employers
contribution to Provident Fund (Part B of First Schedule) or Tk.150,00,000/- whichever is less,
shall be enjoyed by an individual taxpayer. But a corporate Tax Payer is not eligible for any such
benefit of investment tax rebate.
Wealth Tax had been abolished (Finance, Act, 1999). But again a surcharge has been introduced
@10% of the tax payable by a person whose total wealth as per IT-10B exceeds Tk. 02 Crore and
@15% of the tax payable if the said total wealth exceeds Tk.10 Crore for any income year
(F.A.2013).
The income earned abroad by a Bangladeshi citizen and the same being remitted through proper
banking channel is totally tax exempted vide SRO. 216-Laws/Income tax/2004 dated 13.7.2004.
Public Ltd. Companies listed with the Stock Exchange will enjoy a rebate of 10% from tax
payable if it declares dividend of 20% or more in any year.
Provided further that if a Public Ltd. Co. does not declare a minimum of 10% dividend, it
will pay tax @ 37.5%.
Public Ltd. Company declaring dividend of less than 15% of the paid up capital in
any year shall fetch an additional tax of 5% on the reserve so made with
undistributed profit of the year.
Corporate rates of income tax for ready-made garments industries have been
reduced from 30% to 10% by Finance Act, 2003.
Assesses other than the above i.e. individuals firms etc. used to get an initial exemption
of Tk.40,000 (non-assessable) from dividends and the balance was to be taxed at normal
rate applicable to that assessee. This ceiling of exemption had been raised to Tk.100,000
by Finance Act, 2001. And again reduced to Tk.25,000 by Finance Act, 2002. Again total
exemptions of dividend has been allowed by Finance Act, 2003. But in the F.A.2012, an
exemption of Tk.5,000 from dividend was again introduced and this exemption of
Tk.5,000 has again been raised to Tk.10,000 by F.A.2013 i.e. effective from asst. year:
2013-2014.
From now onward, there will be an exemption of Tk.10,000 and the balance if there be
any shall be added to total income. Dividend income shall be taxed @ 20% for Corporate
tax payers (Companies etc.) and an individual shall be taxed at normal rates as applicable
to him/her.