Taxation

M M HASSAN-ID NO: 200830082 Asian University of Bangladesh (AUB) dashingmmhassan.2021@gmail.com mmhassan.antor@gmail.com mmhassan.antor@yahoo.
com
Subject Title: Taxation Chapter: 01
Question: What do you meant bt taxation? Answer: Generally we can say, Taxes are the most common important sources of revenue of a governmentr. It is compulsory levey, to be paid by the citizens. Who are liable to pay it, imposed by the government. According to E. H. Plank: Taxes are general compulsory contribution of wealth, levied upon person-natural or corporate, to defray the expenses incured in confering common benefit, upon the resident of the state. According to Taylor: Taxes are the compulsory payment to govenrment without expectation of direct return in benefit to the tax payer. Finally we can say, tax is the revenue collected by the Government from persons, who are liable to pay it & organizations under different taxing Acts.
Question: Discuss about the Characteristics of Taxation. Answer: Against the bacedrop of the definition of tax, following characteristicses of tax amy be identified: i) ii) iii) It is a compulsory levey under taxing Act; (ITO:1984) Tax payers cannot claim direct return from government & proportionate or equivalent service for payment of tax. It is a price paid to the government for living in a civilized society.
A Fancy Name-------------AUPARUPA
M M HASSAN-ID NO: 200830082 Asian University of Bangladesh (AUB) dashingmmhassan.2021@gmail.com mmhassan.antor@gmail.com mmhassan.antor@yahoo.com
Question: What are the objectives of Tax? Explain it. Answer: Introduction: Governement needs revenue for defence, administration & development activities. The main source of this revenue is tax. In such context, the objectives of tax can be identified as follows:1) Collection of Revenue: No Government can run its administration & perform development works without collecting tax as a source of revenue. Thus the main objective of tax is the collection of revenue. For example: 2001-2002 it was estimated 92%. 2) Redistribution of Income: Concentration of money & income in few hands can create socioeconomic & political problem. Through taxation & various techniques under it, Govt. endeavors to the redistribution of income. 3) Economic Control: To guide the economy in desired direction, Govt. Needs to control inflation, push money to the economy, develop certain sectors of economy & control some Activities. Taxation can be an important tool to achieve this macroeconomic objective. 4) Protection of Industry: For the greater interest of the country Government many provide incentive to infant & certain basic industries. 5) Economic Development: For development of a country Government needs to create infrastructure & invest in certain sectors. For the activities Govt. needs funds & tax revenue can provide fund for the purpose. 6) Full Employment: Every state creates employment opportunities t o its citizen. According to F.F Taylor: Besides collecting revenue & economic control, one of the important objectives of tax is to lead the economy to full employment stage. 7) Raising National Income in Desired Level: For economic development of a country, national income needs to be increased. According to A. P. Nearer: Taxation can be used as a tool for the purpose. He copied that the impact of taxes are two: it decreases income of tax payer & increased the income of the Government. The 2nd one effect is more important that first one. Conclusion: Thus, it is seen that the objectives of tax is not only the collection of revenue, its other objectives relevant to economic control & economic development are not less important.
Question: Discuss about the Classification of Tax. Answer: Introduction: Taxes are the compulsory payment to Government without expectation of direct return in benefit to the tax payer. Tax can be classified into different types based on different angles, which are described below:Types of Taxes
On the Basis of Incidence
Number of Tax
On the Basis of Structure of Tax Rate
a
Direct Tax
b
Indirect Tax
a
Single Tax
b
Multiple Tax
a
proportion
b
Progressive
c
Degressive
A) On the Basis of Incidence: On the basis of incidence tax can be classified into two types such as:a) Direct Tax: Direct Tax is one whose incidence rests upon the person who bears its impact also. Example: Income tax. b) Indirect Tax: Indirect tax is one which is imposed on a person or goods but its burden shifted to others. Example: Value Added Tax, Exercise duty etc. in these case incidence is to shifted. B) On the Basis of Number: Tax can be classified two on the basis of base as follows: a) Single Tax: When a country the tax system comprises only one tax, then it is called single tax. Example: Poll tax, head tax. b) Multiple Tax: When in a country different types of taxes are imposed considering different bases then it
is called multiple tax. At present this system is prevant world wide & single tax system is found absent.
C) On the Basis of Structure of Tax Rate: Tax can also be classified on the basis of the degree of structure of tax rate such as:a) Proportionate Tax: A tax is said to be proportionate when tax liability i.e quantum of tax increases in same proportion as income increases. Example: Tax Tk.1,00,000 is 10% & on Tk.
5,00,000 is also 10%. That equal Tk.10,000 & Tk.50,000.
b) Progressive Tax: A tax is said progressive when, with the increasing income, the liability not onlly increases in absolute from but also in a progressive way.Example: Tax on total income of taka
1,00,000 & 10% but on Tk. 5,00,000 is 15%. Here taxc rate will increase as sales of income increases.
c) Regressive Tax: A regressive tax is one where rate of tax decreases as the income, poperty, expenditure increases.
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Question: Difference between Direct TAX & Indirect Tax. Answer: There are some basic differences between direct tax & indirect tax tthat are given below:Subject Matters 1)Definition 2) Tax payer 3) Shiftibility 4) Sources of tax 5) Example Direct Tax Direct Tax is one whose incidence rests upon the person who bears its impact also. Direct tax is one which imposed on individual or persons in come . Direct taxs burden cannot be shifted. Direct tax comes from individual person. Example: Income tax. Indirect Tax Indirect tax is one which is imposed on a person or goods but its burden shifted to others. Indirect tax is one which imposed on goods & services. Indirect taxs burden can be shifted from one to another persons goods & services. Indirect tax comes from the final customers for consuming goods & servies. Example: Value Added Tax, Customs, Exercise duty etc. in these case incidence is to shifted.
Chapter-05 Assessee & Residential Status

Question: What is an Assessee? Answer: Generally we can say, assessee means a tax payer, that is a person who is to pay tax. According toIncome Tax Ordinance, 1984: An assessee is a person who is liable to pay for sum under the income tax. According to the section 2(7) of ITO,1984 the term assessee included:1) Every person who required a file or a return under the section (75), section (89), section (91).
2) Every person who desires to be assessee submits his return of income under ITO, 1984. Question: How many sources of income of a assessee? Explain it. Answer: There are seven sources of income of a assessee that are given below:1)Income from Salary, section-21: It means the pay or pable monthly or otherwise. Any payment received from Govt. Recognized providend fund. Any sum of gratuity income of an employee (assessee). it is one of the sources of income of an assessee. 2) Income from interest on securities, Section-22 &23: Interest under this head is taxed on receipt basis. According to Chagla, C.J: Interest on securutues becomes income when it is actually received & not when it is due or capable of being received by assessee. 3) Income from house property, Section:24&25: The owner of house property, legal or beneficial, is liable to pay tax under these section. Income of any residential building building occupied by owner. 4) Income from Agriculture, Section-26 & 27: Agricultural income means any income derived by cultivator from asny land or building in BD & used for agricultural purpose. Income from tea garden, income from sugar mill, income from plantation of rubber & income from tobaco. 5) Income from Business & professions,Section-28,29 & 30: Under section 28 of Income Tax Ordinance, an assessee canearn from buniness & profession: a) Profits & gains of any business or profession carried on by the assessee at any time during the income year.
b) Income deriyed by any trade or professional association or other association of like nature on account of specific services perforrmed for its members. 6) Income fro mCapital Gain, Section-31,32: Capital gain is the excess of sale or transfer price over original cost of capital assets, if such assets are sold or transferred.The income ubnder the head capital gains shall be computed after making the following deduction from full value such as:a) Any expenditure incurred solely in connection with the transfer of the capital assets; 7) Income from others sources, Section-33 & 34: Under this section included that income which are earned through illogical ways such as, smugling, black money & brivery.
Question: What are the income tax rates in bangladesh? Answer: There are several income tax in bangladesh that are given below:1) Incase of Companies: a) Publicly traded companies tax rate is 27.50% b) Non Publicly traded companies tax rate is 37.50% c) Bank & Insurance Companies tax rate is 42.50% d) Telecommunication companies tax rate is 45% 2) Incase of individual: a) On first ---------------1,80,000-------------------0% b) On next---------------3,00,000--------------------10% c) On next----------------4,00,000-----------------------15% d) On next ----------------3,00,000------------------------20% e) Next--------------------------------------------------------25%
Question: Discuss about the types of assessee. Answer: Introduction: Under sectionm 2(46) of the Income Tax Ordinanace, 1984, assessee is classified mainly two types and each has subcatagories that are given below:Types of Assessee
A) On the basis of persons
An Individual A Firm A Company Association of persons Hindhu undivided family Local Authority Artificial juridistion
Non Resident of Bangladesh Resident
B) On the basis of residential status
Non Resident
Non Resident of foreigner
A) On the basis of persons: There are seven types of assessee on the basis of persons as follows:-
a) An Individual: Any person who has to pay interest, tax or penalty under the income tax act.Any person whose income has exceeded minimum taxable limit at present above Tk.1,80,000 b) A Firm: According to income tax ordinance: A firm or a partnership firm must pay government income tax if that firms have assessable income. c) A Company: Firm & company the standing of the location of their mgt. & control during relevaant income year. A joint venture corporation or a company must pay tax to the government on the about 43% on the basis of that companys annual income. d) Association of persons: Association of persons are alos liable to pay government tax if that associations have taxable income. e) Hindhu Undivided Family: These assessesses will be treated as residents in BD. If any part of the control & mgt. of their affairs in the country. Hundhu undivided family may concern
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related to provide income tax if that undivided family has taxable income, hundhu undivided family is also assessable to pay govt. tax. f) Local Authority: Local authority is also liable if they have taxable income. g) Artificial juridistion: The last one assessee on the basis of person is artificial juridistion.
B) On the basis of residential: There are main two types of assessees on ther basis of residential such as:a) Resident: In bangladesh the Income Tax Ordinance, 1984 provides that an assessee may be resident. Individual residing in bangladesh for at least 182 days in income year or 365 days in preceeding 4 years including 90 days in accounting year. The tax liability of an assessee will be determined by his residential status. b) Non Residential: A non residential assessee taxable incoem received or deemed to be received in bangladesh. Taxable income accured or arised in BD. There are tywo types of non residents assesses such as:i) Non resident of banglsdesh: An individual wheather non resident depends mainly on the duration of his stay in Bangladesh. ii) Non resident of foreigner: Taxable income accured or arose or deemed to accure to arise outside of bangladesh that means foreign country.
Question: Define-Income. Answer: The term income has not clearly defined in the ordinance, rather whart to be included & not to be included under the head income has been explained. According to as par Accountants: Income is the excess of the revenue over expenditure. Economists provide definition on income: Income is the excess of closing capital over opening capital. In the conclusion, income means what comes in. Question: How many types of Income?-Discuss it. Answer: There are several types of income that are given below:Classification of Income
Classification of Income
cation of Income A) Non-assessable Income B) Assessable Income

Classification of Income
a
Tax free Income
cation of Income
c
Tax pay Income
Tax credit Income
A) Non-assessable Income: Those income which are not included in the computation of total income of an assessee, are non-assessable income. A list of such incoe is given under section 44(1), part A of sixth schedule. B) Assessable income: Assessable income are those incomes, which are included in the determination of the total income of an assessee. There are three types of assessable income such as: a) Tax free income: Tax free incomes are those incomes, which are included in the determination of
total income of an assessee for computing total income & increasing applicable tax rates.
b) Tax credit Income: Those incomes which are included & increases total income but decrease tax burden through rebate. c) Tax Payable Income: These incomes are that part of total income for which the tax payer actually pays tax. It is always included income but actual tax liability depends on it.
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Taxation

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M M HASSAN-ID NO: 200830082 Asian University of Bangladesh (AUB) dashingmmhassan.2021@gmail.com mmhassan.antor@gmail.com mmhassan.antor@yahoo.

Subject Title: Taxation Chapter: 01

On the Basis of Structure of Tax Rate

Chapter-05 Assessee & Residential Status

A) On the basis of persons

B) On the basis of residential status

Non Resident of foreigner

cation of Income A) Non-assessable Income B) Assessable Income

Tax credit Income

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