11t03t2024

TAX ASSESSMENT OF RENTAL INCOME

Paper presented by:

Ranjan Kumar Bhowmik "*

Former Member
National Board of Revenue

Pres entation outline

D Meaning of house property and property

D Ownership and assessment in case of co-owner
) Annua! Value and allowable deductions therefrom
i Treatment of self occupied property
F Total rental value comPutation
> TDS from rent
F Tax free rental income

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 11t03t2024

Meaning of house property

House property means any building other than

factory building (including furniture, fixture,
fittings which is inseparable from the building)
and land appurtenant thereto owned by the
assessee and rented for commercial or
residential purposes. ..
t'"

Section 35(1) of !T Act,2O23.

Meaning of property

Property means the following which are rented :

/ House property
/ Land
/ Furniture
/ Fixture
/ Factory building
r' Land appurtenant to business
/ Plant & machinery
/ Personal vehicle
/ Any other capital asset

section 35(3) of lT Act,2023

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 11t0312024

Ownership
and
Assessment in case of co-owner

{. The tax on rental income is upon the owner (either legal or

beneficial) and not upon the occupant.
* Where property is owned by two or more persons and their
respective shares are not definite and ascertainable, the co-
owners will jointly be assessed as an Association of Persons
(AoP)
\ I

Section 36(a) of lT Act, 2023.

Self occupied Property

* ln respect of house property, no tax is payable if

the owner occupies the property for his own
residence
or
* for the purpose of his own business.
\
Section 36(2) of lT Act,2O23

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 11t03t2024

Va ! ue

!lncome tax is levied not upon the actual rentalvalue from house
property rather upon the notionalvalue based on annual value,

P Annual value is defined at section 2(621 of lF Act,2O23 as ,The

sum for which the property might reasonably be expected to
let-out from year to year or annual rent shown by the owner
whichever is higher.

) Where the property is let out and the rent is received by the
owner, the annual value may be more than the actual rent if the
reasonable rent determined by the DCT is higher than actual
rent.

re I

Total rentalvalue=
Annual value
+
any advance rent or security money or any money or benefit
received in advance

adjustment of previous advance rent (if any)

vacancy allowance

Note: lf the property remains vacant for a certain period, it must be

notified to the DCT within 30th of every vacant month for availing
vacancy allowance. .\.
o Section 37 ol lTAct,2023

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Allowable deductions
ln computing taxable rental income the following allowances are
deductible from the total rental value as per section 38 of lT
Act,2023:-
L. Repair and maintenance:
Purpose of rent Statutory deduction
1. Where the house property is let 25% of total rental value
out for residential ourposes
2, Where the house property is let 30% of total rental value
out for commercial purDoses
3. where the property is let-out for 10% of total rental value
anv other purpose

lf service charge is borne bv the tenant. then the house owner will
not eet anv statutorv deduction for repair and maintenance in
computing taxable rental income.

Allowable deductions (cond.)

2. tand development tax;

3. Municipaltax;
4. Fire lnsurance Premium,

5. Where the let out property is acquired, constructed, repaired, renewed

or reconstructed with loan from any financial institution then the actual
interest paid during the year on such loan;
6. where the let out property has been constructed with borrowed
capital from financial institution and there was no rental income during
the period of construction, the interest paid during the period of
construction will be allowable in 3 equal installments from first 3 years of
letting out;

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 11t03t2024

TDS from rent/hotel rent

Tax isto be deducted @ 5% at source from any amount of house rent/office
rent/hotel rent etc. as per section 109 and 110 by the following tenants:
1. GO
2. NGO
3. MCO
4. AOP
5. Any authority
5. Body corporate
7' Proiect, program or activity where Govt. has any financial or operational involrr€ment.
8. jV or consortium
9. Company
10, Financiallnstitution
11, Co-op€rative bank
12. Co-operativesociety
13. School, college, institute or Unive6ity
14. Hospital, clinic or diagnostic center
15. Any trust or fund
15. Firm
L7. Any PPP
18. A foreign contractor, foreltn enterprise or an asso€iation or body established outside Bangladesh.

Tax free rental income

Rental income from house property held under trust or

other legal obligation wholly for religious or charitabre
purpose is exempt from payment of tax as per Oth
schedule (part-1) paragraph-11).
However, this provision will not be applicable for NGO.

END OF THE PRESENTATION

6
 Capital Gain Tax

Ranjan Kumar Bhowmik ror^

Former Member
National Board of Revenue

1. Capital and Revenue

Capital is fund and income is the flow of fund. Similarly, capital is wealth and income is the
service of wealth. A stock of wealth existing at a particular point of time is called capital and the
flow of services through a period of time is called income. The distinction between capital and
revenue is of great importance from the income tax point of view, as tax is levied on income not
on capital (except capital gain).

A receipt is not taxable when it is referred to fixed capital but it is taxable as a revenue item when
it is referred to circulating capital like stock-intrade. Circulating capital or stock-in trade is also
known as trading asset and fixed capital as fixed asset. An asset may be the capital asset in the
hands of one person and a trading asset in the hands of other and the nature of receipt may
consequently vary according to the nature of trade in connection with which it arises. The
determining factor must be the nature of the trade in which the asset is employed. The land upon
which a manufacturer carries on his business is part of his fixed capital but the land with which a
dealer in real-estate carries on his business is part of his circulating capital.

2. Basic principles of capital qain

Section 57 of the lncome Tax Act, 2023 provides that tax shall be payable by an assessee under
the head "capital gain" in respect of any gain arising from the transfer (i.e., sale, exchange or
relinquishment, etc.) of any capital asset. Such gain shall be deemed to be the income of the
income year in which the transfer (i.e., sale, exchange, relinquishment, etc.) took place.

Any gain arising from the transfer of a capital asset (both movable and immovable) as defined in
seCtion 2(77) of |TA,2O23 is chargeable to income tax at the rate prescribed at paragraph 1 of the
7th Schedule of the Act.

Capitat Capitat
Capitat Transfer
gain gain tax
asset
[Sate,
[As per [As per
[As per exchange,
sections Para 1 of
section retinquishment]
57, 581 7th
2(77))
[As per section Schedul.el
?(93\1

Similarly, a loss under this section can be claimed only if it is arising from a transfer of a capital
asset and not merely because the capital asset becomes valueless or the earnest money paid by
the intending purchaser is forfeited.

capital Gain Tax Prepared by Ranjan Kumar Bhowmik FCMA Ex-Member, NBR as on 11/3/2024 Page 1
3. Capital asset
A capital gain arises only due to the transfer of capital asset. Capital asset is defined in section
2(77) of lTA2023 where capital asset means property of any kind held by an assessee, whether
or not connected with his business of profession, but does not include-
(a) Any stock-in{rade (not being stocks and shares), consumable stores or raw materials
held for the purposes of his business or profession;

(b) Personal effects, that is to say, movable property (including wearing apparels,
jewellery, furniture, fixture, equipment and vehicles), which are held exclusively for
personal use by, and are not used for purposes of the business or profession of the
assessee or any member of his family dependent on him;
The oains made on the transfer of certain assets which are excluded from the definition of
Capital Asset in section 2(77) of lTA. 2023 do not attract tax.

4. Transfer of Capital Asset

Transfer, in relation to a capital asset or part of a capital asset, as per section 2(93) of 1TA,2023
includes the following:

(a) sale,
(b) exchange or
(c) relinquishment of the asset, or
(d) the extinguishment of any right therein,

But it will not include the following:

a) Any transfer of the capital asset under a gift, bequest, will or an irrevocable trust;
b) Any distribution of the assets of a company to its shareholders on its liquidation; and
c) Any distribution of capital assets on the dissolution of a firm or other AOP or on the
partition of a HUF.

Although the definition of transfer does not include compulsory acquisition of the asset but
provision has been made at section 111 for deduction of tax at source from compensation
against acquisition of property by the Govt.

A sale by the receiver appointed by the Court would be covered by this section. A tease of tand
would be a transfer but the salami or premium paid for the lease is not to be treated as capital
gain rather it would be income under the head 'income from other sources' as mentioned at
section 67(6).

The mere grant of the right of management of a capital asset would not be covered by section
2(93) but it applies even gain arises from the relinquishment of a capital asset. Capital gains may
arise in exchange of property. For example, land is given to a real-estate company in exchanoe
of 2 flats and the land was valued at a higher orice than the cost resulting in increase of wealth.

The compensation received from an insurance company on the sinking of a ship is not liable
to capital gain tax due to the following:

(a) When the ship is sunk and lost, it is not possible to say that it is transferred
(b) The word transfer as per section 2(93) would include cases in which rights are
extinguished either by the assessee himself or by some other agency but not those in
which the asset is merely destroyed by a natural calamity

capitalGainTax PreparedbyRanjanKumarBhowmikFCMA Ex-Member,NBRason ll/3/2024 Page 2

 (c) The insurance money represents compensation for the pecuniary loss suffered by the
assessee and cannot be taken as consideration received as a result of the transfer which
is the basis under section 2(93) for computing capital gain.

But where a capital asset is destroyed by fire and under the insurance policy the burnt or
salvaged property belongs to the insurer, there is a transfer of the original asset in a changed
form and the provision of section 2(93) will attract. Foreign currency is like any other commodity
and when it is converted into Bangladeshi taka it is virtually a sale of the commodity for a price.
Therefore, tax is leviable under section 57 on capital gain arises on the conversion (sale) of
foreign currency held as a capital asset.

i 5. Capital qain tax on shareholders when two companies amalqamate

ln a case where company A amalgamates with and merges into company B and the
shareholders of company A are allotted shares in company B, a question arises whether
those shareholders would be liable to capital gain tax. The answer is no as because capital
gain tax would not be payable unless the amalgamation involves sale or exchange or a
relinquishment of an asset or the extinguishment of any right. lt is clear that amalgamation
would not involve any sale or transfer or exchange either. So, there is no question of gain
tax. The allotment of shares by a company cannot be regarded as a transfer of property by
that company.

lf capital qain arises from anv transfer of capital asset in a scheme of amalqamation then
qain tax will not be apolicable as per Bth Schedule (para-2) of 1TA.2023. But if the
consideration received bv the shareholders of the amalqamatinq companies in anv manner
other than the shares of the amaloamated companv shall be subject to applicable qain tax.

6. Calculation of capital oain from transfer of business JSection 581

Capital gain from transfer of business or undertaking shall be computed after deducting the
following from the full value of the consideration:

[a] The book value of asset minus liabilities as on the date of transfer.

[b]Any expenditure incurred solely in connection with the transfer.

6. Time to recoqnise capital qain

Capital gains are assessable as the income of the year in which the transfer takes place even
though money may be realised later. For determining the year of chargeability, the relevant date
is not the date of the agreement to sell but the date of sale.

8. Computation of capital qain

Section 58 of lTA, 2023 lays down the mode of computing capital gain. The amount of capital
gain is arrived at by deducting two items from the full value of the consideration for which the
transfer is made namely:

(a) Any expenditure incurred solely in connection with the transfer;

(b) The cost of acquisition of the capital asset; and
(c) Any capital expenditure incurred for any improvements thereto.

Capital Gain Tax Prepared by Ranjan Kumar Bhowmik rcua Ex-Member, NBR as on 11/3/2024 Page 3
9. Cost of acquisition

The general principle of computing capital gain is to deduct cost of acquisition from the sales
price. But where it becomes the property of the assessee under a deed of gift, bequest or will or
under a transfer on a revocable or irrevocable trust or on any distribution of capital assets on the
liquidation of a company or on any distribution of capital assets on the dissolution of a firm or
other AOP or the partition of a HUF, the actual cost of acquisition to the previous owner of the
capital asset as reduced by the amount of depreciation, if any, allowed to the previous owner;
and where the actual cost of acquisition to the previous owner cannot be ascertained, the fair
market value at the date on which the capital asset became the property of the previous owner.

Where the capital asset became the property of the assessee by succession, inheritance or
devolution, the actual cost of acquisition of the capital asset to the assessee shall be the fair
market value of the property prevailing at the time the assessee became the owner of such
property. [Section 58(2)]

10. Determination of fair market value

Where in the opinion of the DCT, the fair market value of a capital asset transferred by an
assessee as on the date of the transfer exceeds the full value of the consideration declared by the
assessee in respect of the transfer of such capital asset by an amount of not less than 15% of the
value so declared, the fair market value of the capital asset shall, with the previous approval of the
IJCT, be determined [section 61].

Fair market value is higher DCT will determine

than the consideration by value taking approval
more than 157o from IJCT [Sec 6l(l)
If DCT determines
different value than the
value stated by the
transferor

Fair value is higher than the DCT may offer to buy

consideration by more than the asset as prescribed
25o/o by the NBR [Sec 61(2)

11. Offer to buv the capital assets bv the Government

Where in the opinlon of the DCT, the fair market value of a capital asset transferred by an
assessee as on the date of the transfer exceeds the declared value thereof by more than 25o/o of
such declared value, the DCT on behalf of the Government may offer to buy the said asset in
such manner as the NBR may prescribe [section 61(2)).

12. Tax free capital oain in case of transfer of capita! asset of a firm to a new companv

When capital gains arise from the transfer of capital asset of a firm to a new company
registered under the Companies Act,1994 and the whole amount of capital gain is invested in
the equity of the said company by the partners of the firm, then the capital gain shall not be
charged to tax in the year of transfer [section 61(3)]

Capital Gain Tax Prepared by Ranjan Kumar Bhowmik rcva Ex-Member, NBR as on 1l/3/2024 Page 4
13. Tax rate in respect of capital qain
Capital gain tax is different from regular tax and is prescribed in 7th Schedule of lncome Tax Act,
2024.
Capital gain in the hands of a company other than the capital gain arising out of disposal of share
will be taxed as a block of income separate from other income of the assessee company at a flat
rate of 15% regardless of the period of holding of the asset from the date of its acquisition.
lf the assessee is other than a company and the asset is transferred before the expiry of five
years from the date of its acquisition, the capital gains will be taxed at the usual tax rate
applicable to the assessee's total income including the capital gain. lf the asset is transferred at
any time after the expiry of five years from the date of its acquisition, the capital gain will be taxed
@15Yo. Thus, in short, the rate can be specified as below:

Capitalgain arises to Situation Tax rate

(a) company @ 15o/o

(b) other than company Disposalwithin 5 years At regular slab rate

Disposal after 5 years @ 15Yo,

14. Specia! tax rates on capital qain from sale of shares

As per SRO 196-AlN/lT/2015 dated 30/6/2015, special reduced tax rate is applied on capitalgain
from sale of shares by specified persons as mentioned below:

The following reduced tax rates are applicable on the income earned from transaction of shares
listed in the Stock Exchanges:

sl. Nature of taxpayer's income Tax rate

(a) Any income earned from trading of shares/securities by any Sponsor

Shareholder / Director of a Bank, Financial Institution, Merchant Bank,
5o/o
lnsurance Company, Leasing Company, Portfolio Management Company,
Stock Dealer or Stock Broker Company

(b) Any income earned from trading of shares/securities by any Shareholder

[excluding the Sponsor Shareholders/Directors] having or more shares of
10o/o
/ companies listed at any time during 5%
the total paid up capital of a company
the income year

(c) lf a shareholder is a company or firm 10%

1. ln case of transferring the shares by any sponsor shareholder / director tax will be
deducted @5o/o on the difference between transfer value and cost of acquisition of the
securities as per section 53M of the lTO, 1984.
2. The income from trading of shares of all other type of taxpayers excluding those
mentioned in the above list is exempted from tax.

Sources: ['t] Income Tax Act,2023

[2] Share market related SRO no: 196 dated 301612015

The End

Capital Gain Tax Prepared by Ranjan Kumar Bhowmik rcun Ex-Member, NBR as on 1l/3/2024 Page 5
 lncome Year
&
Assessment Year

Ranjan Kumar Bhowmik rcrrr

Former Member
National Board of Revenue
lncome vear:

[1] As per section 2(15) of the lncome Tax Act, 2023, income year is usually the financial
year immediately preceding the assessment year.

[2] But in case of bank, insurance and non-banking financial institution income year must be
the English calendar year commencing from the lstday of January.

[3] And in case of foreign company including its branch or liaison office the DCT may allow a
similar income year for the purpose of consolidation.

[4] lncome year may be less than 12 months in certain situations especially business
starting, business discontinuance, person leaving Bangladesh, non-resident shipping etc. but
usually it cannot exceed 12 months.

Assessment vear:

Assessment year means the year following the financial year, i.e. income year. Thus, the
assessment year always begins on lstJuly and ends on 30h June every year. This period is
also known as the financial year. Accordingly, it is the current financial year in which income
of the immediately preceding financial year (known as income year) is assessed. As per
section 2(24) of the lncome Tax Act, 2023',the term "Assessment vear" means the oeriod
of 12 months commencinq on the first dav of Julv everv vear. ln case of business
discontinuance, person leaving Bangladesh etc. income year related financial year shall be
deemed to be the assessment year in respect of the income of the broken period.

From the following example, we can see how to find out the assessment year and tax day:

Example

lncome year lncome year Assessment year Tax Day

ended on For company taxpayer
30.06.2023 2022-23 2023-24 15.01.2024
30.09.2022 01l1Ol21 to 3019122 2023-24 15.09.2023
31.12.2022 2022 2023-24 15.09.2023
31.03.2023 01l4l22to 3113123 2023-24 15.10.2023
31.07.2023 0118122 to 3117123 2024-25 15.09.2024

lncome year & assessment year Ranian Kumar Bhowmik FCMA as amended up to 24 /3 /2022 Page ! of 2
 Exceptions to the rule of Assessment Year:
Generally, income is taxed in the subsequent year to the income year. But, in certain
cases, to protect the interests of revenue, the income is taxed in the year of earning itself.
Thus, in those cases the assessment year and the income year may be the same. The
exceptions to the normal rule of assessment year are discussed as under:
tl] lncome of discontinued business [Section 191]: Where any business or
profession is discontinued in any assessment year, the income of the period from the
expiry of the last income year up to the date of such discontinuance may be charged to
tax in that assessment year.
[2] Persons leaving Bangladesh [Section 193]: Whenever any person is leaving
Bangladesh and has no intention to come back, 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 up to the probable date of his departure from Bangladesh.
Here is deviation from the usual practice as the assessment of the broken period may be
completed before the commencement of the relevant assessment year.
[3] Income of non-resident shipping companies [Section 259]: Section 259(2) of the
lTA,2023, provides for the taxation of income of non-resident shipping companies in the
year in which they earn their income in Bangladesh, provided that such companies do not
have any representative here.

The End

lncome year & assessment year Ranian Kumar Bhowmik FCMA as amended up to 24 /3 /2022 Page 2 of 2
Deemed income (lncome from other sources)
Ranjan Kumar Bhowmik FCMA
Former Member
National Board of Revenue

There are some unexplained cash credits, investments, expenditure including possession of money,
bullion, jewellery, etc. with an assessee shall be deemed to be his income under the Income Tax Act,
2023.The deemed incomes have been specified in section 67 of the act.

Unexplained cash credit lsection 67(2)l

Where any sum is found credited in the books of an assessee, maintained for any income year and the
assessee offers no explanation about the nature and source thereof, or the explanation offered is not in
the opinion of the DCT, satisfactory, the sum so credited shall be deemed to be his income for that
income year under the head 'income from other sources".
Unexplained investment/loan/expenditure lsection 67(3)l
Where, in any income year, the assessee has made investment in any asset or took loan or incurred
any expenditure and he offers no explanation about the nature and source of the money for such
investment/loan/expenditure, or the explanation offered is not in the opinion of the DCT, satisfactory,
the amount of the expenditure shall be deemed to be the income of the assessee for such income year
under the head "income from other sources".
Difference between fair market value and price naid asainst acquirinp asset [section 67(4)l
Where any assets, purchased by an assessee and the DCT has reason to believe that the price paid by
the assessee is less than the fair market value thereof, the difference between the price so paid and the
fair market value thereof, shall be deemed to be income of the assessee under the head "income from
other sources".

Goodwill monev. compensation or damages for cancellation or termination of contracts and

licenses [section 67(5)l
Where any amount is received by an assessee during any income year by way of goodwill money or
receipt in the nature of compensation or damages for cancellation or termination of contracts and
licenses, such amount shall be deemed to be the income of such assessee for that income year under
the head "income from other sources".
Salami or oremia receints [section 67(6)l
Where any lump sum amount is received or receivable by an assessee during any income year on
account of salami or premia receipts by virtue of any lease, such amount shall be deemed to be
income of the assessee of the income year in which it is received and classifiable under the head
"income from other sources".
Failure to deduct tax from navment in acquirine asset [section 67(7)l
If tax at source not deducted from payment in acquiring asset, then that payment will be treated as
income from other sources.
Cancellation of indebtedness Isection 67(8)l
Where any benefit or advantage, whether convertible into money or not, is derived by an assessee
during any income year on account of cancellation of indebtedness, the money value of such
advantage or benefit shall be deemed to be the income of such assessee for that income year under the
head "income from other sources" with some exceptions.
Winning from lotteries Jsection 67(9)l
Any amount is received by an assessee during any income year by way of winnings from lotteries,
crossword puzzles, card games and other games of any sort or from gambling or betting in any form
or of any nature whatsoever shall be deemed to be his income for that income year under the head
"income from other sources".
Equitv received from shareholders in cash lsection 67(10)l:

Where a company not listed with any stock exchange, receives paid up capital in the form of cash
from its shareholders during any income year, the amount so received as paid up capital, not being
received by bank transfer, shall be deemed to be the income of the company for that income year
under the head "income from other sources".

Loan received bv anv companv otherwise than bv bank transfer [section 67(11)l:

Where any sum claimed or shown to have been received as loan by any company otherwise than by
bank transfer, the amount so received shall be deemed to be the income of the company for the
income year in which such loan was received under the head "income from other sources".

However, where the loan is paid back in a subsequent income year, the amount so paid shall be
deducted in computing the income in respect of that subsequent year.

Buvins/hirins motor carlieep bv a comnanv [section 67(12)l:

Where any company, purchases directly or on hire one or more motor car or jeep and value of any
motor car or jeep exceeds l0% of its paid up capital together with reserve and accumulated profit,
then 50% of the amount that exceeds such l0o/o of the paid up capital together with reserve and
accumulated profit shall be deemed to be the income of the company for that income year under the
head "income from other sources".

Loan/sift/advance/denosit received bv an assessee other than bank transfer Isection 67(13)l

A loan or gift or advance or deposit of any kind called by whatever name received by an assessee
otherwise than by bank transfer, the amount so received shall be deemed to be the income if the
aggregate amount of such loan or gift or advance or deposit of any kind called by whatever name
received in an income year exceeds Tk.5,00,000/-
Buildins construction material if purchased on credit but not naid back within 2 vears [section
67(l4)l:
Where an assessee, other than real estate company, purchases on credit any building construction
material, the sum or any part thereof which has not been paid back within 2 years from the end of the
income year, the unpaid amount shall be deemed to be the income under the head "income from other
sourcestt.

Showing tax free income or income where reduced tax rate is applicable at revised return u/s
175 or 180 or 212 lsection 67(15)l:
Where an assessee files an amended/revised retum under section 175, 180 or 212 and shows any
exempted income or income subject to reduced tax rate, that income will be treated as "income from
other sources" and regular tax rate will be applicable thereon.

Provided that, in case where banking channel is involved and supporting evidence can be produced in
support of exempted income or reduced tax rate, then the provision of this section will not be
applicable.
 ADVANCE PAYMENT OF TAX

Ranjan Kumar Bhowmik r..r^

Former Member
National Board of Revenue

Advance income tax is the tax which is to be paid by the assessee in advance
either by deduction or collection of tax at source or by payment of quarterly
instalments.

(1) Who is liable to pav advance tax?

Both existing and new assesses are liable to pay advance income tax. In case of
existing assessee if his last assessed total income exceeds TK. 600,000. At the
time of considering last assessed income the following income will be excluded:
[a] capital gain
[b] any one-time income which is non-recurring in nature.
However, any assessee who's only source of income is agriculture and if that
agriculfural income does not exceed Tk. 8,00,000 he will not have to pay any
advance tax. fsection 154]

(2) What is the basis on which advance pavments should be calculated?

In case of existing assessee:

In case of existing assessee, advance tax is to be calculated on the basis of his

last assessed income. If his last assessed total income exceeds Tk. 600,000/
fexcluding capital gain and one-time income. [See-154]

In case of new assessee:

A new assessee who has not previously been assessed shall also require to pay
advance tax if his current year's income fexcluding capital gain and one-time
incomel is likely to exceed Tk. 600,000/ [See.156]

(3) When and how advance tax is to be paid?

Advance tax is to be paid in the following 4 equal instalments on the basis of

financial year for which the tax is payable: [section 155]

Advance Tax prepared by Ranjan Kumar Bhowmik rcua as amended vplo03l7l2l23 based on lncome Tax Act,2023 Page I of2
 I st instalment 15th September
2nd instalment 15th December
3rd instalment 15th March
4th instalment 15th June

(4 Whether withholding tax at source u{ill be]feated as advance tax?

Yes, withholding tax is also to be treated as advance payment of tax. [Sec. 155]

(5) What will happen in case of excess pavment of advance tax?

If the advance tax paid by the assessee exceeds the tax payable by him on
regular assessment, Govt. will pay simple interest on excess payment @l0o/o per
annum to be calculated from l't July of the respective assessment )zear to the
date of regular assessment but not more than2 years. [Section l6l]
(6) Is there any scope to pay estimated amount of advance tax?

Yes, if any assessee feels, at any time during the year, that his tax is likely to be
less than the tax payable as per law, then he may submit an estimate to the DCT
and pay estimated amount of advance tax accordingly. But at the time of
assessment if the DCT found that his estimate is wrong and tax actually comes
higher, then assessee will have to pay simple interest as per section 162.
ISec.l ss(s)]

(7) What are the consequences in case of failure to pav advance tax?

The consequences are as follows: -

I. Assessee will be treated as an assessee in default. [Sec. 157]

II Simple interest @ l0o/o per annum will be chargeable on the

amount falls short from 75o/o of the assessed tax to be calculated
from I st July of the assessment year to the date of assessment but
not more than 2 years. However, the rate of simple interest will be
50% higher if the return is not filed on or before the "Tax day"
[section 162]
III DCT may also impose penalty up to 100% of the shortfall [Sec.26e].

Advance Tax prepared by Ranjan Kumar Bhowmik rcpte as amended up lo 031712023 based on lncome Tax Act,2023 Page 2 of 2
 Penaltv for violation of tax law

Ranjan Kumar Bhowmik r.,nn

Former Member
National Board of Revenue

l.Penaltv for failure to file return [section 266(1)l

Where a person fails, without reasonable cause, to file a retum, the DCT may impose penalty @ l0%
of the tax levied on the last assessed income or Taka 1,000/- whichever is higher and if the failure
continues, the DCT may impose an additional penalty of Taka 50 for every day during which such
failure continues.

However, the amount of this penalty shall not exceed taka 5,000/- in case of an individual taxpayer,
who has never been assessed before.

This penalty shall be 50% of the tax payable on the last assessed income or taka 1,000, whichever is
higher, in case of an individual taxpayer whose income has been previously assessed to tax;

2.Penaltv for failure to file withholdins tax return [section 266(2Xa)l

Where a person, without reasonable cause, fails to file withholding tax return, the DCT may impose a
penalty @ l0% of the tax levied on last assessed income or taka 5,000/-, whichever is higher and if
the failure continues, the DCT may impose an additional penalty of Taka 1,000 for every month or
fraction thereof during which such failure continues;

3.Penaltv for failure to issue tax deduction certificate [section 266(2Xb)l

Where a person, without reasonable cause, fails to issue tax deduction certificate, the DCT may
impose on such person a penalty which may extend to Tk. 5,000/- and additional penalty of Tk.
1,000/- in case such failure continues,

4.Penaltv for failure to furnish information as reouired under section 200 [section 266(2l(cll

Where a person, without reasonable cause, fails to furnish information required under section 200 of
1TA,2023, the DCT may impose a penalty of Tk.50,000 and Tk.500 for every day during which such
failure continues.

S.Penaltv for not maintainins accounts in the nrescribed manner [section 2671

Where any person fails, without reasonable cause, to maintain accounts as per provision of section
72(3) of Income Tax Act, 2023, the DCT may impose penalty not exceeding one and a half times of
the amount of tax payable and in case where income is below taxable ceiling then maximum Tk.
5,000/-;

Where any person deriving income from rent of tangible property fails, without reasonable cause, to
comply with the provision of section 72(3) of the Income Tax Act,2023 the DCT may impose penalty
of 50%o of tax payable or Tk.5,000 whichever is higher.
6.Penaltv for usinq fake Taxpaver Identification Number (TIN) [section 2681

Where any person, without reasonable cause, use TIN of another person or a fake TIN, the DCT may
impose penalty on such person a sum not more than Tk.20,000/-
T.Penaltv for failure to pav advance tax [section 2691

Where the DCT found that any person has, without reasonable cause, failed to pay advance tax in
accordance with the provisions of section 154 of the Act or furnished any such estimate of tax payable
by him under section 155, which to his knowledge or belief is false, he may impose on such person a
penalty not exceeding such amount as is the difference between the advance tax payable by such
person and the tax actually paid.

S.Penaltv for non-com of notices [section 2701

Where any person, without reasonable cause, does not comply with any notice issued by the DCT,
then the DCT may impose on such person a penalty which will not exceed the tax chargeable on his
totalincome.

9.Penaltv for failure to nav tax as per return [section 2711

If the DCT found that any person has not paid tax as required under section 173 of the Act, then he
may impose on such person penalty not exceeding25% of the total tax payable as per return or 100%
of the shortfall as the case may be.

l0.Penaltv for concealment of income lsection 2721

Where, in the course of any proceeding under Income Tax Act 2023,the DCT, the AJCT, the CT
(Appeals) or the Taxes Appellate Tribunal found that any person has concealed his income or
furnished inaccurate particulars of such income or understated the value of any immovable property
with a view to evading tax he shall impose on such person a penalty equal to A + B.

A: evaded taxX l5o/o,

B: evaded tax X l0% X C

C : Total number of years from the assessment year in which the tax evasion occurred to the
assessment year in which the tax evasion was detected.

l l.Penaltv for false audit report sisned bv chartered accountant Isection 2731

Where, the DCT or Additional Commissioner of Taxes (Appeals) or Commissioner of Taxes

(Appeals) or the Tax Appellate Tribunal found that the audit report is not properly certified by the
Chartered Accountant to the effect that, in respect of keeping accounts, preparing statements and
reporting as per Intemational Accounting Standard (IAS) and Intemational Financial Reporting
Standard (IFRS) and auditing as per International Standard of Auditing (ISA); or the report is false or
incorrect, then they can impose penalty of minimum Tk.50,000 and maximum Tk. 2,00,000 upon the
chartered accountant who signs such false audit report.

l2.Penaltv for filine fake audit renort [section 2741

Where, in the course of any proceedings under Income Tax Act, the DCT, or Additional
Commissioner of Taxes (Appeals) or Commissioner of Taxes (Appeals) or Taxes Appellate Tribunal
found that, the audit report is not signed by the Chartered Accountant or is believed to be false, the
said authority or, as the case may be, the Tribunal can impose a penalty of Tk. 1,00,000 on the
concerned taxpayer who prepared fake audit report in the name of CA firm.

l3.Penaltv for default in pavment of tax [section 2751

In cases where a taxpayer defaults or is deemed to be in default in payment of tax, the DCT may
impose penalty up to 100% of the arrear tax.
l4.Penaltv for failine to notifv the DCT within 15 davs of business discontinuance lsec. l9l(4)l

When any business is discontinued, a notice of such discontinuance must be given to the DCT within
l5 days of such discontinuance of the business accompanied by a retum of total income for the broken
period. If the person discontinuing such business fails to give such notice, the D.C.T. may impose
penalty a sum not exceeding the amount of tax assessed on him during the previous year.

lS.Penaltv for non-compliance with notice related to the calculation of arm's length nrice in
connection with Transfer Pricins issues [section 2761

Where any person fails to comply with any notice related to the calculation of arm's length price, the
DCT may impose on such person a penalty not exceeding l% of the value of each international
transaction executed by the person.

l6.Penaltv for failins to keen. oreserve or deliver anv information or document or record
related to international transaction Isection 2771

Where a person fails to keep, preservc or deliver any information or document or record as required
by the Act, the DCT shall impose on such person a pcnalty not exceeding I % of the value of every
international transaction carried out by the person;

lT.Penaltv for failure to submit statements related to international transaction [section 2781

Where any person having intemational transaction fails to submit statements related to the
intemational transaction with the retum, the DCT may impose a penalty not exceeding2oh of the
value ofeach international transaction carried out by the pcrson;

l8.Penaltv for not submittins statement certified hv C hartered Accountant or Cost and
Manasement Accountant [section 2791

Where any person fails to submit a statement certified by Chartered Accountant or Cost and
Management Accountant as required by the DCT in writing, he may impose a penalty not exceeding
Tk. 3,00,000 on such person.

Conclusion:

l.No penalty shall be imposed without giving a reasonable opportunity of being heard.
2.Penalty under section266,275,276,277,278 and279 camot be imposed by the DCT without taking
prior approval from the IJCT.
 Resident vs. Non-Resident

Ranjan Kumar Bhowmik ..tto

Former Member
National Board of Revenue

The residential status of the assessee is to be determined on the basis of tax law. As per section
2(45) of ITA, 2023 a person is considered resident if he fulfills the following conditions: -

sl. Category of Conditions for being resident Analysis

No person
I Individual Stay in Bangladesh for at least The tests of residence here are alternative not cumulative.
183 days in aggregate during Each of the 2 tests requires the personal presence of the
(Bangladesh the income year. assessee in Bangladesh during the income year. If the
lor OR assessee is continuously out of Bangladesh during the
Foreigner) [Stay in Bangladesh for at least whole year, he must be treated as non-resident in that
90 days in aggregate during the year.
income year
+ If the l st criteria of 183 days have been fulfilled, he is to
An aggregate stay of at least be regarded as resident irrespective of any other
365 days in Bangladesh in the consideration. If anybody resides here for less than 90
course of4 years preceding the days then obviously, he is non-resident. Thus, a man may
income year.] be resident in 2 different countries in the same year,
although he can have only one domicile.
2. (i) HUF The control and management If the control and management is situated wholly outside
(ii) Firm of its affairs is situated wholly Bangladesh only then an HUF, firm or other AOP can be
(iii) AoP or partly in Bangladesh during treated as non-resident. Since partial control is sufficient
the income year. for the purpose of residence, a firm may have 2 places of
residence; The residence of partners or individual
members of a HUF is immaterial for the purpose of
determining the residence of a firm or HUF.

The place of control may be different from the place

where the actual trading is carried on. Control of a
business does not necessarily mean the carrying on of the
business and therefore the place where trading activities
or physical operations are carried on is not necessarily thc
place of control and management. Control and
management signify the controlling and directive power
and situated implies the functioning of such power at a
particular place with some degree of performance.

Control and managemenl qean de facto control and

management and not merely the right or power to control
and manage. The absence of the karta from Bangladesh
throughout the year does not by itself lead to the
conclusion that the HUF is a non-resident in that year,
since the business of the family, though it is normally
controlled by the karta, may at a particular point of time
be controlled by some one else. The same principle
applies equally in case of firms and other AOPs.

Resident & non-resident Handout prepared by Ranjan Kumar Bhowmik pcna as amended uptoL2{OL/2O24 Page 1 of 7
 sl. Category Conditions for being Analysis
No ofperson resident
1
J Company The control and A company whether a Bangladeshi company or a foreign
management of its company whether it is registered at RJC of Bangladesh or not is
affairs is situated resident here in Bangladesh if the control and management of
wholly in its affairs is siruated fully in Bangladesh during the income
Bangladesh during year.
the income year.
In
keep house and do business and for the purpose of income tax a
companv resides where it reallv keeps house and does business,
i.e. where the central management and control actually abides.
While the location of control and management is the sole test
of residence for HUF, Firm and AOP, it is also a test for
companies.

Here controls mean de facto control not merellr de jure control.

The control and manasement. the head and brain, does not
reside where there is some ultimate power of control such as
the power to alter the Articles of Associations bv a speqial
resolution or the power to interfere with fundamental finance.

A company may be resident in Bangladesh even though its

entire trading operations are carried out from abroad. If the
management and control is situated here, the company is
resident here and it does not in the least matter where the actual
selling and buying of the goods takes place.

Resident & non-resident Handout prepared by Ranjan Kumar Bhowmik rcua as amended up to t2lOLl2O24 Page 2 of 7
To test residential status of an individual, the following flow chart will be helpful:
Non-resident Non-resident
Bangladeshi (NRB) Foreigner (NEF)
Yes No

ls the assessee is Bangladeshi citieen?

An individual stays
in Bangladesh f or -
Non-resident
lrl o No
I'lo Yes
18 2 days or m ore 90 days or more 365daysormore
duringthe income during the incom e during4 immediate
year? year? preceding years?
YH5 Yes

Resident

Tax Incidence on the basis of residential status:

Section 18 of 1TA,2023 is the charging section where it is clearly mentioned that income tax is to
be charged on total income of the assessee. The liability to tax arises by virtue of the charging
section. The assessment order only quantifies the liability which is finally created by the charging
section.

Here total income as per section 2(78) means total amount of income as referred to in section 26 and
includes any other income which is to be included in the total income of the assessee as per
provision of The Income Tax Act, 2023.

The principle underlying section 3l

is to make the chargeability of income depending upon the
locality of receipt or accrual. Section 31 also deals with the computation of total income by
inclusion, in some cases, of other person's income. Depending on the residential status an assessee
can be divided into 2 categories: -

(i) Resident; and

(ii) Non-resident.

Resident & non-resident Handout prepared by Ranjan Kumar Bhowmik FCMA as amended up to l2lOLl2O24 Page 3 ol 7
The basic difference between resident and non-resident is tabulated below: -

sl. Area Resident Non-resident Analysis

No
I Income The entire amount of income (a) A non-resident, unlike a
The
income accruing or accruing or resident, is not chargeable in
arising in any part of arising in respect of income accruing or
the world, Bangladesh arising outside Bangladesh and not
irrespective of only is received in Bangladesh.
whether it is taxable in (b) If an income is taxed on the
received in Bangladesh. ground of accrual or deemed
Bangladesh or not is accrual, it cannot be taxed again on
taxable in the ground of receipt either in the
Bangladesh. same year or in a different year.
(c) As per 6th Schedule (Part-l)
Para-l7, foreign income of a
Bangladeshi national, irrespective
of resident or non-resident, is
exempt from payment of tax if it
comes through official channel.
2 Tax General slab tax rate is Maximum tax (a) The only exception is non-resident
applicable. rate is Bangladeshi where general tax rate is
applicable. applicable.

(b) If any resident assessee proves to

the satisfaction of the DCT that, he
has paid tax in a foreign country by
deduction or otherwise on any income
which has accrued or arisen to him
outside Bangladesh with which there
is no reciprocal tax treaty, the DCT,
subject to such rules as the NBR may
in this behalf, deduct from the tax
payable by the assessee a sum equal
to the tax calculated on such doubly
taxed income at the average rate of
tax of Bangladesh or the average rate
of tax of the foreign country
whichever is less.
J Investment Investment tax rebate Investment tax The only exception is non-resident
facility is applicable rebate facility Bangladeshi where investment tax
is not rebate facility is applicable like
applicable resident.

Thus, the incidence of tax depends on residential status. A non-resident is entitled to partial exemption from
chargeability to which a resident is not entitled to Generallv qneakino fhe incidence of tax iq hioher in fhe
case of persons who are resident and lower in the case of persons who are non-resident.

Resident & non-resident Handout prepared by Ranjan Kumar Bhowmik rcna as amended up to L2/OL/2O24 Page 4 ol 7
Double Taxation Avoidance Asreement (Sec. 244 & 245):
DTAA is usually an agreement between 2 countries seeking to avoid double taxation by defining the
taxing rights of each country with regard to cross border flows of income and providing tax credits or
exemptions to eliminate double taxation. The Govt. of Bangladesh also may enter into an agreement with the
Govt. of other countries for the avoidance of double taxation and the prevention of fiscal evasion.
International desk of NBR is entrusted to negotiate the double taxation treaty with foreign countries to
promote FDI in Bangladesh. Such an agreement comes into force through notification in the official Gazette.
It will be treated as an intemational law and accordingly its legislative position would be over and above our
Bangladesh tax law.

Resident & non-resident Handout prepared by Ranjan Kumar Bhowmik rcna as amended uptoL2/OL/2O24 Pate 5 of7
 sl. Name of the SRO Date of effect in
No Countries Bangladesh
No. Date (assessment year
commencing on or
after)
I U.K. 227-Lt80 08/07/l 980 0U07n978
2 Singapore 124-L182 2U0411982 01/01/1980
3 Sweden 382-Lt83 t9lt0n983 0U07fi984
4. Korea 433-Lt84 02fi0t1984 0U0711984
5 Canada 247-L185 0610611985 0U0711982
6. Pakistan 221-Lt88 tU07l1988 0l /01/1980
7 Romania 348-Ll88 23fiU1988 0U07n989
8 Sri Lanka 365-Ll88 t0n2lt988 0U07n989
9 France 2-L189 04t0U1989 0U07t1989
10. Malaysia 67-L190 151021t990 0U0Ut982
1l Japan 23s-Lt9t 061081199r 0U07n992
t2. India 45-Lt93 27t02n993 0u07t1993
l3 Germany r-Lt94 0U0U1994 0l/01/1990
t4 Netherlands 267-L194 r4t09t1994 0U0711995
l5 Italy 63-Ll97 r2t03n997 0U071t980
16. Denmark 72-L197 17 t03t1997 0U071t997
t7 China tt4-L197 1310511997 0U07t1998
l8 Belgium I I -Ll98 t4t0U1998 0U0711998
19. Thailand 222-L198 07t09n998 0U0711999
20. Poland 39tLt99 0310311999 0r/07t2000
21 Philippines 56tLt2004 04t03t2004 0t/0712004
22. Vietnam 30r-Lt2004 18n012004 0r/07 t200s
23 Turkey 308tL|2004 3Ur0t2005 0U0712004
24. Norway 20-Lt2006 12t02t2006 0U0712006
25 Indonesia 60-Lt2007 2010412007 0U0712007
26. USA 7r-L12007 t010512007 0U0712007
27 Switzerland 52-Ll20t0 23t02t2010 01107t2008
28 Oman t6-Lt2009 0210212009 0U0712009
fonly air servicel
29 Myanmar 3t3-L/2012 t8lt0l2012 0r/0712012

30 Mauritius 122-Ll20t2 0910512012 0U0712012

31 Saudi Arabia r03-Lt2012 ts/04t2012 0Ut0/2011
32 UAE 313-Lt2012 05109t2012 0U0712012
aa
JJ Belarus 189-Ll20t4 08t07t2014 0U07t2014
34 Kuwait 376-Lt20t8 25lt2lt0t8 0U712019

35 Bahrain 301-Ll20t7 16fi0t20r7 0U712018

36 Bhutan 56-Lt2020 20102/2020 0U712020

37 Nepal 57-Lt2020 20102/2020 0U712020

38 Czech Republic 304-Lt2020 t0ltt/2020 0U7t2021

Resident & non-resident Handout prepared by Ranjan Kumar Bhowmik rcua as amended up ro L2lOLl2O24 Page 6 of 7
 Comparative Rates in Double Taxation Avoidance Agreement
sl. Name of the Permanent Maximum tax Maximum Maximum tax
No Country Establishment rate for tax rate for rate for Royalties
dividend Interest
1 U.K 183 days t0%/rs% 75%tr0% r0%
2. Singapore 183 days t5% r0% t0%
J Sweden 183 days tj%fis% t0% t0%
4. Korea 183 days tj%fis% t0% t0%
5 Canada 183 days rs% t0% t0%
6. Pakistan 183 days t5% t5% r5%
7 Romania 183 days tj%ns% r0% r0%
8 Sri Lanka 183 days ts% t5% r5%
9 France 183 days rU%n5% r0% t0%
10. Malaysia 183 days r5% r5% t5%
ll Japan 6 months tj%lts% t0% r0%
t2 India 183 days tj%ns% r0% t0%
13 Germany 183 days t5% r0% t0%
14. Netherlands 6 months tj%lt5% r0% t0%
l5 Italy 183 days tj%lt5% rj%trs% tj%fis%
16. Denmark 183 days tj%fis% t0% 10%
t7 China 6 months t0% t0% t0%
18. Belgium 183 days rs% t5% r0%
19. Thailand 183 days rj%n5% t0%ns% ts%
20 Poland 183 days rU%trs% r0% r0%
2t Philippines 6 months tj%lts% t5% t5%
22 Vietnam 6 months ts% t5% t5%
23 Turkey 12 months t0% t0% r0%
24 Norway 6 months t0%/15% r0% r0%
25 Indonesia 183 days tj%fis% t0% t0%
26 USA 183 days tj%lt5% t0% r0%
27. Switzerland 183 days tj%fis% t0% t0%
28 Oman Only airlines
29 Myanmar 6 months r0% t0% t0%
30 Mauritius l2 months t0% 0% 0%
3l Saudi Arabia 6 months t0% 7.s% t0%
32 UAE 6 months 5%n0% r0% t0%
33 Belarus 6 months tU%lt2% 7.s% t0%
34 Kuwait 183 days 50hll00h t0% r0%
35 Bahrain 183 days rj%ns% t0% t0%
36 Bhutan 183 days tj%lts% t0% t0%
37 Nepal 183 days t0%/ts% t0% r5%
38 Czech Republic 6 months 10%lts% t0% t0%

Foreign tax credit is to be allowed on doubly taxed income (if any) at the average rate of tax of
Bangladesh or the average rate of the foreign country, whichever is lower. That means such foreign
tax credit shall not exceed the amount which would be arrived by applying the average rate of such
tax to the doubly taxed income.

The End

Resident & non-resident Handout prepared by Ranjan Kumar Bhowmik rcur as amended up to t2l0tl2024 Page 7 ol 7
 Set-off & Carry forward of losses
Ranjan Kumar Bhowmik FCIIA
Former Member
n-ational Board of Revenue

Jll !ntroduction
An assessee may have multiple sources of income. lt is very common that loss will not generate
from each head. Thus, losses from one head may be adjusted with income from other heads so
that net figure results income and tax can be imposed on it. However, if the total income from all
heads results losses, set-off cannot be done. ln such a situation, loss of one year can be carried
foruvard to subsequent year or years for set off.

Set-off and carry forward of losses is practically significant to compute total taxable income and
these are the benefits enjoyed by assessees to cover up their losses before paying taxes to the
government. Set-off means the coverage of loss under one head against another head in the
same year. Carry forward is the transferring of loss of one year to the succeeding year or years
for coverage if set-off was not possible or insufficient. Such set-off and carry forward facility can
be availed upon fulfillment of some conditions. After carry fonruard, losses from any head cannot
be set-off against income from any other heads and losses cannot be carried forward for
unlimited period. This paper presents these two issues in detail.

a) Setoff of losses
b) Carry forward and then set-off of losses

l2l Set-off of losses

Where, in respect of any assessment year, the net result of computation of income under any
head is a loss, the assessee shall, subject to certain exceptions, be entitled to have the amount
of such loss set-off against his income, if any, assessable for that assessment year under any
other head. Loss sustained in any year under one head should be set-off against income under
another head in that year in order to arrive at the true total income of the assessee.

lf after setting off losses against income under the same head the net result is still a loss, such
loss may be set-off against income of the same year under any other head.

The table produced below mav be used as a short-cut ouideline for set-off of losses:

Loss Restrictions to Set-off Ref. section

1. Business loss Set-off is only possible if there is income Section 70(2)
from another business
2. Speculation business loss Set-off is only possible if there is income Section 70(2)
from another speculation business
3. Capital loss Set-off is only possible if there is Section 70(2)
another capital gain during the year
4. Tobacco manufacturing Set-off is only possible if there is income Section 70(2)
business loss from another tobacco manufacturing
business income
5. Loss at tax-free income or Set off not allowed against any income Section 70(3)
income where reduced tax rate
is applicable or loss at any
head where minimum tax u/s
163 is applicable

Set-off & carry forward of losses prepared by Ranjan Kumar Bhowmik rcuA Former Member, N BR as on 16/8 /2023 Page 1
[3] Carrv fonrard of losses lSection 70(5)l
Carry fonruard is the transferring of loss of one year to the succeeding year or years for coverage
if set-off was not possible or insufficient. lf loss at any head cannot be set-off under section 70, it
can be carried forward and set-off against that particular head of income of a subsequent year.
And no such loss cannot be carried forward beyond 6 successive assessment years.
J4l Carrv fonrvard of business loss and unabsorbed depreciation Jsection 70(5) + section 711
lf business loss cannot be set-off under section 70, it can be carried forward and set-off against
the profits of a subsequent year. The right of carry forward of business loss is subject to the
followin g restrictions:
Normally loss cannot be carried forward beyond 6 successive assessment years. However as
per section 71 unabsorbed depreciation allowances can be carried forward to any subsequent
year without any time limit. The unabsorbed depreciation is deemed to be part of the depreciation
allowance for a subsequent year and will enter into the computation of the income of such
subsequent year.
Section 71 requires that losses which have been carried forward from past years should first be
seloff against business profits and if any balance of profits still remains, then unabsorbed
depreciation allowances of past years can be carried forward under section 71(3) for set-off
against such balance of profit.
ln a scheme of amalgamation, the amalgamated company shall have the right to carry fonivard
the accumulated loss and the unabsorbed depreciation of the amalgamating company in the
income year in which the amalgamation took place as mentioned at 8th Schedule (Part-1) Para-3.
ln case of startup sandbox, loss in any growth year can be carried forward up to 9 successive
assessment years as per section 8th Schedule (Part-2) Para-2.

Loss may be carried forward and set-off against the profits and gains of the same business as
that in which the loss was incurred.
The business or profession in which the loss was originally sustained should continue to be
carried on by the assessee in the year in which the carried forward loss sought to be set-off.
The right of carry forward and set-off of losses continues only so long as the business continues.
The right would be lost if the business ceases to be carried on. Therefore, if the business is
discontinued by the assessee, the loss which has been carried forward cannot be set-off against
the profits of any other business even if such other business was also carried on by the assessee
at the time when the loss was incurred. [ClT vs. lnternational lndustries Ltd. [1952] 22lTR 441
The loss can be carried forward and set-off only against the profits of the assessee who incurred
the loss. The person who incurred the loss alone has the right to carry forward the same and the
successor in business cannot claim to carry forward the loss incurred by the predecessor in
business. The only exceptional case is that of succession by inheritance as mentioned at section
70(6) of tT4,2023.

[5] Carrv forward of Partnership firm's losses lSection 70(4) + 70(6]I

ln the case where the assessee is a partnership firm, tax is levied on the firm directly as a distinct
unit of assessment. Any loss incurred by a partnership firm may be set-off during the year by the
firm itself against its income from any other head and unabsorbed loss may be carried forward by
the firm for set-off against its profit in a subsequent year but no individual partner has the right to
set-off his share of the firm's loss against his own income nor he has the right to carry forward his
share of the firm's loss.
Generally, the successor in business cannot claim to carry forward and set-off the loss of his
predecessor. The exception is the case where the succession is by inheritance. The heir would be
entitled to carry forward the loss incurred by the previous owner. The same principle is applicable
for partnership firm also. The firm shall not be entitled to carry forward and set-off so much of the
loss proportionate to the share of a retired or deceased partner.

Sources: [1] lncome Tax Act, 2023

[2] Court case references
The End

Set-off & carry forward of losses prepared by Ranjan Kumar Bhowmik rcua Former Member, NBR as on l6/a/2023 Page 2
 Tax Assessment

Ranjan Kumar Bhowmik n.r,^

Former Member
National Board of Revenue

1. Self-assessment (section 180-182)

A "Self-Assessment Return" filed by a person for any assessment year shall be

deemed to have been completed, if the said return is filed in compliance with all
provisions mentioned at section 169 and tax as per return paid in full. If any return
filed without complying with the provisions mentioned at section 169 shall be
deemed to be an "ordinary return".

After filing the return, if it is found by the assessee himself that proper tax was not
paid due to error in tax calculation or rebate calculation and by so doing less tax was
paid, then the assessee may file an amended return within 180 days stating the
reasons in a written statement paying differential tax plus interest @ 5% per month
on that differential tax before filing such amended return.

Return Processing (section 181)

The DCT may also process the original return or amended return in the light of any
mathematical error in the return filed or any false claim in the light of any statement
or document filed with the return.
If as a result of return processing by the DCT, there is any discrepancy between and
the tax amount shown in the "self-assessment returns" or amended refurn and tax
amount calculated by the DCT, then the DCT may issue a notice to the assessee:
a) informing the assessee about the difference amount of tax;
b) giving an opportunity to the assessee to explain its position about the
additional tax liability arising from return processing; and
c) giving an opportunity of filing amended return adjusting the difference
mentioned in the notice and paying taxes as a result of the said processing.
However, interest will not attract on such delay paymen!

After giving such notice, the DCT shall ensure that

a) the assessee has submitted amended return with short payment of tax
within the date specified in the notice;
b) the difference referred in the notice has been properly addressed in the
amended return.
In case of non-compliance from the assessee side, the DCT will issue demand notice
creating the short payment as demand.

Tax Assessment prepared by Ranjan Kumar Bhowmik rcnrn (as amended up to 241812023) Page I of 6
 Tax Audit (section 182)

a) The National Board of Revenue (Board) or any authority under the Board with
the approval of the Board may, in the manner prescribed by the Board, select
returns for audit and forward the same to the concerned Commissioner of Taxes
for the purpose of audit.
b) The Commissioner of Taxes, within 7 (seven) working days from the date of
receipt of the list of returns selected for audit, shall appoint an inquiry team, audit
team and audit curator for each audit case and all inquiry teams, audit teams
concerned on the date of signing such order will send to the Audit Curator and
the DCT.
c) The DCT shall, within 7 (seven) working days of the receipt of the order under
(b) above issue a notice to the taxpayer informing him about the audit and send a
copy of such notice to the inquiry team.
d) Each audit team will send inquiry report to the DCT within 60 (sixty) days and
send a copy of such report to the Audit Curator. If it is not possible to submit
inquiry report within 60 days, then the concerned team may apply for time
extension and the DCT may extend the time up to 60 (sixty) days.
e) After submission of the inquiry report, audit team will proceed as per audit
manual as prescribed by the Board.

0 The audit team shall submit the draft report to the assessee and will invite written
explanation.
g) The audit team shall submit the audit report to the Audit Curator within 300
(three hundred) days.

h) The Audit Curator, within 7 (seven) working days of the submission of the report
by the Audit team, will recommend to the Commissioner of Taxes for completion
of the audit proceedings and authorize the DCT to carry out the audit.
i) The Commissioner of Taxes, on receipt of the recommendation from the Audit
Curator, shall take an appropriate decision within 7 (seven) working days.
j) Within 7 (seven) working days after receiving approval from the Audit Curator,
the DCT will send the audit report to the taxpayer and send a notice requiring the
taxpayer to file revised return reflecting the findings of the audit and requesting to
pay the required taxes and conduct any other course of action as recommended by
the Audit Curator.
k) If the revised return is filed by the assessee and if the DCT is satisfied that the
findings mentioned in the audit report are duly reflected in the revised return, he
may accept the revised return and send a letter to the taxpayer stating that the
audit has been completed.
l) Where after notice as in O above no revised return is filed or the revised return
which has been filed does not reflect the results of the audit, the DCT may assess
the tax based on the audit report at his best judgement.

Tax Assessment prepared by Ranjan Kumar Bhowmik rc,n (as amended up to 241812023\ Page 2 of 6
 m) No tax shall be assessed under clause (k) above unless
i) the investigation and audit phase ends;
ii) the taxpayer is notified about the audit report; and
iii) the taxpayer fails to file the revised return in compliance with the
notice sent is in clause fi) above.
n) No return or amended return shall be selected for audit under (a) above, if return
(other than return of banks and financial institutions) or amended return shows at
least 15% higher income of the immediately preceding assessment year and such
return or amended return fulfilled the following conditions:
i) return is accompanied by evidences in support of any tax exempted
income;
ii) return does not show any gift;
iii) return does not show any tax exempted income tls76;
ir) return does not show any refund;
(v) In case of company tax payers, it has filed the return of withholding tax
uls 177 and complied with the provisions of tax deduction.

2. Assessment on the basis of correct return (section 183)

Where in the opinion of the DCT normal return or revised return submitted by the
assessee is correct and complete in all respect, then he shall assess total income on
the basis of that return and communicate the assessment order within 30 days from
the date of such assessment. The following are the restrictions to do assessment
under this section:
i. Return must be filed within the prescribed time;
ii. Tax as per return shall be paid before submission of return;
iii. Such return does not show any loss or lesser income than the last
assessed income.
iv. Assessment on the basis of such return does not result in refund.
v. TIN must be mentioned at such return.
3. Best Judsement Assessmen!{seetiou lE4)

Where any assessee fails to file return required by a notice u/s 1721212 and has not
filed any revised return luls 175 or failed to comply with the requirements of notices
u/s 183(3), 183(5) or 193, the DCT shall assess income to the best of his judgment.

4. Provisional Assessment (section 185)

The DCT is empowered under section 185 of lTA, 2023 to make provisional
assessment in a summery manner-
i. On the basis of return and statements, where return has been filed (after
allowing tax depreciation as per 3rd Schedule and also after setting off any
loss carried forward); or
ii. On the basis of readily available information or on the basis of best
judgement, where no return has been filed.
Tax Assessment prepared by Ranjan Kumar Bhowmik rc*^ (as amended up to 2418/2023) Page 3 of 6
 As the name indicates that it is not final, just an assessment done provisionally to
collect tax before regular assessment. There shall be no right of appeal against
provisional assessment. Rather all penal measures can be enforced to recover tax as
per provisional assessment.
5. Assessment of Partnership Firm (section-187+188+189)
Like other category of assessee, DCT will assess the income of the partnership firm
and determine the tax payable thereon by the firm. He will also apportion the after
tax profit among the partners. (Section-187)
If DCT found at the time of assessment of a firm that a change has occurred in the
constitution of the firm, the assessment shall be made on the re-constituted firm but
the conditions are:
(1) Income will be apportioned between those partners who were partners
during the income year.
(2) When tax assessed on any partner is not recoverable from him it will be
recovered from the re-constituted firm (Section-188(2). If it is found at the time of
assessment of a firm that a new firm has been constituted to succeed the previous
firm, DCT will make 2 assessments one for the predecessor firm and the other for the
successor firm. (Section- I 89)

6. Assessment in case of succession of business otherwise than on death (sec. 190)

Where any person carrying on business has been succeeded otherwise than by death
by another person, the predecessor shall be assessed for the period up to the date of
succession and the successor shall be assessed for the period after the date of
succession. Provided that-
(l) Where the predecessor cannot be found the assessment shall be made on
the successor
(2) Where tax is not recoverable from the predecessor it is to be recovered
from the successor who shall be entitled to recover it from the
predecessor.

7. Assessment in case of discontinued business (section 191)

When any business is discontinued, a notice of such discontinuance must be given to
the DCT within 15 days of such discontinuance of the business accompanied by a
return of total income for the broken period. If the person discontinuing such
business fails to give such notice, the DCT may impose penalty a sum not exceeding
the amount of tax assessed on him during the previous year.
8. Assessment in case of person leaving Bangladesh (Section 193)

Whenever any person is leaving Bangladesh and has no intention to come back, 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 up to the probable date
of his departure from Bangladesh.
Here is deviation from the usual practice as the assessment of the broken period may
be completed before the commencement of the relevant assessment year. One
important thing to note here is that, the assessee is entitled under the law to get at
least seven days' time to file his refurn and statements of income.
Tax Assessment prepared by Ranjan Kumar Bhowmik rcvn (as amended up to 24/812023) Page 4 of 6
9. Assessment of deceased person (Section- 194)

Whenever any person dies, his executor, administrator or other legal representative is
liable under the law to pay out of the estate of the deceased any tax 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 representative is limited to
the extent to which decreased estate is capable of meeting the liability.

Legal representative shall be deemed to be an assessee for this purpose, provided a

notice is given to him as per section 194(2).

10. Spot assessment (section 195)

Where an assessee who has not previously been assessed but has taxable income or
has compulsion to submit return or has compulsion to comply with any requirement
of tax law or fails to comply with any requirement of tax law, the DCT may fix tax
on the spot if empowered by the Commissioner of Taxes.

1 1. Escaped Assessment (section 212)

The following situations shall be deemed to have escaped payment:

l. The income or any part of income has escaped assessment
2.The income has been under assessed
3. Excessive loss, relief, deduction or allowance in the return has been claimed
4. Tax liability has been shown or computed lower by
[a] Concealment/misreporting of any income
[b] Concealment/misreporting of any assets
[c] Concealment/misreporting of any expenditure
[d] Concealment/misreporting of any particulars at ITI0B or ITl0BB
l. Income has been under assessed or has been assessed at a lower rate than due tax rate
2. Taxable income has been shown as tax exempted income.
3. Excessive depreciation allowance or any other allowance has been claimed
4. Tax has been paid or computed lower than due amount by reason of lower tax base
Preconditions:

i) Section 212 can be initiated by the DCT if he has reason to believe that any
sum payable by an assessee has escaped payment.
ii) Before initiating the proceeding under section 212 previous approval in
writing from the IJCT is to be taken, except in a case where a return has not
been filed.
Notice under section 212 can be issued:
(1) At any time where no return was filed and no assessment was made.
(2) Within 6 years from the end of the assessment year where assessment for that
year has been completed.
(3) If an assessee conceals any assets which he acquired before 6 years then the DCT
will deem that the asset is acquired in the 6th year and issue notice accordingly.

Tax Assessment prepared by Ranjan Kumar Bhowmik (as amended up to 241812023) Page 5 of 6
'cn'n
a
J Assessment in case of minor. lunatic. idiot. beneficiaries of anv trust (sec 252(4))

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
livable 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 Words, receiver or manager will be brought
to tax through the Trustees, Court of Words, receivers or manager.
4. Assessment of non-resident shinping business (Section 259)

If any Ship calls on any port in Bangladesh, the aggregate of the receipt arising from
the carriage of passenger, livestock, mail or goods shipped at the port since the last
arrival of the ship or at any port outside Bangladesh for which amount is received or
deemed to be received in Bangladesh shall be treated as income received in
Bangladesh and in this case tax rate will be 8o/o (usually tax rate is 4%o in case where
there is a double taxation avoidance agreement with the country the ship is
originated).

5. Assessment of non-resident airlines (Section 260)

If any foreign aircraft calls on any airport in Bangladesh, the aggregate of the
receipts arising from the carriage of passengers, livestock, mail or goods loaded at
the said airport into that aircraft shall be deemed to be income received in
Bangladesh and in this case tax rate will be 3Yo (usually no tax in case where there is
a double taxation avoidance agreement with the country the aircraft is originated).

6. Bar to raise question against assessment (Section 196)

Notwithstanding anything contained in any provision of the Income Tax Act,2023 or

any other law of the country, no authority other than the tax authority, Taxes
Appellate Tribunal and Bangladesh Supreme Court shall have right to raise question
against any assessment done as per Income Tax Act,2023.
Ifany adverse action is taken violating the above law, it shall be null and void and
will have no legal effect.

The End

Tax Assessment prepared by Ranjan Kumar Bhowmik ecme (as amended vp to 2418/2023) Page 6 of 6
DEDUCTTON/COLLECTTON OF TNCOME TAX AT SOURCE

a -+ $

Paper presented by:

Ranjan Kumar Bhowmik rcro

Former Member
National Board of Revenue

PRESENTATION OUTLINE

.l.Area of TDS
.t Reference sections and rules
.f.Rate of deduction/collection of tax at source
*Name of the deducting/collecting authorities
*Time frame within which deducted tax is to be deposited
{. Conseq uences of fai I u re to ded uct/collect/deposit
*Submission of monthly TDS return

1
 Table of TDSfl-CS
st. Head Sec. Rale of Oeduction Deducting Authority
no
1 Employment 86 Average rate Employer.
lncluding Govt. salaryl
Employer will not deduct tax
at source or will deduct tax at
) a lower rate/amount in case
an employee can produce a
Govt. employee certificate issued bythe DCTto
himself
do so. [Section-86(5)]
will deduct tax trom
his monthly pay bill

2 MP Honorarium 87 Average rate Parliament secretariat

3 WorkerWelfare Fund 88 Employer.

Table of TDS

Head Reference Base amount Rate Deducting Authority

zContract q GO
4la) Sec-89 to Tk. 50.00,000/- 3'/o o NGO
-Supply & o MCO
.Manuracture, Rule-3 of lf> Tk. 50 lac but <= Tk. 2 crore 5o/o tr AOP
paocess ol o
TDS
Rules.2023
lf > Tk2 crore 1o/o o gody co@rdc
,Printing, o Prcjd. prolr.m o. divity
packaging or Soru &n. ha any
binding Minimum tax u/s 163 fn.rcid orotsdlon.l

>tf imported goods arc sppllld then: Comp.ny

Single TOS @ 2% for
cement industry, iron Fomula is &A
Crtsralv. b.nUtaiety
industry, iron product B= Til to be deduct€d as per this secton
$hol, collq.. lndiluteor
industry and Ferro alloy A=TDS at impon stage u/s 120 Univcrtity
prcducls. Supply of Horpilrl, clinlcor
[2] Single TDS @ 0.50o/ofor goods means diagnodiccantar
MS Billets and lo.llly procured >lfBpods aE supplled on whlch tax Anytruiorfond
MS S.6p. >ateu@ pald ry's 94 then : transfer of the P.dn.BhlpFlm
[3] Single TDS @ 2% for Fomula ls &A right of goods
Supply of rice, wheat etc. A br.6n contrdor.
B=dealer price x 7% x 5% by way of torclgn onLaprlc or an
[4] Single TDS @ 3olo on A=dealer price r 5% r 5% sale or ..reidiono? Hy
supply of books
cd.blirhcd od.idc
[5] Single TDS @57. on exchange Aingl&rh.
supply oltrading goods to a including sale Hotel. rsi. community
tradea under hire c.nt r, tr.nspn €.ncy
[6] Single TDS @4olo on .nd e@mmrc.pldorm
supply of industrial raw r
purchase havlng ann!al tuanovGr
crcding Tk. I c6rc
agreement or Any .dlfici.ljuridic.l
m Single TDS @10Yo on finance lease
supply of toblcco prcduct
[8] Single TDS @3ol. on
supply of extra high voltage 4

2
 Ta b le of TDS/TCS
st. Head Section / Rule Rate of
No. Deduction
4(b) (a) Oil supplied by oil marketing company Section 89 0.60%

engaged in marketing of petroleum oil +

and lubricant Rule-3 of TDS
Rules,2023

(b) Oil supplied by dealer or agent of oil 1Yo

marketing company

Tax need not to be deducted rrom the bill of

petrol pump station

(c) Oil supplied by Oil refinery 3o/o

(d) Gas supplied by Gas transmission 3Yo

company to gas distribution company
(e) Gas supply by gas distribution 3Yo
company

SL Head S€c. Rate of deduction

5 Setuices Rate of Sefri.6 Rate o,
deduction

^6 baI are
at blll amount th€n TDS wlll be the
tha followlng two:
tea
9ilrce, erylcg
1. 10 on commission
Coll<tlon& isovery *ilke, Piivlte
writy *oke, Marpowcr supply,
2. BxCxDwhere
B=Gross bill
Oeltive iEdia *dice, Publlc iclatlon
crukc, Evot management, Tninin& C-10% for Sl. 3
oBrnizatlon, Courier Eryia6, P6.klnt and
& shlftlng swice, and lny other .no 4

(a) @mmission or fee taa 8. Credit Etint reNi(e 7CA

Gro5s bill 7A
4. 8A
(a) commi$ion or fe tai 10. luvtte @ntahs Pon o. EA
0.6s./
do.lyard e,vk€

6. Metirt tee5, tninitrg feJ or 7ea 12. ope6tign

honmdum (a) commlsion or Ie LorA
(b) grors bll 5%

7, Mobile network operato., I?A l3.Vehlcle rental servlce or ride sharlnt 5.A
t4hni6l supponieniae provider or service
reNke 14. Wheeling charge for electrlcity ?A
dcliv€ry agentg engaged in mobile trans6isslon
bankirg opeEtions tea

3
 Table of TDSfl-CS
SI Head Sec Rate of Oeduction Deducting Authority

6 -Royalties The following specified persons

10y.
-Franchise trGO
Fees for using
tr NGO
.License
.Brand name does not exceed
O Any authority
. Patsnt Tk.25,00,000 tr Body corporate
g Prcject, program or activity where Govt. has
.lnvention
12"L any financial or operational involvement.
.Fomula
.Prccess O JV or consortium
zUqthod lf the base amount o Company
zDesign erceeds O Financiallnstitution
.P.ttem Tk.25,00,000 o Co{perative bank
,Know-how tr Co{peratiYe society
zCopyright tr School, college, institute or UniveBity
.Trademark tr Hospital, clinic or diagnostic center
.Trade name fl Any trust or fund
.Literary, musical or
artistic composition
Q Fim
, SUryey
O Any PPP
.Study El A foreign contractor, foreign enterprise or an
.Forecast association or body established outside
Bangladesh.
.Estimate
zCustomer li3t O Any artificial juridical peEon not covered
above
.Any other intangibles

Table of TDSfl-CS
st. Head Sec. Rate of Deduction Deducting
No. Authority
Oiract advertisement to oGo
7 92 5% A NGO
newspaper, magazine or
private TV channel or private O CmFny
radio station or any web site Minimum tax u/s 163 ohk
(including airtime purchase of
private television channel, private
radio slation or such web site)

6 ActorActress 93 't0% Program producer

Distributorship Commission 10% on di*ounl, @mmission, fees, dealer's prcmotional Company

9 94 chaqes or any other paymenl €lled by s,halevername.
lfany company Fl13 its produdsto its distribuiorsata price
lowerth.n MRP,then @5% on DPxS%.
1.5% from the p.yment in relationto the promotionofthe
companyor itsgoodsto anyperen €ngag€d in th€
disrribution/marketingof the goods of th€ comp.ny.
Minimum tax u/s 163
However in case of cigaren€th€ rate would be 3% of the
differenc€beM€en th€ DPand MRP

Travel Agency 0.30%on lhe total value of lhe tickets or any charge for Airlines and
10 95 erryang €rgo (excluding embarkation fees, traveltax, flight
Commission safety ansurance, securily tax and airport tax)
GSA
+
TDS on incentfo. bonus, pcrfo.manccbonusot anyothar
bcncflt@lled by whata.rn.m.will h.v.to bc oldlat.d
applying a ,ormul.
(A divid.d by B) x c
A=ln@ntivebonus
B=commissid ordis@unt and c=o.ffi
8

4
 Table of TDSI-CS
st. Head Se Rate of Deduction Deducting
No c Authority

11 UC commission 96 5o/o Bank

12 Local UC 97 3% of the amount paid or credited in relation to purchase of Bank

'goaids
for the purpose of trading or of reselling after process
or
or conversion
Financial
1yo_ of the amount paid or credited in relation to goods
irivoiced to a person under a flnancing arrangement.
lnstitution
procurement of rice, wheat, potato, onion, garlic,
chick peas, lentils, ginger, turmeric, dried chills,
pulses, maize, coarse flour, flour, salt, editable oil, sugar,
black peeper, cinnamon, cardamom, clove, date, cassia
leaf, computer, computer accessories, jute, cotton, yarn and
all kinds of fruits.
13 License fee or 98 10% Mobile
other fees paid by phone
mobile company
phone company
to regulatory
authority

Table of TDS/ICS
sl. Head Sec. Rate of Deduction Deducting Authority
no
14 LIP Bonus 99 5% Life insurance company
[However TDS will not be
applicable in case of death
of such policy holderl

15 lnsurance 100 5% lnsurance Company.

Commission paid to [At the time of payment or
agent of insurance at the time of credit
company whichever is earlierl

16 Surveyor of General 't 01 15% General lnsurance

lnsurance lAt the time of paymentl Company.

Minimum tax u/s '163

10

5
 Table of TDSfl-CS
sl. Head Sec Deducting
No. Collection Authority
17 Bank lnterest 102 I lf the payee is a company 20% Any bank/
Financial
2 lf the payee is a person other than a company 100h
lnstitulion
3 lfthepayee is a public university, or MPO enlisted 10%
educational institution,, or ICAB, ICMAB or ICSB

Final settlement of tax liability

(
4 lfthe payee is recognized provident fund, approved 5%
gratuity fund, approved superannuation fund or
pension fund

18 lnterest on 103 10o/o Post

post office Office.
savings bank

19 lnteresl on 104 10o/o Anybody

private loan who is
lother than loan paying
from bank or interest on
Newly inserted at
financial private loan
lncome tax 4ct,2023.
institutionl

11

Table of TDS/fCS

st. Head Sec

No

20 105 'l0Yo
savings
instrument [But the rate would be 5% if total investment does
not exceed Tk.5,00,0001 [SRO no 264 date 25181191
(1) Not applicable on wage earner:s'development
Minimum tax u/s 163 bond,
+

(3) TDS @10to will also be applicable on interest

on savings instruments purchased by any Fund.

12

6
 Table of TDSfl-CS
sl. Head Sec. Rate ot Deduction Deducting Authority
no

21 lnterest on securities 106 SYo Any Person responsible for

issuing such security.

22 Discount on 107 Applicable highest rate Any Person responsible for

discounting the bill.
Bangladesh Bank Bill

23 IGW Service on 108 7s% Tax to be deducted from IGW

lnternational phone call by Bank

7.5% Tax to be deducted from

ICXANS by IGW

7.5% ln case of outgoing

international call the ICX/ANS
company shall deduct tax
@7.5% on the whole amount
so paid.

13

Table of TDS/ICS
st. Head Sec. Rate of Deducting Authority
No. Deduction/Collection
24 House rent, 109 5% The following specifiod peBons
tGo
Hotel rent, Guest i] NGO
house rent, rent o Mco
of vacant land, tr AOP
trAny authoriiy
Water body O Body corpoEte
O Prciect, prcgnm or activity where
or Govt. has any tinancial or opoEtional
plant & involvement.
El JV or consortium
machinery O Company
fl Financial lnstilution
fl Co{peEtive bank
El Co-pentivo rociety
O School, college, inltitute or UniveEity
El Hospitel, clinic or daagnostic center
O Any trust orfund
O Firm
f Any PPP
f A foEign contnctor, foEign
entoapdse or an a3socialion or body
established outEidc Banglade6h.
O Any anificial juridical peBon not
covered above

74

7
 Table of TDS/ICS
sl. Head Section / Rate Deducting Authority
No. Rule
The following specified peEons
25 Rent of conference 110 5% oGo
hall, convention O NGO
o Mco
center, community O AOP
center, room, hall, O Any authority
O Eody corpontc
hotel or restaurant O Pojed, p.ogEm or activity whcc Goff. has
any financial or operational involvGm6nt.
o JV or consonium
O Company
O Fin.nciallnstitution
O Co{peralivc bank
O Co{p€dive sociaty
O School, collcgs, instilute or Univ.Bity
O Hospital, clinic or diagnostic ccnter
tr Any trust orfund
O Fim
trAny PPP
trA foeign contEctor, focign cilcapdse oran
a3soci{ion or body e*blirhcdoftid.
Bangladcsh.
O Any anmcialjuridical pe6on not covercd above

15

Table of TDS/TCS

st. Head Sec Rate ot Deductionrcollection Deducting

No Authority
26 Compensation paid 111 of deed value at city corporation,
60lo
against land Pourashava and cantonment board area
acquisition
So,6 Ot oeeo value in other area
Minimum tax u/s '163

27 Export Cash 112 10o/o Bank

lncentive Minimum tax u/s 163
+
Final settlement of tax

28 Freight foMard 113 15% on commission Person

agency commission responsible
for making
Minimum tax u/s 163 such
payment.

16

8
 Table of TDSfl-CS

st. Head Section Rate of Deduction/ Deducting

No. Collection Authority

29 '|.14 6Yo PDB

30 Signing money 115 15% Real estate

paid by real estate developer developer
to land owner company

31 Foreign Buyer's Agent 116 10% Bank

L7

Table of TDSfl-CS
sl. Head Section Rate of Deduction Deducting Authority
No.

32 Cash Dividend 117 lndividual @ 10% Company.

llf there is no TIN then the rate is15%l
Minimum tax u/s 163
Company @ 20%

)
@g
[However TDS will not be applicable to any distribution of
dividend to a company if such taxed dividend enjoys tax exemptionl

33 Lottery ''t'1 8 20Yo Person

responsible for
Minimum tax u/s 163 such payment.

18

9
 Table of TDS/TCS
Head of
sr
d€dudion
S(. List of seruices and Ete of deduction/provision
34 Non rBident 119 Head ol payment Rate Head of payment Rate

lnterest 2ea ceniti.ation, ratinBet.. zea

Advertisement making LSOA Charte or.ent for stellhe, ainime o, m%
TDS underthis frequency
Advenisement broadcastint 2e,4
section will be Contrador or sub-contrador of 7.5.A
Advisory or aonsultancy seryice 2ea manuladurin& process o, aonve6ion
deemed to be the
Air transpoft or water transpon not 7.5.A Supplier 7.3.A
minimum tax and covered u/i 102 or 103A
shall not be Arahitedu.e, interaor d6ign or 20.a Mrnatement ieruice includint event 2e,1
subject to refund landscape derign manaSement

or set-off or Anist, sinter or player 30.a ln5uranae premium LcfA

adjustment capital taan t5.,4

comnission 2ea
Letal seNiae 20f,4 Dividend-
(a) Conpany-- 2ea
Maahinery rcnl LS% (b) Other than company........,.. 3ea
Salary or iemuneration 3ea
However TDS will
Pre {hipment inspection reilice 2e/6
not be applicable in suryey torcoal. oil orgas exploralion s.zs"a
case of outward Profestional / technical eNia€5 2ea
Fs or suNeyoE ofgeneEl insurcnce 2ea
remittance of the aompany
following:
Royalty, license or payment related 2ea Erplo.ation ordrilling in petroleum 5.25%
['l]Arbitration fee to intangiblg operctions

[2] Haj remittance Bandwidth payment Le,4 Anyreili.e ror maklnS.onnectivity s.25%
[3] Priority pass be&ecn oil ortaifield and hs expofr
Any other payments
point
zea
19

Table of TDSI-CS
Sl. No Head Sec Rate of Deduction Deducting
Authority
35 lmport 't20 Usually 5% Customs
Commissioner
But in €se of raw material import of cement industry the rate
Minimum tax u/s 163 is 2% and there are also some reduced rates for partacular
items

36 Manpower 't21 1Oo/o Bureau of

on per head seruice charge Manpower.
Minimum tax u/s

37 c&F 122
10o/o Customs
Agency Commissi
commission oner
Minimum tax u/s 163
t

20

10
 Table of TDS/ICS
sl. Head Section Rate of Deduction/ Collection Deducting
No. / Rule Authority

38 Export 123 1% Bank

Minimum tax u/s 163 How.vai XBR ia3 powca b l33ua non-rcS oi
las3-Ds cadticaE to lha axPnar againit
appllcallon It th. lncomc ot lh. expo&r lB
tully o. prnly Ex-ti4.

39 Service 124 10% Bank

charge on
services However the rate would be 7.5% if the remittance has been
provided by reeived as considerataon for contract, manufacturing, proess
or conversion, civil works, construction. engineering or for
a resident to similar works.
any foreign
person
Minimum tax u/s 163

27

Table of TDS/TCS
SL Head Section Rate of deduction/provision
40 sale of land t25 Different rates depending on the area of Dhaka and Chittagong. Rate
of for commercial and residential land and building is also different.
land & building

within the .iurisdiction of RAJUK and cDA except areas in schedule (a) and (b)
\63 8% of the deed value
ule
\a*
61 within the ,urisdiction of Gazipur, Narayangonj, Munshiganl, Maniktoni,
Narsingdi, Dhaka and Chittagong districts (excluding RAJUK, CDA and Dhaka
both City Corporation areal
6% of the deed value

) Areas within the iurisdiction of Paurasahova of any district headquarter

5% of the deed value

Areas of any other Paurasahova

Deductinq Authoritv: 4% of the deed value
Sub-Reqister
Other areas not specified in schedule (a), (b) and (cl
2% of the deed value

22

11
 Table of TDSI-CS
st. Head Section Rate of Deduction Deducting
No. Authority
41 Real estate 126 Tk. 1600 orTk. 1,500 orTk.1,000 or Sub-Registrar
business Tk.700 or Tk.300 per square meter for
residential building or apartment depending
on the area
Minimum tax u/s 163
Tk. 6,500 or Tk. 5,000 or Tk.3,500 or
Tk.2,500 or Tk.1 ,200 per square meter for
commercial space depending on the area
Land 126 5% of the deed value of land at any area
developer of Dhaka, Gazipur, Narayangonj,
Munshugonj, Manikgonj, Narshindi &
Chittagong district .

Minimum tax u/s 163

3% in other district

23

Table of TDSfl-CS

st. Head Section Rate of Deducting Authority

No. Deduction

42 Commission on Govt. stamp, 127 10o/o Any person responsible for

court fee, cartage paper paying such commission
Newly inserted at
lncome tax 4ct,2023.

43 Registration of leasehold 128 4% Sub Registrar

property I

#€
to be paid
by the
lessor

Minimum tax u/s 163

44 Hand made Cigarette 129 10ok on Post Office

banderole

24

12
 Table of TDSfl-CS
sl. Head Sec. Rate of Deduction/Collection Deducting
No. Authority
45 Brick Field 130 Tk. 45,000/- for one section The assess will pay
tax him$lf and thc
DCT will verify il.
Tk. 70,000/- for one and half section

Tk. 90,000/- for two section certmqaE igsued by

the DCT, DC ofrice
will not give
Tk. 150,000/- for automatic brickfield rcgistration and
renewal tg operate
brick field.

46 Trade 131 Tk. 3,000/- for Dhaka & Chittagong city City Corporation,
License Pourashava
corporation
Renewal
Tk. 2,000/- for other city corporation
Tk. 1,000/ for pourashava at district
headquarters.
Tk. 500/- for other pourashava
47 Shipping 132 5o/o Customs
Business of of total freight recerved/receivable in or out of Commissioner
a resident Bangladesh
(if service rendered between 2 or more forsign countries then the
Minimum tax u/s 163
rate is 3%).

Table of TDS/I-CS
sl. Head Section Rate of Deduction/ Deducting
No. Collection Authority

48 Public Auction 133 10% oGo

( in case of tea auction the
tr NGO
rate is 1%)
O Any authority
O Corporation
o Company
B Bank
E lnsurance
49 Capital gain from transfer of shares '134 15% RJSC
of private limited companies Newly inserted at will ensure tax
deduction where
Minimum tax u/s 163 lncome tax 4ct,2023.
appliGble

50 Capital galn from transfer of shares 135 5o/o DSE & CSE
by sponsor shareholders and

51 Transfer of Share of Shareholder of 136 15% DSE & CSE

Share house 137 0.05% on transaction DSE & CSE

value

26

13
 Table of TCS
Serial Description of the vehicle Rate of
No. deduction
01. 8us having seats exceeding 52 t6,w0l-
02. Bu, havin8 seats not exceeding 52 LL,5f,J.I-

03. Air conditioned Bus 37,*ol-

04. Double decker Bus L6,0,,,l-
05. Air conditioned (AC) Minibus/Coaster 16,0,,,,l-

06. Non-Ac Minibus/Coaster 6,5001-

07. Prime mover 24,lJi,o1-

08. Truck, Lorry or Tank Lorry having payload capacity exceeding 5 tons L5,W0l-
09. Truck, Lorry or Tank lorry having payload capacity exceeding 1,5 tons but not 9,sml-
exceedint 5 tons

10. Truck, Lorry or Tank Lorry having payload capacity not exceeding 1,5 tons 4,0f,/-
11. Pickup van, human hauler, maxi or auto rickshaw 4,m,J,l-

t2. Air conditioned Taxicab u,yXt/-

13. Non-AC Taxicab 4,W01-

[BRTA will collect the tax at the time of registration or fitness u/s 138]
27

Table of TCS

Serial Description of Vessel Rate of tax collection

No.

01. lnland ships engaged in carrying Taka 125 per passenger

passengers in inland water

02. Cargo, Container (multipurpose) and Taka 170 per gross tonnage
Coaster engaged in carrying goods in
inland water
03. Dump barge engaged in carrying Taka 125 per tross tonnage.
goods in inland water

BIWTA will collect tax at the

Minimum tax u/s 163 time of registration or fitness,
[Section: 139]
28

L4
 List of minimum tax s 163 I

WPPF (S€ction 881 20 Cash dlvldend {Section l1?l

ContEct & Supply (Section 89 & rule 3) 27 Income lrom lottery (Section 1181

3 All Services (Section 90) 22 Manpower export (Section 121)

4 Royalties (Section 9U 23 C&F agency commission {Section 122)

5 Dired advertisement {Section 92) 24 Export (Section 123)

5 Distributo6hip commi$ion (Section 90) 25 Foreign remittance of se.vice chaGe (Section 1241

7 TEvel agency commission {Sectaon 95} 26 Sale oJ land (S€ction 125) tin.l
8 lnsurance commisiion (Section 100) 27 Real Estate & Land Dev business (Section 1261

9 Sudeyorof General lnsu.ance (Section 101) 28 Commission on stamp paper (Section 1271

10 Eank interest out ot which gank interest of Public 29 ReSistration of leasehold property (sec 128)
Unlve6lt% MPO enllsted institution, ICAB, ICMAB,
tCSB ls final tax (Sectlon 102) Fin.l,
11 lnt. on savings certificate (Sedion 105) Fin.l 30 Banderol of handmade cigarette (Section 129)
t2 IGS on int. phone 6ll (Sedion 1081 31 Shipping business of a resident (*ction 132)
13 Hall rent (Section 110) 12 Public audion (S€ction 133)
14 Land acquisltlon {Section 111} Fin.l 33 Capital gain from tEnsfer of shars of priEte limited
company (S€ctlon 134)
15 Export cash subsidy (Sedion 112) Fin.l 14 Capital gain from t.ansfer ol shares by sponsor
shareholde6 (s€ction 135)
16 FrelSht foMrd atency commission (Sedion 113) 35
ls€cdon 135)
t7 Porer (Sectlon 1l4l 36 Share t6ding hou* (Section 137)
18 gmlnt monly (s€cdm u5l 37 Motor vchicles Plying on Comm€rclal basis (sec. 138)
19 Forelgn buyerl agent (S€ction 1161 :18 lnland Ships/ water vesel/ Cargo (Section 139)

Payment of tax by deducting authority itself where

deduction not possible
The base value will be determined through gross-up
applying the following formula:
100Xa
Amount of tax to be paid (c) =
100-b
Where a= exact amount to be paid
b= rate of deduction
in nc of PSR
an
tra nsfe r
\
Section 141

15
 Conseq uence of non-com pliance
* The deducting authority will be dqemed to be an assessee in default and shall be personally
liable to pay the taxes [ 3ec. 143(1)]
.:. TDS rate will be 50% higher in case of no PSR (other than payment to non-resident) and
transection without banklransfer. This provision is applicable to all TDS sections I sec. 142]
*Additional 2% per month is also to be paid if TDS amount is not deposited within 2"d
week of the following month.[sec. 143(3)]
.S.Penalty not exceedingTk. 10,00,000 may be imposed for being non-compliance of
any other provision of chapter-7 other than non/short deduction or non-deposit of
deducted tax to Govt. treaiury. I sec. 143(2)]

* lt mav be treated as an offence which is ounishable with imorisonment for a term uo

to 1 year with or without fine if deducting authority fails to deduct/collect tax
without reasonable cause. [sec. 315]

* Revenue expenditure will be treated as business income for non-TDS [sec. 55(a)]

.!. Capital expenditure will be treated as income from other sources for non-TDS [sec. 67(7]l

*Where a person issues a TDS certificate without actual TDS, he shall be personally
liable to pay the amount.[sec. L44]

31

Monthly withholding tax return

) Everv companv, Partnership Firm, Association of Person. Private
Hosoital. Clinic, Diagnostic Centre. Local authoritv and Autonomous
bodies shall have to file withholding tax return to the concerned DCT
every month at the form prescribed at Rule-24A accompanied by copy
of treasury challan as a proof of TDS. [section-177]

}Such return must be filed by 15th of the following month. DCT may
extend maximum 15 days time to submit such withholding tax return.

END OF THE PRESENTATION

16
 11t03t2024

Savc Tax Moncy

Tax
' Planning

Paper presented by:

Ranjan Kumar Bhowmik rcrr

Former Member
National Board of Revenue

Presentation outline
I

I
I

I
t.

F Tax Avoidance, Tax Evasion and Tax Planning

tax avoidance and evasion

D Tax Planning Vs. Tax Management

F Techniques and activities of Tax Planning

1
 11t03t2024

lntrod uction
Taxpayers generally plan their affairs so as to attract the least
incidence of tax. Tax planning can be defined as an arrangement
of one's financial and economic affairs by taking complete
legitimate benefit of all
- deductions
- exemptions
- allowances and
- rebates so that tax liability reduces to minimum

Tax planning provides strategies that are significant in minimizing

taxes. A company needs to be aware of anything that might
impact taxes to be paid.

Business tax planning includes taking advantage of opportunities

to provide :
-Tax relief, when possible
- Tax exemption, like charitable contributions are a great way for
a company to save taxes and help those in the community.

What is Tax
"Tales are dues that we p
organized societv." Tax is a compulsory payment made to the
Government for services it provides us, though people may not be
completely satisfied or convinced with these services.

'Tax' as per 1TO,1984 - means income tax and will also include:
(1) penalty
(2)delay interest
(3) simple interest
(4) fees
(5) income surcharge
(6) wealth surcharge \ Section 2(21) of 1TA,2023

(7) fine etc.

2
 11t03t2024

Common practice to save taxes

Three common practice to save taxes

lar Td Td
pLnnl.! mslon

Tax ev sion

- ln evading tax one is knowinglv breakine the law. This has

social and psychological consequences such as stigma and
guilt and involves confronting different costs since there is
a risk of being caught and fined or sent to prison. Evasion is
illegal. lt can involve acts of commission or omission.

- Tax cheating describes deliberate acts of non-compliance

and does not entail the difficulty of legal proof of tax
evasion. Non-compliance is a more neutral term than
evasion since it does not assume that an inaccurate tax
return is necessarily the result of an intention to defraud
the authorities and it recognizes that inaccuracy may
actually result in over-payment of taxes

3
 11t03t2024

I
Tax evasion

The expression 'Tax evasion' means illegally hiding income or

concealing the particulars of income or concealing the particular
source or sources of income or in manipulating the accounts so as to
inflate the expenditure and other outgoings with a view to illegally
reduce the tax burden. Hence. tax evasion is illegal and unethical.

COMMON METHOOS OF TAX EVASION

Tax evasion mav involves:

- untrue statement knowingly Omlhtdaddod@6s

Fq9ryd da.nodr

- submitting misleading document

- suppression of facts
- not maintaining proper accounts of income earned
- omission of material facts on assessment

COMMON METH9OS qF TAX AVOIDANCE

. lranslc. ol q6oa, v,,lh hd dolivo
. Translor ol g@o'ty to luEl
.- tu:rrq @ qlvaro hmld co@any 16, E

Tax Avoidance r W,ndow drorr.9 tolHd.ns

- Tax avoidance involves every attempt by legal means to

prevent or reduce tax liability which would otherwise be
incurred, by taking advantage of some provision or lack of
provision in the law.
- lt presupposes the existence of alternatives, one of which
would result in less tax than the other
- Tax avoidance is arranging one's affairs as to keep taxes as
low as possible. Everybody does so, rich or poor; and all do
right, because nobody owes any public duty to pay more
than the law demands.

4
 11t03t2024

STRATEGIEs TO PREVENTIU EYASIAN

AvotoAtJcE 'TiqI
. $oal alvaroress 9rqram
. BroEd baer rar n.I
rt Spcoal wnro-dog ,or oxcEo ad tumorc.
Tax Avoidance ,
w
Ro@qineori@ custom dlly ml
Smplifd h@ma E sF:om
- P€.all, end r*srd
d Stan&rd.6lo dpl&ulHypde
* Up&ti{ &d ovson trovief o tu trO.
re&

) Tax avoidance is reducing or negating tax liability in legally

permissible ways and has legal sanction.
F Tax avoidance is sound law and certainly not bad morality for
anybody to so arrange his affairs in such a way that the brunt of
taxation is the minimum.
i This can be done within the legal framework even by taking help
of loopholes in the law
) Thus tax avoidance means of traveling within the framework of the
law or acting as per the language of the law only in form, but
murdering the spirit of the law and thus acting against the
intention of the law and defeating the purpose of the particular
legal enactment.

Preventive measures at Bangladesh tax law

against
tax avoidance and evasion
) Tax avoidance through arranged transection with non-residents
[section 240]
) Tax avoidance through transfer of assets to non-residents [section 241]
i Tax avoidance through sale and buy back of securities [section 242]
i Requirement of tax clearance certificate for person leaving Bangladesh
[section 243]
i Determination of true income from international transection having
regard to arm's length price [section 234]
i Compulsory submission of statement/return regarding payment of
salary, interest and dividend [section 744-L471
> Power to issue notice calling for information [section 201]
) Mandatory TIN in almost all circumstances [section 261]
F Monetary reward for providing tax evasion related information
lsection 340I

5
 11t03t2024

Tax Avoidance Vs. Tax Evasion

Tax Avoidance Tax Evasion

Any tax planning which aims at All methods by which tax liability is
reducing tax liability in legally illegally avoided is termed as tax
recognized permissible ways can be evasion.
termed as an instance of tax avoidance.
Tax avoidance takes into account the Tax Evasion is an attempt to evade tax
loopholes of law. liability with the help of unfair
means/methods.

Tax avoidance is tax hedging within the Tax Evasion is tax omission.
framework of law.

Tax avoidance has legal sanction. Tax Evasion is unlawful and an assessee
guilty of tax evasion may be punished
under the relevant laws.

TAX PLANNING

{rA
T16r iho ?!AI th6c rho ml T

9I^_"_-I#
Nh
-ffi*r.-
'Tax planning' means dealing with the tax matters of a
taxpayer with a view to maximizing the after-tax rate of
return on investments after ensuring voluntary tax
compliance. For this purpose, each taxpayer has to -
'z ensure that proper records/accounts are kept;
/'/ deducUcollect tax at source where it is necessary;
pay AIT in time, if applicable;

. comply with notices received from the tax

authorities; and
, be aware of legal remedies where it does not have
its rights under the law recognized.

6
 11t03t2024

Fail to Plan =
!!l

?
Tax Planning ,
Ile s!

s,
* Tax planning takes maximum advantage of the
exemptions, deductions, rebates, reliefs and other tax
concessions allowed by taxation statutes, leading to the
reduction of the tax liability of the tax payer

* Effective tax planning and tax minimization are different

things. The reason is that tax-minimizing strategies may
introduce significant cost along with non-tax dimensions.

* Therefore, the tax-minimization strategy may be

undesirable. After all, a particular easy way to avoid taxes
is to avoid investing in profitable ventures." Thus, effective
tax planning means not to minimize tax, but to maximize
after-tax rate of return on assets.

Ta>< Errasion, Arroiclarrce & Planning

Legal Ethical Desirable
Tax Evasion x x x
Tax May or May May or May
Avoidance
{ not bel not be2
Tax ./ ./
Planning
{

'1. When used as an art of dodging taxes without breaking the law or
acting as per the language of the law only in form, but murdering the very
spirit of the law and thus unethical from the viewpoint of policymakers

2. When acting against the intention of the law & every attempt by legal
means to prevent or reduce tax liability and thus avoiding profitable
venture also.

7
 11t03t2024

Tax Planning Formula

Tax Planning Formula Tax Planning Action

Aggregate !ncome
Exclusions Maximize
Gross lncome
Allowable Deductions Maximize
Taxable lncome
x Tax Rate Minimize
Gross Tax
Tax Credit & Tax Rebate- Maximize
Tax Payable

Tax Planning Objectives

I
Ecomlc Flialmlrrcion
rarballc, of,I.ralFrton
- Plrnnirg
'frx
Obicc'.tiv.ar

t0G.latrt
Grcxrafr G,
Ecomrr
T::T

8
 11t03t2024

Types of Tax Planning

Long Range Tax Planning Permisive Tax Planning

f ,
Types ofTax
Planning

Short Range Tar Plannirg

f i Purposive Tar Planning

Methods of Tax Planning

Short ranqe Tax Planning

Short range Tax Planning means the planning thought of and

executed at the end of the income year to reduce taxable income in
a legalway.

Example:
- Suppose, at the end of the income year, an assesse finds his
taxes have been too high in comparison with last year and he
intends to reduce it
- NoW he may do that, to a great extent, by making proper
arrangements to get the maximum investment tax rebate uls 44
- Such plan does not involve any long term commitment, yet it
results in substantial tax savings.

I
 11t03t2024

Methods of Tax Planoing

Long range Tax Planning

This type of planning does not help immediately as in the case of

short range planning but is likely to help in the long run. Long range
tax planning means a plan charted out
- at the beginning of the income year
- to be followed around the year
Example:
lf an assessee arranged his share portfolio divided into shares and
mutual fund in such a proportion so that he can easily avail tax free
income benefit from both of them as per 6th Schedule(Part-A)
para-11 A and para-2ZAof lTO, 1 984.

Methods of Tax Plannin

Permissive Tax Planning

Permissive Tax Planning means making plans which are permissible

under different provisions of the law

- Planning of taking advantage of different incentives and deductions

- planning for availing different tax concessions etc.

10
 11t03t2024

Methods of Tax Planning

Purposive Tax Planninq

It means making plans with specific purpose to ensure the

availability of maximum benefits to the assessee
- through correct selection of investment
- making suitable program for replacement of assets
- varying the residential status and
- diversifying business activities and income etc.

Tax Planning Vs. Tax Management

Tax Planning Tax Management
The objective of tax planning is toThe objective of tax management is to
reduce the tax liability to the minimum comply with the provisions of law

Tax planning is futuristic in its Tax Management relates to past(i.e.,

approach assessment proceedings, rectification,
revision, appeals etc.), present(i.e., filing of
tax return on time on the basis of updated
records) and future (corrective action)
Tax planning is very wide in its Tax Management has a limited scope, i.e., it
coverage and includes tax deals with specific activities such as filing of
management return on time, drafting appeals, deduction
of tax at source on time, updating records
from time to time etc.
The benefits arising from tax planning As a result of effective tax management ,
are substantial particularly in the long penalty, penal interest, prosecution etc. can
run be avoided.

11
 11t03t2024

TRADITIONAL TAX PLANNING TECHNIQU ES

Traditional tax planning is based on maximizing the tax-favored

status and minimizing the tax-disfavored status.

Since the ultimate objective of traditional tax planning is the

minimization of the bottom line (i.e., the minimization of the
net tax payable), the rules of simple arithmetic suggest that tax
planning must necessarily involve:
. Maximization of tax crediUrebate/relief,
. Minimization of the applicable tax rate, and
. Maximization of deductions and/or exclusions.

TRADITIONAL TAX PLANNING TECHNIQUES

Traditional tax planning is equivalent to tax avoidance with the main

purpose of legal reduction of tax liability.

Tax Planning Principles:

. Taxes decrease if income earned by entity is subject to a low rate.
. Taxes decrease if payment can be deferred to a later year, because
tax deferred is tax reduced.
. Taxes decrease if income is generated in a low rate jurisdiction.
. Taxes decrease if income is taxed at a preferential rate.

Relevant Tax Rate:

For planning purposes only relevant rate is rate at which the transaction
will be taxed, i.e., marginal tax rate (MTR) - rate at which next Taka of
income will be taxed. The MTR may change as follows:
(a) higher bracket due to more income, or
(b) law may be changed and a new rate is prescribed.

12
 11t03t2024

Alternative View of Tax Planning Opportunities

An alternative way of viewing tax-planning opportunities is to observe

that income tax is constrained by:
Time, Entity, and Accounting method.
. Since income tax rates "start over" with each new tax year and very few
taxpayers have a constant level of taxable income in each year, there
tend to be high{ax years and low-tax years.
. The 'tax value' of a deduction is directly dependent on the marginal tax
bracket of the party reporting it.
. Obviously, therefore, taxpayers tend to recognize losses and other
deductions in high{ax years and to defer the recognition of taxable
income to low-tax years.
. To the extent that a taxpayer can control tax timing, s/he should do so
only after giving full considerations to the time value of money.

. Sometimes the financial cost of deferral is greater than the tax benefit.

Factors Affecting Tax Planning

Choice of Entitv: Different entities have different tax rates. Pass{hrough entities
(sole-proprietorship) allow shifting income to owner and one level of tax. Non-pass-
through entities (companies) are subject to double taxation, once at corporate level
and then again at the shareholder level.

Period of Transaction: Tax deferred is tax saved based upon time value of money.
Common techniques are to accelerate deductions (e.9., following accelerated
depreciation) and to defer income (e.9., through installment sale). A taxpayer has to
consider when taxes are actually paid (e.9., quarterly estimates versus end of year
computation).

Tax Jurisdictions: Tax liability depends whether the income will be accrued in
foreign country (subject to exemption or tax relief) or Bangladesh or whether the
income will be earned by establishing the entity in a low tax zone or a high tax
zone.

Character of lncome: Depending on the income character, certain types of income

are exempted fully or partially. Certain types of income are taxed at preferential
rates (e.9., capital gain on transfer of stocks and shares of listed company taxed @
10%, dividend income from shares taxed to companies @20%).

13
 11t03t2024

Tax is a Function of 3 Variables

A finat tax liability is a function of three (3) variables:

. the law,
. the facts, and
. the administrative (and sometimes judicial) process.
,/ lf any taxpayer is not satisfied with either the law or the administrative
and judicial processes, there is relatively little that s/he can do
/ The facts, however, are generally amenable to modification.
/ lf a taxpayer is wise enough to understand when and how to modify
them, s/he may very well reduce her/his tax liability significantly.
/ the highly qualified professional tax experts usually advice their
clients about the alternative ways of arranging facts.
/ ln other words, most professional tax planning is pre-arrangement of
facts in the most tax-favored way.

of tax p lanni activities

Tvpes of income tax annins activities are:

- Attempts to have income converted from one type to
another (ordinary income vs, capital gain, regular income
vs. windfall income, domestic income vs. foreign income,
set-off of loss under any head);
- Attempts to have income shifted from one pocket to
another (taxable vs. tax-exempt sources); and
- Attempts to have income shifted from one time period
to another (delaying recognition of income, if tax rates
are constant or declining over time, instant salary vs.
deferred compensation )

14
 11t03t2024

Maximize net present value of after-tax return

on investment
1=-How does this differ lrom tax minimization?
, Consider both tax and nontax factors
r Consider alternative forms of business
transactions and their tax effects, versus an
after-the-fact tax compliance approach
r Strategic, active participation in the tax system
versus a passive, uninformed role

t-t

Tax Planning

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s. FTSg c?B{nE cmrq1ffi< riig s.{ cRtsTs cF<; ffio
qlfrf\rlfltiF[{f l ETI
6. nfu q{F BIer ,*t qft+ --* 6.67(13) {IiIII Deemed income
CAIiVqF A'TCq'fr'r{{TII Rrcr< <mE o-r qnsrfarc
z. R-q <rr(s ftxrm qr*m 6ror
qsl
cffttrls-{r<Flqil 7. ?l"ilis q'$?til{fl slgTq-dl-s
1I qm Deemed income RIXIE
8. qEI?F-{!S&q C{rS $S nIE"f <rgB6-snqrmrfatoe{1
<T ffi6 q-iIrFII {T 6Gr "rfr"nq-{ r, 6spl snfrrnr sBrs 6-{{r
s-s{l

15
 11103t2024

END OF THE PRESENTATION!!

A
7

16
 Salary Tax

\
L

Paper presented by:

Ranjan Kumar Bhowmik rcro

Former Member
National Board of Revenue

Presentation outline
. What does salary mean ?
. Classification of Salary
. Perquisites
. Salary Income Computation
. Tax on tax
. Salaries exempt from payment of tax
. lnvestment Tax Rebate calculation
. Present tax rate
. TDS from salary

1
 Definition of Salary
There is no exhaustive definition of salary at lncome Tax Ordinance, 7984.
Only an inclusive definition is given where "5a!a1y" includes the following:-

* Pay or Wages
.1. Annuity
.1. Pension-Fully tax free as per 6th Schedule (Part-l) Para-4
.1. Gratuity-Partly tax free up to Tk. 2.5 crore as per 6th Schedule(Part-1)Para-5
.1. Fees
* Commission
.1. Allowances
* Perquisites
* Profits in lieu of salary or wages
* Profits in addition to salary or wages
* Advance Salary
* Leave encashment
* Bonus
* Overtime

[Section 32(2) of lncome Tax Act,2023]

lncome From Employment

The following 4 (four) categories of income of an assessee is classified and
computed under the head "income from employment", namely:-

a) Salary due from an employer to an employee in the income year, whether

received or not;

b) Salary received in the income year though not due before it become due to
him;

c) Arrear salary if not charged to income tax for any earlier income year; and
d) Any income earned from employee share scheme.

Salarv once included in anv vear on due basis or advance pavment basis is not
includible again in salarv income of an emplovee of anv other vear.

)
Section 32(1) of ,-tA,2023

2
 Share Based Payment

a
Salary Income

Fair Value at Cost of Acouirins

_--f--____D
r Salary Income
Exercise Date the Shares

("
Sale of Share-options will also be taxable under the head
income from employment

[Section 34 of lncome Tax Act,2023]

Perq uisites
Perquisite means any payment or benefit made to an employee in the form
of cash or any other form but excluding the following:-

a) Basic Salary
b) Festival bonus
c) ArrearSalary
d) Advance Salary
e) Leave encashment
f) Overtime
g) Contribution by the employer to-
1) Recognized provident fund.
2) Approved Pension Fund.
3) Approved Gratuity Fund and
4) Approved Superannuation Fund.

Section 32(2)(c) of lT Act,2023

6

3
 Taxable salary Income Computation

The following payment will not be included in computing income from

employment:
[1] Any amount received from the employer against surgery of heart,
liver, kidney, eye and cancer. However this exemption will not be
applicable for shareholder director of any company.
[2]Any conveyance allowance, travelling allowance and daily
allowance which is expended wholly, necessarily and exclusively for
the performance of the duties of the office.
Section 32(2)

[3]Tax free income from salary would be Tk.4,50,000 or 1/3rd of rOSS

salary whichever is lower.
6th schedule( parl- 1) par a-27

[4]All allowances (except basic salary, festival allowance and bonus)

of Govt. employee are exempted from payment of tax. Retirement
benefit in the name of lump grant is also tax free.
ISRO No:225 dated t3l7/20231
7

Value of perquisites

Rent free accommodation

Rental value of the rent-free accommodation to be added directly in computing salary
income.

Full time car facilitv

[1] Monthly Tk.10,000 will be added in computing salary income in case of availing full
time car facility up to 2,500 cc.

[2] Monthly Tk.25,000 will be added in computing salary income in case of availing fulI
time car facility above 2,500 cc.

[Section 33 of lncome Tax Act,2023]

4
 No tax on tax if salary tax is paid by the employer

lf salary tax is borne by the employer, then that tax will not be treated as
perquisite in the hand of the employee and therefore there is no tax on tax
issue in this case.

)
s.R.o. no 18211999 dated 01-07-1999

lnvestment Tax Rebate

According to 6th schedule(Part-3) para-l the following investments and donations are
eligible for tax rebate for resident individual and for non-resident Bangladeshi:-
* Life insurance premium of self ,spouse and dependent children subject to maximum
10% of policy value [Para-2(1)]
* Employee's contribution G.P.F. in case of Govt. employee [Para-2(4)]
.i Both employee's and employer's contribution to Recognized Provident Fund IPara-2(5)]
* Employee's contribution to approved superannuation fund in which the employee is a
participant IPara-2(6)]
.i. Employee's contribution to benevolent fund and group insurance scheme [Para-2(12)]
* Contribution to any DPS up to Tk.1,20,OOO/ per year at any scheduled bank/financial
institution. IPa ra-2(7Xc)]
* lnvestmentuptoTk.5,00,000duringtheyearinthefollowingsavingsinstrumentsIPara-2(7)]
(1) Any sorts of savings certificates but the condition is that it must be hold till the maturity..
(2) Government Bond and Securities

{. Unit Certificate and Mutual fund certificate up to Tk.5,00,000 issued by ICB or any financial
institution. IPara-2(7)]
* lnvestment in shares, debentures or mutual fund either primary or secondary liste{o
with anv stock exchanee in Bansladesh tPara-2(8'll

5
 Tax Rebate on donation

t Donation to rural charitable hospital approved by the NBR. [Para- 2(9)]

* Donation to national level institution in memory of the liberation
war(Para-2(14))
.:. Donation to national level institution in memory of Father of the Nation(Para-2(15)

* Donation to organization for the welfare of the retarded people approved

by the Social Welfare Department and NBR (Para 2(10))

* Donation/Contribution/Zakat to Govt. Jakat Fund maintained by lslamic

Foundation [Para 2(11)]
.:. Donation to Govt. approved philanthropic and educational institutions (Para-2(13))

11

TAX REBATE CALCULATION

ON
Al lowa ble lnvestment Al lowa nce:

3o/o of total taxable income

[excluding any income where

Tax rebate
minimum tax is applicable and any
whichever is lower
income where reduced tax rate is
applicablel
or
l5o/o of actual allowable investment
or
Tk.10,00,000

12

6
 New tax rate for the assessment year: 2023-24

lncome slab Rate Minimum tax

On the 1n Tk. 3,50,000/- of total income Nil After rebate, minimum tax for individual taxpayers are:
IFor woman & senior citizen Tk.4,00,000/
1) Tk.5,000/ in case of Dhaka & Chittatong City
On the next Tk. 1,00,000/- of total income 5% Corporation area.
On the next Tk. 3,00,000/- of total income to%
2) Tk.4,000/ for other city corporation area.
On the next Tk. 4,00,000/- of total income L5%
3) Tk,3,000/ for other areas if total income exceeds the
On the next Tk. 5,00,000/- of total income 20%
minimum taxable ceiling,
On the balance of total income 25%

[1] Threshold limit for third gender tax paye6 & physically handicapped peGons is Tk, 4,75,000/
[2] Threshold limit for gazetted war-wounded freedom fighter is Tk,5,O0,U)0,
[3] Threshold limit in case of parents or leSal Bua.dian of any physically challenged child or dependent will be
50,q)0 taka more for each child/ dependent. lf both lather and mother are assessee then any one can avail this
benefit.

[Finance Act,2023]

Deduction of tax at source from salaries

.1. The employer shall deduct tax at source at the time of paying salaries at an
averaqe rate applicable to the estimated total income of the employee. At
the time of making such deductions, the amount to be deducted may be
increased or decreased for the purpose of adjusting any excess or deficiency
arising out of any previous deductions or failure to make deductions.
.t The amount deducted shall be deposited to the credit of the Govt. within 2
weeks from the end of the month of deduction.

Section 86
\

14

7
END OF THE PRESENTATION!!

A
a

8
 Income Tax Return

Paper presented by:

Ranjan Kumar Bhowmik rcro

Former Member
National Board of Revenue

Presentation outline
. lntroduction
. Mandatory requirement of filing return
. Persons who are not required to file return
. Place where Return is to be submitted
. What documents to be submitted with return ?
. Tax day
. When amended and revised return can be filed ?
. TIN De-registration
. Penalty for non-submission of return

1,
 lntroduction

Every person who is required to file return of

income shall have to fill-up the return form
prescribed by the NBR, which sha!! also be verified
in the manner indicated in that form.

For individual assessee the return together with

the statement of assets, liabilities and expenditure
and also the life style statement shall collectively
constitute a valid and complete return.

Persons required to file return of income:

1. lf his taxable income during the income year exceeded the

non-taxable ceiling of income (now it is Tk. 3,50,000/- for the
a ssessm ent yea r 2023-241

2. !f he was assessed to tax for any one of the 3 years

immediately preceding the year under consideration.

166 of lncome Tax Act,2023I

2
 Persons required to file return of income: {cont.)
Company

Any resident or non-resident individual having fixed base in Bangladesh,

Partnership Firm & lt's partner

Association of Person

(3) rf the Shareholder director /shareholder employee of a company

person is a

lfany person is required to be registered as assessee u/s 261

lf any person is required to furnish proof of submission of return u/s 264

lf any person has any exempted income or income where reduced tax rdte is
applicable.

Person does not require to file return of income:

(a) Public University

(b) Educational lnstitution receiving Govt. benefits under
MPO which does not follow anv Enelish version curriculum

(c) Bangladesh Bank.

(d) tocal authority.

The person does

(e) Statutory Govt. authority or autonomous body who has no
not require to file income other than fund received from Govt. and interest
return of income- income.

(f| Govt. Provident Fund and Govt. Pension Fund.

(g) A non-resident individual having no fixed base in

Bangladesh.

{h) Any person which the NBR exempt from filing return of
income

3
 Place where Return is to be submitted

(1) Return is to be submitted at concerned circle office as

per jurisdiction.
(21 Non-resident Bangladeshi may file their return at
nearest Baneladesh mission. The missions will then
send the return to the NBR and NBR again will send the
return to the concerned circle office.
(3) Return can also be submitted at Tax Fair organized by
the NBR every year.
(a) The system of online return filing has been
introduced on l'tNovember,zor6 and by so doing all
categories of assessee now can easily submit their
tax return through online.

!
7

What documents to be submitted with return ?

!t is mandatory to submit audited statement of accounts at the

Company of filing return and a separate calculation sheet is to be submitted
income shown at return differs from audited statement of

.3. Shall furnish statements of assets, llabillties and if he

(a) has gross wealth exceedingTk.4Qd!,0fi); or

has made investment in a house property or an in the city

area
owned any asset in foreign countries
become shareholder director of any company
lndividual
also furnish life style statement along with the return if:

income exceeds Tk.5,fi),000; or

owns a motor car; or
he has made investment in a house property or an a in the city

(d) he has any income from business

(e! he has become shareholder director of any
[Section 167 and 158 of lT Act.2023l

4
 Tax day
Type of assessee Tax day within Remarks
which return must
he submitted
Bank, lnsuGnce and other non- 15th September Delay interest will be calculated @ 4% per month on the
banking Financial lnstitution whole amount oftax on total income including any exempted
A company which is a subsidiary Within r5th of income.
or holding company of a parent
the 7th month Period of delay interest: the period will start from the first
company incorporated outside
from the end of day immediately following the Tax day to:
Bangladesh if such company
requi€s to follow a different the income year
financial year for the purpose of [1] The date of filing return where return is filed. Any fraction
conslidation of its accounts with ofthe month will be treated as full morth.
the oarent comganv:
All other company 15th lanuary [2] The date of regular assessment where return is not filed
Other than company that means November
3oth However the period shall not exceed 24 months.
individual, partnership firm and
Hindu undivided family

lncome yea? lncome year Assessment year

ended on
30.06.2023 2022-23 2023-24 15.01.2024
30.09.2022 01t10121 to 30l9l22 2023-24 15.09.2023
31.12.2022 2022 2023-24 1 5.09.2023

31.03.2023 0114t22to 3'U3123 2023-24 15.',to.2023

31.07.2023 01l8l22to 31n123 2024-25 15.09.2024

n After filing return under self assessment scheme if any assessee finds that
unintentionally tax has been computed/paid short, then he may file an
amended return within 180 days from the date of filing return attaching
the following: Ref: Section 180
1. a written statement about the mistake.
2. a proof of tax paid along wlth interest @ 5o/o p.m. which was
computed/paid short.

* Assessee will get an opportunity to submit amended return against notice

u/s 181 relating to any adjustment in respect of any arithmetical error in
the return or incorrect tax or rebate computation. DCT can issue such
notice within 1 year from the date of filing return. Ref: Section 181

* Revised return can be submitted, without reducing tax liability, before l't
hearing date or before 5 months of time barred whichever is earlier. Ref:
Section 175

10

5
 Penalty for non-submission of return

Amount of penalty Reference section I

Pre-conditions
I I I

I I I

I I I

I I I

I I +

10% of the I 266

last I

assessed tax J-
Whichever is was not previously
orl higher assessed then penalty shall
not exceed Tk. s,(XrO
Tk. 1,OOO/- l
+ !n case of existing
Tk.50 per individual assessee penalty
day during
which the assessed tax or Tk. l,(XX)
default whichever is higher.
continues

11

TIN de-registration
ft1---..1"rr,ng I Winding up
I Bangladesh I

h:
Deceased person
TIN de-registration

Closure of
Branch/Liaison office

al?

tL*-Al<\

6
 11t03t2024

* t
Companv Tax Assessment
I

( /

Presented
by
Ranian Kumar Bhowmik,.,o
Former Member
National Board of Revenue 1

\. t
Classification of Companies:

For preferentialtax purpose, companies are classified

into following groups:

(1) Bank, insurance and other financial institutions;

(2) Merchant Bank
(3) Publicly traded company
(4) Non-publicly traded company
(5) Mobile Phone Operator company
(6) Tobacco manufacturing company
(7) One Person Company (OPC)
2

1
 1110312024

* ---*

Publicly Traded Gompany:

"Publicly traded Company" or listed company

means a company which fulfills the following
conditions:

{.The Company is registered in Bangladesh

under the Companies Act 1913 or 1994;
* The company is enlisted with the Stock
Exchange before the end of the concerned
income vear.
3

l-
* !
Mandatorv TIN :
l

* Every company requires 12 digit TIN to mention it in the

income tax return. TIN can be obtained through online.

* Now 12 digit TIN certificate of sponsor shareholder

directors including foreign shareholder is mandatory at the
time of registration of a company under the Companies Act,
1 994

* Every company shall submit return of income and display

-
the proof of submission of return at a conspicuous place of
the company's business premises.

'.
.:
-ti.: .
.: ll- '
4
I
2
 11t03t2024

* *
Submission of Income Tax Return
* Return must be filed within the Tax Day

.1. From the following example, we can see how to find out
the assessment year and tax day:

2022-23 2023-24 15.01.2024

01t10t21 to 30l9l22 2023-24 15.09.2023
2022 2023-24 1s.09.2023
01l4122 to 3113123 2023-24 {5.10.2023
O1l8l22 to 31n123 2024-25 1s.09.2024

*r--- '.- {

Sisnatorv
The return should be signed by the principal officer. Principal
officer may be-

(a) Managing director, manager, secretary treasure,

CEO,CFO
- (by whatever designation known), or
or accountant
any officer responsible for management of the affairs, or of the
accounts, ofthe company; and

(b) Any person connected with the management or the

administration of the company upon whom the DCT has
served a notice of his intention to treat him as principal officer
thereof.
6

3
 11t03t2024

*-- IL
Documents to be attached with return:

t Audited Statement of accounb.

* lncome Computation sheet if taxable income
differ from net

\4
't
Maintenance of Accounts

Every company shall, furnish a copy of the

trading account, profit and loss account and the
balance sheet in respect of the income year
certified bv a chartered accountant to the effect
that accounts are maintained according to IAS
and reported in accordance with IFRS and to be
audited as per lSA.

4
 11t03t2024

* t

Any expenditure incurred wholly &

exclusively for the purpose of business of
profession is allowable expenditure.

\t .-t-
-

* Any payment where tax is deductable but not deducted [sec.S5(a)]

* Salary, remuneration, interest and commission paid to any partner

of the partnership firm or member of any AOP. [sec.ss(b)]

* Payment of salary to an employee who is required to show PSR as

a proof of return submission. PSR is mandatory for those
employee who are working in any organization at managerial or
executive position or supervisory position in any industrial level.
[sec. 55(o)]
.:. Any expenditure which is capital or personal in nature and not
connected with the business. [sec. 55(p + r)]

* Perquisites to any employee in excess of TK. 10,00,000 [sec. 55(d]l

10

5
 11t03t2024

{ !
Limit of free samples expenditure

Turnover % of tumover

Pharmaceutical Other
lndustry lndustry

Up to Tk. 5 crore 2o/o 1o/o 0.50%

Exceeding Tk. 5 0.50%

crore, but up to
Tk. 10 crore
Exceeding Tk. '10 0.5o/o o.25% 0.10o/o
crore

)
Section 55(i)
11

\&7 -L
*
..'. Entertainment expenditure exceeding the following limits:

* Head Office expenditure or intra-group expenditure

exceeding lOo/o of the disclosed net profit applicable for
foreign company [sec. 55(f)]

.1. Royalty and technical know-how fee exceedingl0% of

the disclosed net profit.[sec. 55(e)]

t2

6
 11t03t2024

* t
lnadmissible Expenditu re

* Salary if paid othenrise than by bank transfer [sec.ss(k)l

* lmpairment loss [sec. 55(t)l
* Overseas traveling exceeding 0.50% of disclosed business
turnover. However, exceeded amount will also be allowed if proper
evidence and justification can be provided. [sec.S5(g)l
.r Any commission or discount paid by any company to its
shareholder director [sec. 55(c)l
* Any cash payment above Tk.50,000 other than bank transfer
except any payment for government obligation. However, in case
of raw-material purchase the limit of cash payment is Tk.5,00,000
lsec. 55(m + n)l

13

*" t
lnadmissible Expenditure
* Any payment by way of any rent of any property whether
used for residential or commercial purpose, otherwise than
by bank transfer [sec. 55(L)]

* Any payment to any agenudistributor or for commission, fees

or other sum in relation to money transfer through mobile
banking or mobile phone recharge or against consultancy,
catering, event management, manpower supply, security
service if the payee does not have any e-TlN [sec. 55(o)]

* Promotional expenses exceeding 0.50% of disclosed business

turnover [sec. 55(j)l

* Contribution to any fund which is not approved by the

NBR[sec.55(u)]
t4

7
 11t03t2024

_ .t_
I

lnadmissible Expenditure
* Deduction as depreciation and interest on any right to use
asset. However, rent and maintenance expense will be
allowed. [sec.55(s)]

* Any accrued expense which cannot be specifically

ascertainable. [sec. 55(q)]

* Any expense which are not connected with business operation

[sec. 55(r)]

* Any expenditure which is not vouched and verifiable and

which is not complied with GAAP.[sec. 55(v)]

15

{ *
Corporate Tax Rate
The income tax rates for companies are as
follows:
Types of Heads/sources of lncome Tax Rates for
Company Assessment Year

2023-24
(1) Capital Gain ( 2nd schedule) 15%

(2) Capital Gain from sale of shares of ,t0%

Bank,
listed companies
lnsurance, (3) Dividend lncome 2Oo/o
Financial
lnstitutions (4) Other lncome Both publicly traded 37.5%
and not publicly traded
company

16

8
 11t03t2024

Conditional company tax rate for the assessment year:2023-24

Nature of the company tax rate tax rate

[if conditions are not fulfilled]

Non-listed Companies 27.5o/o 3oo/o

One person company [OPC] 22.5o/o 25%

Preconditions to avail new tax rate:

[1]All sales/receipts must be through banking channel.
[2] ln case of investment and expenditure, per transaction
exceeding Tk. 5,00,000 must be through banking channel
and altogether yearly transaction exceeding Tk.36,00,000
be

\
IFinance Act,2023]

Conditional Listed company tax rate for the

assessment yea r. 2423-24
tax rate Preconditions

20Yo [1] More than 10% paid-up capital through IPO

[2] All sales/receipts must be through banking channel
[3] ln case of investment and expenditure, pertransection
exceeding Tk. 5,00,000 must be through banking channel and
mH0IPuttct altogether yea rly transection exceed in g Tk36,00,000 m ust be

Violation of serial number 2 and 3 will lead lo lax rale 22.5o/o

22.5%
[1]10% or less than'10/" paid-up capital through IPO
[2] All sales/receipts must be through banking channel
[3] ln case of investment and expenditure, per transection
exceeding Tk. 5,00,000 must be through banking channel and
altogether yearly transection exceeding Tk.36,00,000 must be
through banking channel.
\
Violation of serial number 2 and 3 will lead to tax rate 25%

IFinance Ad,2023]

I
 11t03t2024

L
*
Types of Heads/sources of lncome Assessment Year
Company 2023-24

(1) Capital Gain ( 2nd schedule) 't5%

(2) Capital Gain from sale of shares of 10o/o

listed companies
Mobile (3) Dividend lncome 2OYo
Phone
Other
(4) For publicly Traded 40o/o
lncome Company

Other than publicly 45o/o

I
Traded Company

19

\. I
L

(11 Tax Holidav

The company is allowed tax holiday for 5 years or 10 years
depending on the location of the industry
(a) Ohaka, Mymensingh and First year 90%
Chittagang division (excluding Second year 80%
Dhaka, Narayangonj, Gazipur and Third year 600/o
Chittagong district and also the hill 5 Fourth year 40%
district of Rangamati, Bandarban Fifth year 20%
and Khagrachari)
First year and Second year 90o/o
(b) Rajshahi, Khulna, SylhetBarisal Third year 80o/o
and Rangpur excluding city Fourth year 7Oo/o
corporation area (including the hill Fifih year 60%
district of Rangamati, Bandarban Sixth year
and Khagrachari) 10
50o/o

Seventh year 4Oo/o

Eighth year 30%
Ninth year 2Oo/o
Tenth year 10%

10
 11t0312024

*
Fiscal Incentives:
t
(2) Tax Exemotion for industries set-up at Economic Zone
and Hiqh Tech Park

First year, Second year and Third year 100%

Fourth year 8oo/o

Fifth year 70o/o

Sixth year 600/o

Seventh year 50%

Eighth year 40Yo
Ninth year 30%
Tenth year 20Yo

)
[SRO no 226 + 228 dated 10/8/2016t
2t

\4. t
Other Tax Exemptions
I. Industries set up in EPZ will also enjoy tax exemption
for 517 years depending on the location. ISRO no- 219-
AinI 20 I 2 dated 27 I 0 6 I 20 I 2)
II. Income from 'Computer Software development
business run by Bangladeshi resident is exempted from
tax up to 30l06l2024lpara-21of 6th Schedule (Part-l )l
III. Income of the private power generation company up to
l5 years from its commercial production. [SRO no- 36-
Ainl 97 dated 03 I 021 1997)
Iv. Any income from the export of handicrafts for the
period from lst day ofJuly, 2008 to the 30th day of
[une,2024. (Para-2? of 6th Schedule (Part-l ))
22

11
 11t03t2024

lT related tax exempted sectors

'l . Sofhivare development 'l 9.Search engine optimization services

2. Software or application customization 20.Document conversion and imaging

3. NTTN Digital archiving
4. Digital content development & mgt. 21 .Robotics process outsourcing
5. Digital animation development servtces
6.Website development
23. Cloud service
7.Websile services 24. System integration
8.Web listing 25. elearning platform
9.lT process outsourcing 26. e-book publication
l0.Website hosting 27. Mobile application development service
1 1 Digital graphics design
.
28. lT Freelancing
l2.Digital data entry and processing
1 3.Digital data analytics
'l 4. Geographic lnformation

Services(GlS)
15.1T support & software maintenance
services
l6.Software test lab services
1 7.Call centre serviccs 23
1 S.Overseas medical transcription

\t *
Corporate Social Responsibility

a CSR is defined as the integration of business operations and values,

whereby the interests of all stakeholders including investors,
customers, employees, the community and the environment are
reflected in the company's policies and actions.
a CSR is about how businesses align their values and behavior with the
expectation of stakeholders-not just customers and investors, but also
employees, suppliers, communities, regulators, special interest
groups, and society as a whole.
a lt is the company's commitment to be accountable to its stakeholders.
CSR demands that businesses manage the economic, social, and
environmental impacts of their operations. \

,*o )r, da*t.2r6t2o12

sRo no.t86 Lr"o or,r,roro

?4

12
 11t0312024

*
Corporate Social Responsibility
The companies will get 'l0o/o lax rebate on the lower
amount of the following three:

20Yo ol toh|
rncome

OR Tax rebate
Whichever is 0% ts
lower is to be
TK. 12,00,00,000/=
treated as applicable on
allowable CSR such allowable
OR
CSR.
Actual money spent for
csR
The tax provision clearly specified 23 areas where the companies can
perform their CSR for availing the benefit of tax rebate.
25

{- Il-
Areas of CSR
* natural calamities
* old home
* welfare of retarded persons
* education of poor children
* accommodation of slum dwellers
* awareness program of anti-dowry and women rights
r. rehabilitation of poor and orphan children
* research on liberation war related subject
.:. sanitation in Chittagong hilltracts
.:. treatment of cataract, cancer, leprosy
+ treatment of acid victims
* free medical treatment to the poor by specialized hospital
* public university
26

13
 11t03t2024

*- -----*
Areas of CSR (Cont...)
.:. technical and vocational education
a computer and information technology
* vocational training to unskilled workers for man power export
* infrastructure of national level sports
* Donation to national level institution set up in memory of the
liberation war
* Donation to national level institution set up in memory of Father of
the Nation
* Donations made to non-profit voluntary social welfare organizations
engaged for running rehabilitation center, creation of awareness
and treatment of HIVAIDS and Drug addicted
* Donations made to non-profit voluntary social welfare organizations
engaged for running rehabilitation center for recovered
childrenAaromen of cross boarder trafficking.
* Donation to any special calamities or tournament or any national
program approved by the Govt. 27

\4.
*
Conditions to qualify for CSR
.i. regularity in payment of salary to staff
+ having waste treatment plant in industry
.i. regularity in payment of lncome tax, VAI Duty and
loan
* CSR only through govt. approved institutions
* Compliance of Labor Law.
* amount spent for CSR will not be considered as
business expenditures
* documents in support of actual expenditure of CSR
to be submitted to the concerned DCT
* Submit CSR plan to NBR and obtain exemption
certificate

28
END OFTHE PRESENTATION

14
 L7l03l2024

D DISPUTE RESOLUTION PROCEDURE

l-r_L
I
i
,i,
c- @.
z4)
Paper presented by:

Ranjan Kumar Bhowmik rc,,,ra

Former Member
National Board of Revenue

DISPUTE RESOTUTION PROCESS

2
o DCT'5 assm€nt
order

Choose an Appeal Option

€&
o AICT {Non- AACT (Non- Cf (Appealsl
omprny cesesf company eses! (For comp.iy ard its

Review
application Tares Appellate Tribunal
to CT (Bodr a'ressce and tncome tax
department can Eo,

(D
E]{D Refetenc€ appllcation to Honorable
+ HiEh Court (Only .t question of lawl

DEpute eB
Resolution Honorable Appellate
(ADRI Dhhion (lf cortlfled asfit
Sor appeal)
I
w
END
i

7
 LL/03/2024

APPEAL

relurn submitled qnd qssessee nol

wilh the DCI's order; lf relurn nol submftled:
ol oppeol wilhin 45 doys;
os per relurn musl be poid before l0% of lox demqnded lo be
n ol oppeol pold belore flling oppeql

Order wilhin 150 doys;

It moy confirm. reduce
enhonce, sel oside or Section-286
onnul the ossessmenl;
No order lo enhoncemenl
wilhoul giving opporlunity
of heoring lo the ossessee

Toxes Appellole Tribunol

Submilled by Condilions:
ossessee: Tox to be poid
@ I0% on the
Appellote Trlbunol
wilhln 60 doys belween lox os the finol locl llndlng
with groundr ot per relum ond lox os per
oppeol. oppeol order

E
tr
l
-o

DCI to file second

deporlmenl oggrieved; oppeol ofter getting -)
60 doys with from lhe
nds of oppeol.
concerned
Commissioner of Toxes. Section-
291+292

2
 Ltl03/2024

REFERENCE IO HONOURABTE HIGH COURI DIVISION

D oSsessee 'ox lo be poid @ I5% on the

belween lox
Tribunol ble qs per relurn ond lox
o ble os per Trlbunol order if
lox demond is below l0
-o
o
o doys with @ 25% on such difference if
of low. demond is more lhon l0
Of
-o
oU
t-c
9rol
ry
(,=
E!
o ogoinsl
o order:
o to be NBR opprovolrequired
E within 90
with queslion

Section=293+294

REVIEW TO COMMISSIONER OF TAXES

No order
prejudiciolto
ossessee.
. No review if
Review oppeol
ogoinsl pending before
DCT's ony oppeo!
qssessmenl outhorily or not
wilhdrown or Review order
within 60 right to oppeol within 50 doys
doys. is not woived.

-)

Section-285

3
 rt/0312024

ALTERNATTVE DTSPUTE RESOTUTTON (ADR)

@r*r,r,^

pending
ADR
before ony
Assessmenl resolulion
by DCI {: oppellole by neulrol
L] outhority, Focililqtor
Tribunol or
Courl

f,IIDIATI('N -)
'Mt6irrNU.lqtr
rib.ffiof&Pirca
cdle$ldyhaffir
di$kffi'

Section-302+304

ATTERNATTVE DTSPUTE RESOTUTTON (ADR)

. Assessmenl of income obove shown income

. Any order by oppeol outhority.
Dispute

. Applicolion ogqinsl DCT's ossessmenl ond ony oppeol pending belore

ony oppeol outhority or courl;
. Applicqlion for ADR within 30 doys lrom getting permission;
. Applicotion lo oppeol outhotity or courl ond obloining permission lrom
ADR
courl.

. ro be oppointed by NBR;
. Neulrol person wilh knowledge ol lox low lo be oppoinled os Focllilolor;
. Heoring bolh ossessee or ossessee's represenlolive ond CI's
represenlolive;
. Moke decision occeploble lo bolh. Binding for oll. lf nol ogreed,
I disputed porlion to be hied in the oppropriole courl.;
Focilitotor . Decision within 3 monlhs lrom lhe end ol the monlh of liling ADR

L. END OF THE PRESENTATION

4
 LL/03/2024

adesh Tax Managem

Paper presented by:

Ranjan Kumar Bhowmik rc,uro

Former Member
National Board of Revenue

PRESENTATION OUTLINES

t
 L7/03/2024

Introduction
"Taxes are dues that we pay for the privileges of membership in an
organized society." Tax is a compulsory payment made to the
Government for services it provides us, though people may not be
completely satisfied or convinced with these services.

Income tax, as we all know, is a tax on income. VAT is also

different from income tax in so far as in VAT, the incidence can be
shifted but income tax is an ultimate burden.

Income tax is an annual tax in the sense it is assessed on the income

year basis. Income tax is a one stage tax and an income once taxed

Income tai is equitable and progressive. Its moral, ethical and legal
basis is stronger than those of indirect tax.

About NBR
About N.tional Bolrd of Revenue (NBRI
.rr TE War 8dd o, Flcctrc (N8R) I rre apar
* ervlty ldu ffitrlls n 8a.tgffi
6ta&ha(l ry tht tam. ol rE 116 Ea.rgEHdhu
n ra3

sffi Mulur Rtnrun uer BBffirt o.dar b

t: 76 d 1f,72 AdffiElrah€ay i B qrl|r llE mcrEl
lE d
ReBdc6 omm (rRO) ol MhBt.y FhaEe
(M) TE-.Sry rO B rar.,ftOoE|'IIU O,
NBR

Nm 6 crro.l.* 8 ffi td cdlrlru c{PP6El d u-9oic6 ed E{c. Gg#hg E

tic.B 6lsdgn t@,rcB e Paftlpaang h mHflnEbol dh.llmt s G@ffi E G
Dayhg a Hmg o kd p*E .d B ffiffilm TE ffi .BFaEDfiy ol lllFa E b c*l b
lre (p.mdy. EnE rc Td cBdE ody EEe cxly fr ftdE Ta ) r ffi fin GG E-
lypc rtr96 n4Ely. Cffi mg, vAI Wng e, lGqE Ta VYrrC TlErc ac tE m *rgt mf,d rT fiC
dFl..4Eheffi3*rg uffit€ca

2
 7L/03/2024

SOME OUOTABLE OUOTES ON TAXATION

z The hardest thing to understand in this world is income tax
-Albert Einstein
> Taxes are what we pay for our civilized society
-Justice Oliver Wendell Holmes
r ln this world nothing is certain except death and taxes
-Benjamin Franklin
i When there is income tax, the just man will pay more and the unjust man
less on the same amount of income --Plato
i The income tax created more criminals than any other single act of the GoW.
-Barry Colderator
i Collecting more taxes than absolutely necessary is legalized robbery
- Calvin Silent Cal Coolidge
i Don't tax my income ,tax my consumption --Bill Gates

Principles of good tax svstem

Iar tytt nr rtrould 6f,ro{ tiu iyrq"rn t' b*iad

nol har, any tquity
Certainty oo thc Fopb'r rbility to
rdrct*eficct or,
frr 3hodd ple
bc ctxtScd Trrpry {roddrtilc
be*cd on Simplicity
acord/Uto to urr'dartlarld tlr€
thc r?rooat'la
trr lar;yrtfin
dlrtrtbut}on

Ier *nxtrrc 3lrorjd

rct be crr.rECd St;bility Conrrcnioocg
r?tulyly

3
 rt/03/2024

Canons of Taxation

Canons of Taxation are the main basic principles/rules set

to build a'Good Thx System'.

Adam Smith gave following four important canons of

taxation, they are:
D Canon of Equity
) Canon of Certainty
F Canon of Convenience

Canons of Taxation
> Canon of Equity: Every person should pay to the government
depending upon his ability to pay.
z Canon of Certainty: The tax which an individual has to pay should
be certain, not arbitrary. The tax payer should know in advance how
much tax he has to pay, at what time he has to pay the tax, and in what
form the tax is to be paid to the govemment

z Canon of Convenience: The mode and timing of tax payment should

be as far as possible, convenient to the tax payers. For example, land
revenue is collected at time of harvest. income tax is deducted at
source at the time of payment.

D Canon ofEconomy: This principle states that there should be

economy in tax administration. The maximum part of tax collection
should be brought to the government treasury.

4
 lLl03/2024

Direct tax Vs. Indirect tax

Particulars Direct tax lndirect tax
Meaning Direct taxes are the taxes in lndirect taxes are such type of
which the incidence and impact taxes where incidence and
falls on the same impact fall on two different
person/assessee. persons.
Nalure of tax Direct tax is progressive in lndirect taxes are regressive in
nature. nature.
Taxable At the time of earning income. Pu rchase/sales/manufacture of
event goods and/or rendering services
Levy Direct tax is levied and collected lndirect tax is levied and
from the assessee collected from the consumer but
paid/ deposited to the national
exchequer by the
assessee/dealer.
Shifting of Tax burden is directly borne by Tax burden is shifted to the
burden the assessee. Accordingly the subsequenUultimate user
burden cannot be shifted.
Tax Tax is usually collected after the At the time of sale or purchase or
collection income, for a year, is earned. rendering of services )

LEGACY OF INCOME TAX LAW

Act, 2023

lncome Tax
Ordinance,1984

lncome Tax Act 1922

lncomeTaxAct of 1918
lncome Tax (Amendment) Act,1 91 6

lncome Tax Act, 1886

License Tax Act, 1 877
CertificateAcl, 1868
License TaxAct, 't867

10

5
 tLl03/2024

Bangladesh Thx Structure:

The tax structure of Bangladesh consists of both direct tax

(income tax, gift tax, travel tax, land development tax, non-
judicial stamp, registration, immovable property tax, motor
vehicle tax etc.) and indirect tax (customs duty, excise duty,
narcotics and liquor duty, VAI, Turnover tax, SD, etc.).

Analysis of revenue collection activities in Bangladesh reveals

that tax revenue accounts for roughly 90% of total government
revenue.

the fiscal year 2023-24 has been set by the govemment to Tk.
4.30,000 crore

Tax collection tarset of NBR for the fiscal vear

2023-24

l. Direct Tax flncome tax, Gift tax and Travel tax Tk. 1,53,260 (35.6%)
2. VAT Tk. 1,63,837 (38.1%)
3. Import and other Duty Tk. 52,200 (12.01%)
4. SD Tk. 60,703 (14.1%)
\
Total Tk. 4,30,000 crore

6
 LLI03/2024

New tax rate for the assessment 2023-24

lncome slab Rate Minimum tax

On the 1n Tk. 3,50,000/- of total income Nit After rebate, minimum tax for individual tarpayers are:
lFor woman & senior citizen Tk.4,00,0004
1) Ik.5,000/ in case of Ohaka & Chittagong City
On the next Tk. 1,00,000/- of total income 5%
Corporation area.
On the next Tk. 3,00,000/- of total income L0%
2) Tk. 4,fl10/ for other city corporation area,
On the next Tk. 4,00,000/- of total income L5%
3) Tk.3,000/ for other areas if total income exceeds the
On the next Tk. 5,00,000/- of total income 20%
minimum taxable ceiling.
On the balance of total income 25%

[1] For thard gender tax payers & physically handicappod persons threshold limit is Tk. 4,75,000/
[2] For gazetted war-wounded freedom fighter threshold limit is Tk.5,00,000.
[3] Threshold limit in case of parents or legal guardian of any physically challenged child or
dependent wiu be 50,000 taka more for each child/ dependent. lf both father and mother are
assessee then any one can avail this benefit.

[Finance Act,2023]

Rate of wealth surcharge for the assessment year 2023-24

Net wealth up to Taka 4 crore

Net wealth exceeding Taka 4 crore but not exceeding Taka 10 crore;
or
Ownership of more than 1 motor car
10% oftax
or
Ownership of House Property total 8,000 sft. in anywhere in Bangladesh

Net wealth exceeding Taka 10 crore but not exceeding Taka 20 crore 2Ooh of lax
Net wealth exceeding Taka2O crore but not exceeding Taka 50 crore 30% of tax

Net wealth exceeding Taka 50 crore 35% oflax

[Finance Act,2023]

7
 17/03/2024

COMPANY TAx RATE [ASSESSMENT YEARt2O23-241

Listed companies 20o/o or 22.5% or 25Yo

Non listed companies. Artificial Juridical Person & AOP 275% or 30Yo
One Person Company [OPC] 22.5% or 25Yo
Listed Bank, insurance & NBFI 37.s%
Non-listed Bank, insurance & NBFI 40%

Tax Reforms:
Some recent tax reforms are mentioned below:
(a) lntroduction of e-TlN:
Formerly each tax payer had a local registration number called GIR (General lndex
Register) number. ln 1994 nationwide unique 10 digit TIN (Tax payers ldentification
number) has been introduced. Presently electronic 12 digit TIN has been introduced
by the NBR replacing the old 10 digit TlN.
(b) Expansion of withholdinq tax:
Provisionally withholding tax was levied on salary and contractors/suppliers. To
increase the tax network it was gradually expanded. Now withholding tax is imposed
on 52 items. Major items include, contractors/supplies, importer, salary, bank deposit
etc.
(c) Simplification of tax assessment:
Self assessment system has been widened and expanded. At present all categories
of assessees are entitled to submit return under self assessment system. ln this

post audil
(d) Online rctum filinq:
The system of online return filing has been introduced on 1 "t November,2016 and by
so doing all categories of assessee now can easily submit their tax return
online.

8
 LL/03/2024

END OF THE PRESENTATION

I
/ r-l )

L \
l