DEEMED INCOME- SECTION 19 Total 28 subsections related to 4 heads of income: 1. Income from House Property 1 sub-section: (22) 3.

. Income from Business of Profession 7 sub-sections: (6), (14) (16), (18), (20) & (23) 2. Agricultural Income 2 sub-sections: (17) & (19) 4. Income from other Sources 18 sub-sections: (1)(5), (7)(13), (21), (21A), (21B), (24), (26), (27) Section Items of deemed Grounds of considering as deemed income Year during which Head of income Extent of the income added to total under which deemed income to income added be added with total income 19(1) Unexplained cash credit in the books of accounts Unrecorded investment or acquisition of bullion, jewellery or other valuable articles Unexplained expenditure Unrecorded investments Offering no explanation about the nature and source of the credited amount, or the explanation offered is not satisfactory in the opinion of the Deputy Commissioner of Taxes (DCT). Amount expended in the investment or acquisition of the valuable articles exceeds the amount recorded in this behalf in the books of accounts and no explanation is offered about the excess amount or the explanation offered is not satisfactory in DCTs opinion Offering no explanation about the nature and source of the money for the expenditure, or the explanation offered is not satisfactory in DCTs opinion. Investments are not recorded in the books of accounts, if any, for any source of income and no explanations is offered about the nature and source of fund for the investments, or the explanation offered in not satisfactory in DCTs opinion. Same income year for which the cash credit is done in the books of accounts. Same income year for which the books of accounts are maintained Same income year in which the expenditure is incurred Same financial year immediately preceding the assessment year for which the investments are made Same financial year immediately preceding the assessment year for which the ownership of the assets in Income from other sources -doEntire amount

19(2)

Excess of the amount expended over the amount recorded Entire amount of expenditure The value of investments

19(3)

Income from other sources -do-

19(4)

19(5)

Unrecorded ownership of money, bullion, jewellery or other valuable articles

The assessee is found to be the owner of the money, bullion, jewellery or other valuable articles which is not recorded in the books of accounts, if any, maintained for any source of income and he offers no explanation about the nature and source of fund for acquiring the assets or the explanation offered is not satisfactory in DCTs opinion.

-do-

The money or the value of the bullion, jewellery or other valuable

Section

Items of deemed income

Grounds of considering as deemed income

Year during which added to total income

Head of income under which added

Extent of the deemed income to be added with total income articles.

found. 19(6) Income derived from discontinued business or profession Dividend declared or distributed Difference between the underpaid purchase price and the fair market value of any assets (other than stock-intrade or stocks & shares) Salami or premia receipts by virtue of any lease The business or profession has been or was discontinued at any time before the commencement, or during the course of any income year and any income from such business or profession would have been chargeable to tax if it had been received in the income year in which it accrued or arose. Dividend has been declared or distributed by a company The asset has been purchased from any company and the DCT has reason to believe that the price paid is less than the fair market value thereof Same income year during which the income is derived The income year in which the dividend is received Year of purchase Income from business or profession Income from other sources -do-

Entire amount

19(7) 19(8)

Entire amount Difference between the price paid and the fair market value.

19(9)

The salami or premia are received or receivable by virtue of lease as a lump sum amount

Usually the income year of receipt, but at the option of the assessee, the amount may be allocated for assessment purpose proportionately to the years covered by the entire lease period, but not exceeding 5 years

-do-

Entire amount in the receiving income year or proportional yearly amount in other case

Section

Items of deemed income

Grounds of considering as deemed income

Year during which added to total income

Head of income under which added

Extent of the deemed income to be added with total income Entire amount

19(10) 19(11)

19(12)

Goodwill money or receipt as compensation or damages Benefit or advantage for cancellation of indebtedness Managing agency commission Accidental income Income from insurance business carried on by a mutual insurance association (a) Receipt back of loss, bad debt or expenditure (other than bank interest) (aa) Bank interest or share of profit remaining unpaid for 3 years

The amount is received by way of goodwill money or receipt in the nature of compensation or damages for cancellation or termination of contracts or licenses by the Government or any person. The benefit or advantage, whether convertible into money or not, is derived or account of cancellation of indebtedness [not applicable for bank loan/interest waiver]. The managing agency commission including compensation is received for termination of agencies or any modification of the terms and conditions relating thereto. The income is received 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. Profits and gains are derived from insurance business carried on by the mutual insurance association and computed according to provisions of paragraph 8 of the fourth schedule to the Income Tax ordinance(ITO) Any amount of deduction was allowed in the part for any loss, bad debt or expenditure and subsequently received back in cash or in any other manner Interest payable to any commercial bank, or the Bangladesh Shilpa Bank or the Bangladesh Shilpa Rin Sangstha, or share of profit payable to a bank run or Islamic Principles, though not paid actually, was allowed as deduction because of

Income year during which the amount is received Income year during which the benefit is derived Income year during which the commission is received Income year during which the income is received Income year during which the profits and gains are received Income year during which the receipt is happened Income year immediately following the expiry of 3 years after the

Income from other sources Income from other sources

Money of the benefit or advantage Entire amount

-do-

19(13)

-do-

Entire amount

19(14)

Income from business or profession

Entire amount to be the income of the mutual insurance association Amount of receipt

19(15)

Income from business or profession -do-

Amount repining unpaid.

Section

Items of deemed income

Grounds of considering as deemed income

Year during which added to total income

Head of income under which added

Extent of the deemed income to be added with total income

(b)Benefit received regarding unpaid trading liability (c) Trading liability or portion thereof remaining unpaid for 3 years

mercantile system of accounts, but unpaid within 2 years after the expiry of the concerned year of deduction Benefit has been derived regarding any trading liability for which deduction was allowed in the part and it has not been already treated as income A deduction was allowed in the part for a trading liability, but it has not been paid partly or fully within 3 years of the expiration of the concerned year of deduction.

concerned year of deduction Income year during which the benefit is derived Income year immediately following the expiry of those 3 years

-do-

The value of the benefit Amount remaining unpaid

Income from business or profession

19(16)

Profit from sale of business building, machinery or plant

The building, machinery or plant used for business or profession is disposed of and the sale proceeds thereof exceeds the written down value (WDV)

Income year during which the asset is disposed of

Income from business or profession

Excess of sale proceeds over the written down value (up to the difference between original cost & WDV) -do-

19(17)

19(18)

Profit from sale of agricultural machinery or plant. Insurance, salvage or compensation moneys regarding business building, machinery or

The machinery or plant exclusively used for agricultural purpose is disposed of and the sale proceeds thereof exceeds the WDV The insurance, salvage or compensation moneys are received in respect of building, machinery or plant used for business or profession which is discarded, demolished or destroyed and the amount of such money exceeds the WDV of the asset

-do-

Agricultural income Income from business or profession

Income year during which the money are received

Excess of the moneys over the WDV (up to the difference between

Section

Items of deemed income

Grounds of considering as deemed income

Year during which added to total income

Head of income under which added

Extent of the deemed income to be added with total income the original cost and WDV less the scrap value

plant

19(19)

Insurance salvage or compensation moneys regarding agricultural machinery or plant Sale proceeds of any asset representing capital expenditure on scientific research related to business

The insurance, salvage, or compensation moneys are received regarding machinery or plant used exclusively for agricultural purpose which is discarded, demolished or destroyed and the amount of such moneys exceeds the WDV of the asset The asset represents expenditure of a capital nature on scientific research related to business [as per the meaning of section 29(1) (xx)] and is sold

-do-

Agricultural income

-do-

19(20)

Income year during which the asset is disposed of

Income from business or profession

Sale proceeds [up to the capital expenditure on scientific research in Bangladesh related to business allowed as deduction as per section 29(1) (xx) The sum or part there of remaining unpaid

19(21)

19(21A)

Loan from any person other than a banking company or a financial institution remaining unpaid for 3 years Loan or gift

Any sum or aggregate of sums exceeding Tk.1 lakh is claimed or shown to have been received as loan from any person, other than a banking company or a financial institution, otherwise than by a crossed cheque drawn on a bank, and the loan is not paid back in full within 3 years from the end of the income year is which it is claimed or shown to have been received. Where any sum is claimed to have been received by an

Income year immediately following the expiry of 3 years after the end of concerned year of taking loan The income year in

Income from other sources

Income from

The loan or gift

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Items of deemed income

Grounds of considering as deemed income

Year during which added to total income

Head of income under which added

Extent of the deemed income to be added with total income

19(21B)

received from initial capital shown by other person in his return under selfassessment scheme during the period of limitation Initial capital transferred within the period of restriction (FA2011) Receipt from tenant not adjustable against rent (Security money)

assessee as loan or gift during any income year from a person who has transferred the sum within the period of limitation stipulated in the rule made under the ITO, from the initial capital of his business or profession shown in his return filed under section 83A (i.e., under self-assessment scheme) [Note: Sec. 83A omitted by FO 2008; thus ineffective from AY 2008-09]. Applicable to any assessee having income from business of profession Violation of the bar at section 82BB to transfer partly or fully initial capital formed under universal self assessment scheme within 5 years of its formation. An owner of a house property receives any amount from tenant which is not adjustable against rent

which the loan or gift is received

other sources

The income year of transfer

Income from other sources

Amount transferred

19(22)

19(23)

Prescribed portion of export value of garments exportable against the export quota transferred to other person

An exporter of garments transfers to pay person, the export quota or any part thereof allotted to him by the Government

The income year in which the amount is received, or at the option of the assessee, the amount may be allocated for assessment purpose in equal proportion for 5 income years Income year during which the export quota is transferred

Income from house property

Entire amount in the receiving income year or proportional yearly amount in other case

Income from business or profession

Prescribed portion of the export value of the garments exportable against the transferred quota (this is 3% of

Section

Items of deemed income

Grounds of considering as deemed income

Year during which added to total income

Head of income under which added

Extent of the deemed income to be added with total income

export value u/r 30A)

Increase in paidThe income year of Income from Entire amount The amount is not received by crossed cheque or up capital by equity receipt other sources bank transfer issuing shares This will be treated as the income of the company. received by an assessee being a private limited company or public limited company not listed with a stock exchange 19(26) Loan taken by a Income from Entire amount The loan is not received by crossed cheque or bank The income year of company taking loan other sources transfer otherwise than by This will be treated as the income of the borrowing a crossed cheque company. or bank transfer (FA2011) 19(27) Purchase or hire The income year of Income from 50% of the amount Applicable for company only of motor car purchase or hire other sources that exceeds 10% If the company purchases directly or at hire where the value purchase system any car or jeep value of which of paid up capital exceeds 10% of exceeds 10% of its paid up capital then 50% of the the paid-up capital amount that exceeds 10% of paid up capital (FA2011) Deemed income subsequently to be allowed as deductions on payment or refund: i) Proviso to section 19(15) (c) : Trading liability or portion thereof remaining unpaid for 3 years is deemed to be income with the expiry of these 3 years but if it is paid in a subsequent year, the amount paid shall be deducted in computing income of the year of payment. ii) Proviso to section 19(21): Personal loan previously considered as deemed income for non-payment within 2 years from the end of the year of taking loan, if paid in a subsequent income year, the amount paid is to be allowed as deduction in the year of payment. 19(24)

iii)

Proviso to section 19(22): Unadjustable security money received by a house-owner from tenant if refunded partly or fully in a subsequent year, the amount refunded to be allowed as deduction in the year of refund.