lncome Year

&
Assessment Year

Ranjan Kumar Bhowmik Pcnr

Member
National Board of Revenue
lncome vear:
1984, lncome year is usually the financial
[1] As per section 2(35) of the lncome Tax Ordinance,
year immediately preceding the assessment year.

income year must be the

[2] But in case of bank, insurance and non-banking financial institution
English calendar year commencing from the 1't day of January.

office the DCT may allow a

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

business starting,
[4] lncome year may be less than 12 months in certain situations especially
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 1't July and ends on 30th June every year. This period is also
known as the financiai 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(9) of
the lncome Tax Ordinance, 1984; the term "Assessment vear" means the period of 12
months commencinq on the first dav of Julv everv year. ln case of business discontinuance,
yearrelatedfinancialyearshallbedeemedtobethe
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
30.06.2019 2018-19 2019-20 15.01.2020
01110118 to 30/9/19 2020-21 15.09.2020
30.09.2019
2019 2020-21 15.09.2020
31.12.2019
0114118 to 31/3/19 2019-20 15.10.2019
31 .03.2019
01l1l18 to 3117119 2020-21 15.09.2020
31.07.2019

@'-'

wto07/3/2020 Page 1ol2

Irrconreycar&"r."r.,,.,"uty"ii RanianKumarBhowntikFCMA asamendecl

e
 Generally, income is taxed in the subsequent year to the income year. But, in certgil cases,
to proteci 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 assessntent year are discussed as under'
any business or profession
[1] lncome of discontinued business [Section 89(2)]: Where
L Oiscontinued in any assessment year,lhe 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.
121 Persons leaving Bangladesh [Section 92)(b)]:Whenever any person is leaving
'eangtadesh
and has no intention to come back, the DCT may proceed to assess him for all
the 6ompleted 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.
102(2) of the
[3] lncome of non-resident shipping companies [Section 102(2)l: Section in the
ifb f g84, provides for the taxation of income of non-resident shipping companies
do not
year in which they earn their income in Bangladesh, provided that such companies
have any representative here.

The End

as amended uPto 07/ 3 /2020 Paga 2 of 2

lncornc ycar & assessment Year RanjanKumar Bhowrnik F-CMA