Income Year

&
Assessment Year

Ranjan Kumar Bhowmik FCMA

Former Member
National Board of Revenue
Income year:
[1] As per section 2(15) of the Income 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 1st day 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] Income 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 year:

Assessment year means the year following the financial year, i.e. income year. Thus, the
assessment year always begins on 1 July 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 Income Tax Act, 2023; the term "Assessment year" means the period
of 12 months commencing on the first day of July every year. In case of business
discontinuance, person leaving Bangladesh et. 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
Income year Income year Assessment year Tax Day
ended on For company taxpayer
30.06.2023 2022-23 2023-24 15.01.2024
30.09.2022 01/10/21 to 30/9/22 2023-24 15.09.2023
31.12.2022 2022 2023-24 15.09.2023
31.03.2023 01/4/22 to 31/3/23 2023-24 15.10.2023
31.07.2023 01/8/22 to 31/7/23 2024-25 15.09.2024

Exceptions to the rule of Assessment Year:

Generaly, 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.

Income year & assessment year Ranjan Kumar Bhowmik FCMA as amended up to 24/3/2022 Page 1 of 2
 The
assessment vear and the income year may be the same.
Tnus, In those cases the assessment year are disCussed as
under:
exceptions to the normal rule of or
discontinued business Section 191]: Where any business the
[1] Income of assessment year, the income of the period from
profession is discontinued in any charged to
date of such discontinuance may be
expiry of the last income year up to the
tax in that assessment year.
193]: Whenever any person is leaving
[2] Perssons leaving Bangladesh [Section may proceed to assess him for
Bangladesh and has no intention to come back, the DCT
assessments remain pending as well as for
all the completed income years for which his Bangladesh.
the broken period up to the probable date of his departure from
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.
the
[3] Income of non-resident shipping companies [Section 259]: Section 259(2) of in the
ITA, 2023, 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
 ADVANCE PAYMENT OF TAX

Ranjan Kumar Bhowmik rcMA

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 pay 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
agricultural income does not exceed Tk. 8,00,000 he will not have to pay any
advance tax. [section 154]
(2) What is the basis on which advance paymentsshould 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/
[excluding 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 [excluding capital gain and one-time
income] 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 FCMA as amended up to 03/7/2023 based on Income Tax Act,2023 Page I of2
 Ist instalment 15th September
2nd instalment 15th December

3rd instalment 15th March

4th instalment 15th June

advance tax?
(4) Whether withholding tax at source will be treated as

Yes, withholding tax is also to be treated as advance payment of tax. (Sec. 155]
(5) What will happen in case of excess payment of advance tax?

If the advance tax paid by the assessee exceeds the tax payable by him on
regular assessment, Govt. willpay simple interest on excess payment @10% per
annum to be calculated from 1t July of the respective assessment year to the
date of regular assesSment but not more than 2 years. [Section 161]
(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.
[Sec.155(5)]
(7) What are the consequences in case of failure to pay advance tax?

The consequences are as follows:

I. Assessee will be treated as an assessee in default. [Sec. 157]
II. Simple interest @ 10% per annum will be chargeable on the
amount falls short from 75% of the assessed tax to be calculated
from lst 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 l00% of the shortfall[Sec. 269).

Advance Tax prepared by Ranjan Kumar Bhowmik FCMA as amended up to 03/7/2023 based on Income Tax
Act,2023 Page 2 of2
 Deemed income (Income 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 Isection 67(2)1

Where any sum is found credited in the books of an assessee, maintained for any income year and the
assessee offers noexplanation 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 [section 67(3)1
Where, in any incomne 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 paid against acquiring asset [section 67(4)1
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 paidand 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)1
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 shallbe deemed to be the income of such assessee for that income year under
the head income from other sources".
Salami or premia receipts Isection 67(61
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 payment in acquiring asset [section 67(7)|
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 (section 67(8)1

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 (section 67(9)I
 assessee during any income year by way of winnings frOm lotteries,
unt 1s received by an of anv sort or from gambling or betting in any form
vaosword puzzles, card games and other games the head
be his income for that income year under
t y nature whatsoever shall be dcemed to
"income from other sources
Equity received from shareholders in cash [section 67(10E
of cash
Where a company not listed with any stock exchange, receives paid up capital in the form
Trom 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 by any company otherwise than by bank transfer Isection 671)E

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 snall be
deducted in computing the income in respect of that subsequent year.
Buyinghiring motor car/Ëeep by a company [section 67(12)]:
Where any company, purchases directly or on hire one or more motor car or jeep and value of any
motor car or jeep exceeds 10% of its paid up capital together with reserve and accumulated profit,
then 50% of the amount that exceeds such 10% 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/gift/advanceldeposit received by an assessee other than bank transfer (section 67(13)1
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/
Building construction material if purchased on credit but not paid back within 2years
[section
67(14)1:
Where an assessee, other than real estate company, purchases on credit any building
material, the sum or any part thereof which has not been paid back within 2 years from theconstruction
end of the
income year, the unpaid amount shall be deemed to be the income under the head "income fromn
Sources" other

Showing tax free income or income where reduced tax rate is applicable at
175 or 180 or 212 [section 67(15)]: revised return u/s
Where an assessee files an amended/revised return under section 175, 180 or
212
exempted income or income subject to reduced tax rate, that income will be treated asand shows any
$income from
other sources" and regular tax rate will be applicable thereon.
Provided that, in case where banking channel is involved and supporting
support of exempted income or reduced tax rate, then the provision evidence can be produced in
of this section will not be
applicable.
 Set-off &Carry forward of losses
Ranjan Kumar Bhowmik FCMA
Former Member
National Board of Revenue

1]Introduction
An assessee may have multiple sources of income. It 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-offcannot be done. In such a situation, loss of one year can be carried
forward 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
tor 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 forward, 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) Set-off of losses
b) Carry forward and then set-off of losses
[21 Set-off of losses
Where, in respect of any assessment year, the net result of computation of income under any
head is aloss, 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.
Ifafter settingoff losses against income under the same head the net result is still aloss, Such
loss may be set-off against income of the same year under any other head.
The table produced below may be used as a short-cut quideline 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 FCMA Former Member, NBR as on 16/8/2023 Page 1
[31 Carry forward of losses [Section 70(5)1
for cOverage
Carry forward is the transferring of loss of one year to the succeeding year or years section 70, it
be set-off under
ifset-off was not possible or insufficient. If loss at any head cannot of asubsequent year.
of income
can be carried forward and set-off against that particular head
And no such loss cannot be carried forward beyond 6 successive assessment years.
[41 Carry forward of business loss and unabsorbed depreciation [section 70(5) +section 71]
If 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
following 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
set-off 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.
In a scheme of amalgamation, the amalgamated company shall have the right to carry forward
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.
In 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. [CIT Vs. International Industries Ltd. [1952]22 ITR 44]
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 ís that of succession by inheritance as mentioned at section
70(6)of ITA,2023.
[5 Carry forward of Partnership firm's losses [Section 70(4) + 70(6)1
In the case where the assessee is a partnership fin, 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
fim 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 asubsequent 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 fim 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] Income Tax Act, 2023
(2]Court case references
The End

Set-off &carry forward of losses prepared by Ranjan Kumar Bhowmik rcMA Former Member, NBR as on 16/8/2023 Page 2
 26/09/2023

Company Tax Assessment

TAX
Presented
by
Ranjan Kumar Bhowmik FCMA

Former Member
National Board of Revenue 1

Classification of Companies:
For preferential tax 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 (0PC)

1
 26/09/2023

Publicly Traded Company:

company
"Publicly traded Company" or listed following
means a company which fulfills the
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 year.

Mandatory TIN:
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 inclkding foreign shareholder is mandatory at the
time of registration of a company under the Companies Act,
1994

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.

4
 26/09/2023

Submission of Income Tax Return

Return must be filed within the Tax Day

§ From the following example, we can see how to find out

the assessment year and tax day:
Income year Income year Assessment Tax Day
ended on year For company taxpayer
30.06.2023 2022-23 2023-24 15.01.2024
30.09.2022 01/10/21 to 30/9/22 2023-24 15.09.2023
31.12.2022 2022 2023-24 15.09.2023
31.03.2023 01/4/22 to 31/3/23 2023-24 15.10.2023
31.07.2023 01/8/22 to 31/7/23 2024-25 15.09.2024

Signatory
The returnshould be signed by the principal officer. Principal
officer may be
(a) Managing director, manager, secretary, treasure,
CEO,CFO or accountant (by whatever designation
any officer responsible for management of the affairs,known),
or
or of the
accounts, of the 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
thereof. officer

6
 26/09/2023

Documents to beattachedwith return:

* Audited Statement of accounts.

Income Computation sheet if taxable income
differ from net profit shown at audited
statement of accounts

Maintenance ofAccounts

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 by a chartered accountant to the effect
that accounts are maintained according to lAS
and reported in accordance with IFRS and to be
audited as per ISA.

8
 26/09/2023

Allowable expenditure

Any expenditure incurred wholly &

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

Inadmissible Expenditure Isection-551

* Any payment where tax is deductable but not deducted [sec.55(a)]
Salary, remuneration, interest and commission paid to any partner
of the partnership firm or member of any AOP. [sec.55(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)]

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

10
 26/09/2023

Limit of free samples expenditure

% of turnover
Turnover
Pharmaceutical Food, Cosmetics Other
and Toiletries Industry
Industry
industry
1% 0.50%
Up to Tk. 5 crore 2%

1% 0.50% 0.25%
Exceeding Tk. 5
crore, but up to
Tk. 10crore
0.5% 0.25% 0.10%
Exceeding Tk. 10
crore

Section 55(0) 11

Entertainment expenditureexceeding the following limits:

Income Limit
On 1st Tk. 10 lac 4%
Onthe balance 2%
[Section 55(h)]

Head Office expenditure or intra-group expenditure

exceeding 10% of the disclosed net profit applicable for
foreign company [sec. 55()]
Royalty and technical know-how fee exceeding10% of
the disclosed net profit. [sec. 55(e)]

12
 26/09/2023

Inadmissible Expenditure
Salary If paid otherwise than by bank transfer (sec.55(k)]
Impalrment loss [sec. 55(t)]
Overseas traveling exceeding 0.60% of disclosed business
turnover. However, exceeded amount wll also be allowed if proper
evidence and justificatlon can be provided. [sec.55(9)1
* Any commission or discount paid by any company to its
shareholder director [sec. 65(c)]
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
[sec. 55(m + n)]
13

Inadmissible Expenditure
o Any payment by way of any rent of any property whether
used for residentialor commercial purpose, otherwise than
bybank transfer [sec. 55(L)]

o Any payment to any agent/distributor 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-TIN (sec. 55(0)]

Promotional expenses exceeding 0.50% of disclosed business

turnover [sec. 55)]

Contribution to any fund which is not approved by the

NBR[sec. 55(u)]
14
 26/09/2023

Inadmissible 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(9)]

* Any expense which are not connected with business operation

[sec. 55())
$ 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 Income Tax Rates for
Assessment Year
Company
2023-24
(1) Capital Gain (2nd schedule) 15%

(2) Capital Gain from sale of shares of 10%

Bank, listed companies
Insurance, 20%
Financial (3) Dividend Income
Institutions (4) Other Income Both publicly traded 37.5%
and not publicly traded
company

16
 26/09/2023

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 27.5% 30%

22.5% 25%
One person company [OPC]

Preconditions to avail new tax rate:

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

[Finance Act,2023]

Conditional Listed company tax rate for the

assessment year: 2023-24
tax rate Preconditions

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

[2] All sales/receipts must be through banking channel
(3] In case of investment and expenditure, per transection
exceeding Tk. 5,00,000 must be through banking channel and
NON-COMPLIANCE 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 22.5%

22.5% (1]10% or less than 10% paid-up capital through IPO

[2]All sales/receipts must be through banking channel
(3] In 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%

[Finance Act,2023]
 26/09/2023

Assessment Year
Heads/sources of Income
Types of 2023-24
Company
15%
(1)Capital Gain ( 2nd schedule)
10%
(2) Capital Gain from sale of shares of
listed companies 20%
Mobile (3) Dividend Income
Phone (4) Other For publicly Traded 40%
Income Company
Other than publicly 45%
Traded Company

19

Fiscal Incentives:
(1) Tax Holiday
The company is allowed tax holiday for 5 years or 10 years
depending on the location of the industry
(a) Dhaka, Mymensingh and First year
Chittagang division (excluding 90%
Second year 80%
Dhaka, Narayangonj, Gazipur and Third year 60%
Chittagong district and also the hill 5
Fourth year 40%
district of Rangamati, Bandarban Fifth year
and Khagrachari) 20%

(b) Rajshahi, Khulna, Sylhet, Barisal First year and Second year 90%
and
Rangpur excluding city Third year 80%
corporation area (including the hill Fourth year 70%
district of Rangamati, Bandarban Fifth year 60%
and Khagrachari) 10 Sixth year 50%
Seventh year 40%
Eighth year 30%
Ninth year 20%
Tenth year 10%
 26/09/2023

Fiscal Incentives:
(2) Tax Exemption for industries set-up at Economic Zone
and High Tech Park
First year, Second year and Third year 100%
Fourth year 80%
Fifth year 70%
Sixth year 60%
Seventh year 50%

Eighth year 40%

Ninth year 30%
Tenth year 20%

[SRO no 226 + 228 dated 10/8/2016]

21

Other Tax Exemptions

I. Industries set up in EPZ will also enjoy tax exemption
for 5/7 years depending on the location. [SRO no- 219
Ain/2012 dated 27/06/2012]
II. Income from 'Computer Software development
business run by Bangladeshi resident is exempted from
tax up to 30/06/2024[para-33 of 6th Schedule (Part-A)I
II. Income of the private power generation company up to
15years from itscommercial production. [SRO no- 36
Ain/97 dated 03/02/1997]
IV. Any income from the export of handicrafts for the
period from lst day of July, 2008 to the 30th day of
June, 2024. (Para-35 of 6th Schedule (Part-A))
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IT relatedtax exempted sectors

1. Software development
2. Software or application customization
3. NTTN
4. Digital content development & mgt.
5. Digital animation development
6.Website development
7.Website services
8.Web listing
9.IT process outsourcing
10.Website hosting
11.Digital graphics design
12.Digital data entry and processing
13.Digital data analytics
14.Geographic Information
Services(GIS)
15.T support & software maintenance
services
16.Software test lab services
17.Call centre services
18.0verseas medical transcription
19.Search engine optimization services
20.Document conversion and imaging
Digital archiving
21.Robotics process outsourcing
22.Cyber security services
23. Cloud service
24. System integration
25. e-learning platform
26. e-book publication
27. Mobile application development service
28. IT Freelancing
23

Corporate Social Responsibility

o 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.
o CSR is about how businesses align their values and behavior with the
expectation of stakeholders-not just customers and
employees, suppliers, commünities, regulators, investors,
but also
groups, and society as a whole. special interest
o It is the company's commitment to be accountable to its
CSR demands that businesses manage stakeholders.
environmental impacts of their operations. the economic, social, and

SRO no-223 datet.27/6/2012

SRO no.186 dated 01/7/2014

24
 26/09/2023

Corporate Social Responsibility

The companies will get 10% tax rebate on the lower
amount of the following three:
20% of total
income

OR Tax rebate
Whichever is @10% is
lower is to be
TK. 12,00,00,000/= applicable on
treated as
allowable CSR such allowable
OR
CSR.

Actual money spent for

CSR
The tax provision clealy specified 23 areas where the companies can
perform their CSR for availing the benefit of tax rebate.
25

Areas of CSR
& natural calamities
& old home
welfare of retarded persons
education of p0or children
accommodation of slumdwellers
awareness program of anti-dowry and women rights
* rehabilitation of poor and orphan children
research on liberation war related subject
sanitation in Chittagong hill tracts
treatment of cataract, cancer, leprosy
treatment of acid victims
* free medical treatment to the poor by specialized hospital
* public university
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Areas of CSR (Cont...)

technical and vocational education
* 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 HIV,AIDS and Drug addicted
Donations made to non-profit voluntary social welfare organizations
engaged for running rehabilitation center for recovered
children/women of cross boarder trafficking.
3 Donation to any special calamities or tournament or any national
program approved by the Govt. 27

Conditions to qualify for CSR

*regularity in payment of salary to staff
having waste treatment plant in industry
3 loan
regularity in payment of Income tax, VAT, Duty and
CSR only through govt. approved institutions
Compliance of Labor Lavw.
amount spent for CSR will not be considered as
business expenditures
o documents in support of actual expenditure of CSR
to be submitted to the concerned DCT
Submit CSR plan to NBR and obtain exemption
certificate

END OF THE PRESENTATION

28
 Salary Tax

TAX
Paper presented by:

Ranjan Kumar Bhowmik rMA

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
Investment Tax Rebate calculation
Present tax rate
TDS from salary
 Definition of Salary
There is no exhaustive definition of salary at Income Tax Ordinance, 1984.
Only an inclusive definition is given where "salary" includes the following:
$ Pay or Wages
$ Annuity
Pension-Fully taxfree as per 6th Schedule (Part-1) Para-4
Gratuity-Partly tax free up to Tk. 2.5 crore as per 6th Schedule(Part-1)Para-5
Fees
§ Commission
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 Income Tax Act,2023]

Income 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,
received or not ;
whether

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.
Salary once included in any year on due basis or advance payment basis is not
includible again in salary income of an employee of any other year.

Section 32(1)of ITA, 2023

 Share Based Payment

jshare based payment will be a part of

Salary Income

Fair Value at Cost of Acquiring Salary Income

Exercise Date the Shares

Sale of Share-options will also be taxable under the head

income from employment
[Section 34 of Income Tax Act,2023]

Perquisites
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) Arrear Salary
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 ITAct, 2023

6