Fundamentals of Taxation

Definition Salary Section 21(1) & 21(2)

Sec. 21(1) of the Ordinance
The following income of an assessee shall be classified and computed under
the head “Salaries” namely
(a). any salary due from an employer to the assessee in the income year,
whether paid or not;
(b). any salary paid or allowed to him in the income year, by or on behalf of
an employer though not due or before it became due to him; and
©. any arrears of salary paid or allowed or alowed to him in the income
year by or on behalf of an employer , if not charged to income tax for
any earlier income year.
Sec. 21(2) of the Ordinance
Where any amount of salary of an assessee is once included in his tota
income of an income year on the basis that it had become due or that it
had been paid in advance in that year , the amount shall not again be
included in his income of any other year.
Fundamentals of Taxation
Definition Salary Section 21(1) & 21(2)
“Salary is the remuneration or compensation for
the services rendered, paid or to be paid to an
employee at regular intervals in terms of such
employment. Such remuneration or compensation
has been specifically stated to include dearness,
gain, compensation or cost of living allowance and
bonus and commission which are payable to an
employee as remuneration or compensation for
services rendered.” (Commissioner of Taxes v.
Telephone Shilpa Sangstha Ltd. 46 DLR 696)
Fundamentals of Taxation
Definition Perquisite Sec. 2(45)
Perquisite means any payment made to an employee by an
employer in the form of cash or in any other form excluding
basic salary, festival bonus, incentive bonus not exceeding
ten percent of the disclosed profit of relevant income year,
arrear salary, advance salary, leave encashment or leave
fare assistance and over time, and
Any benefit, whether convertible into money or not,
provided to an employee by the employer, called by
whatever name, other than contribution to a recognised
provident fund, approved superannuation fund.
Fundamentals of Taxation
Definition Perquisite Sec. 2(45)
Perquisite includes
1. the value of rent free accommodation;
2. the value of any concession in the matter of rent
respecting any accommodation;
3. any sum payable by the employer, whether directly or
indirectly, to effect an insurance on the life of, or to
effect a contract for an annuity for the benefit of, the
assessee or his spouse or any of his dependent child;
4. the value of any benefit provided free of cost or at a
concessionary rate ; and
5. any sum paid by an employer in respect of any
obligation of an employee.
Fundamentals of Taxation
Computation of Income From Salary
Heads Amount Amount of exempted Net taxable
income income

Basic Salary Nil Total amount

received
Special Salary Nil Total amount
received
Dearness Nil Total amount
Allowance received
Conveyance Upto Tk. 30,000.00 per Amount
Allowance year exceeding Tk.
30,000.00
Fundamentals of Taxation
Computation of Income From Salary
Heads Amount Amount of exempted income Net taxable income

House Rent Tk. 20,000.00 per month Amount

Allowance or 50% of monthly basic exceeding the
salary, whichever is less figure so
calculated
Medical Amount received or Amount received
Allowance actual amount of in excess of
expenses incurred, which actual expenses
ever is less
Servant Nil Total amount
Allowance received
Leave Pay Nil Total amount
received
Honorarium/ Nil Total amount
Reward/Fee received
Fundamentals of Taxation
Computation of Income From Salary
Heads Amount Amount of Net taxable
exempted income income

Overtime Nil Total amount

allowance received
Bonus/Ex-gratia Nil Total amount
received
Employer’s Nil Total amount
contribution to received
recognized
provident fund
Interest on Total amount Nil
recognized received
provident fund
Fundamentals of Taxation
Computation of Income From Salary
Heads Amount Amount of exempted Net taxable
income income

Deemed If the assessee is 7.5% of basic

income for provided with a car for salary
transport personal use
facility
Deemed If the assessee is 25% of basic
income for provided with rent free salary
free/subsidized furnished/unfurnished
accommodation accommodation
If the assessee is
provided with Excess of 25%
furnished/unfurnished of basic salary
accommodation at and the
concessional rate amount of
actual rent
which ever is
higher
Fundamentals of Taxation
Computation of Income From Salary
Heads Amount Amount of exempted Net taxable
income income

Others, if any If the assessee is Monetary value

provided with of the services
watchman for so rendered by
residence, gardener, the employer
cook, caretaker,
servant, driver or any
other facilities