Bangladesh Tax Handbook 2015-2016

TABLE OF CONTENTS
TABLE OF CONTENTS
TABLE OF CONTENTS
TABLE OF CONTENTS
MAJOR CHANGES IN 2015 - 2016................................................................. 1
1
Major changes in Income Tax.............................................................. 3
2
Major changes in Value Added Tax (VAT)................................................ 22
SUMMARY OF INCOME TAX........................................................................ 23
3
Important definitions...................................................................... 25
INCOME ......................................................................................... 26
4
Residential status.......................................................................... 26
5
Scope of the total income................................................................ 26
6
Heads of income............................................................................ 27
7
Income from salary........................................................................ 27
8
Interest on securities...................................................................... 29
9
Income from house property............................................................. 30
10 Agricultural income........................................................................ 31
11 Income from business or profession..................................................... 32
11.1 Admissible deductions.............................................................. 33
11.2 Deductions not admissible in certain circumstances.......................... 35
11.3 Normal depreciation allowance.................................................. 36
11.4 Initial depreciation................................................................. 38
11.5 Accelerated depreciation allowance............................................. 38
11.6 Amortization of license fees...................................................... 39
12 Capital gains................................................................................ 39
13 Income from other sources............................................................... 40
14 Deemed income............................................................................ 41
TAX RATE STRUCTURE............................................................................ 44
15 Personal tax rate structure............................................................... 44
15.1 Tax on capital gain.................................................................. 45
15.2 Other tax rates...................................................................... 45
15.3 Minimum tax......................................................................... 45
15.4 Surcharge on individual assessee................................................. 45
15.5 Incidence of tax on non-resident assessee...................................... 46
16 Corporate tax rate structure............................................................. 46
16.1 Minimum tax......................................................................... 47
16.2 Additional tax....................................................................... 48
16.3 Excess profit tax..................................................................... 48
TABLE OF CONTENTS
17
Tax deducted at source................................................................... 48
18
Payment of tax deducted at source..................................................... 58
19
Final settlement of tax liability.......................................................... 59
20
Set-off and carry forward of loss........................................................ 61
21
Carry forward of depreciation allowance.............................................. 62
FILING OF RETURN & PAYMENT OF TAX........................................................ 63

22
Filing of return of income................................................................. 63
23
Filing of revised return.................................................................... 64
24
Return of withholding tax................................................................. 64
25
Payment of tax on the basis of return.................................................. 65
26
Advance payment of tax.................................................................. 65
27
Mode of payment........................................................................... 65
ASSESSMENT........................................................................................ 66
28
Provisional assessment.................................................................... 66
29
Assessment on correct return............................................................ 66
30
Universal self-assessment................................................................. 66
31
Spot assessment............................................................................ 67
32
Assessment after hearing................................................................. 67
33
Assessment on the basis of report of a Chartered Accountant...................... 68
34
Best judgement assessment.............................................................. 68
35
Other assessments......................................................................... 68
TAX INCENTIVE..................................................................................... 69
36
Tax exemption.............................................................................. 69
37
Reduced rate of tax........................................................................ 87
38
Tax rebate................................................................................... 90
39 Conditions for tax exemption for newly established industrial undertaking and
newly established physical infrastructure facility.................................... 93
40
Investment allowances eligible for tax credit......................................... 93
41
CSR activities eligible for tax credit.................................................... 95
42
Special tax treatment..................................................................... 97
43
Avoidance of double taxation............................................................ 97
TABLE OF CONTENTS
TRANSFER PRICING................................................................................ 98
44
Transfer pricing............................................................................. 98
44.1 Procedure from record keeping to submission of return...................... 98

44.2 Assessment procedure.............................................................. 99
44.3 Computation of arms length price............................................... 99
44.4 Reference to Transfer Pricing Officer...........................................101
44.5 Maintenance and keeping of information, documents and records........101
44.6 Statement of international transaction to be submitted....................101
44.7 Report from an accountant to be furnished...................................101
OFFENCES, PENALTIES & PUNISHMENTS......................................................102
45
Offences, penalties & punishments....................................................102
SUMMARY OF VALUE ADDED TAX................................................................105

46
Taxes imposed under VAT Act, 1991....................................................107
47
Goods and services chargeable to VAT.................................................107
48
Persons responsible to pay the VAT.....................................................108
49
VAT deduction at source..................................................................108
50
Deposit of deducted VAT.................................................................108
51
Scope of VAT and specified rates........................................................109
SUMMARY OF GIFT TAX..........................................................................115

52
Gift tax.....................................................................................117
53
Exemption from Gift Tax.................................................................117
54
Rates of Gift Tax...........................................................................118
55
Return of Gift Tax.........................................................................118
MAJOR CHANGES IN
2015 - 2016
MAJOR CHANGES IN
2015 - 2016
Bangladesh Tax Handbook 2015-2016
1. Major changes in income tax

1.01 Income exemption limit [Finance Act, 2015]

The ceiling of maximum tax exempted income for the individual assessee
has been enhanced from BDT 220,000 to BDT 250,000 for male, from BDT
275,000 to BDT 300,000 for women and senior citizens aging over 65 years,
from BDT 350,000 to BDT 375,000 for physically challenged people and from
BDT 400,000 to BDT 425,000 for gazetted war-wounded freedom fighters.
These changes will be in effect from 1 July 2015.
1.02 Personal tax rate structure [Finance Act, 2015]

The 6 tier income slabs and tax rate structure applicable for individual
assessee (including non-resident Bangladeshi), Hindu undivided family,
firm, association of persons, artificial juridical person and Non-Government
Organization (NGO) have been changed with effect in the Income Year
2014-2015 and Assessment Year 2015-2016. A comparative personal tax rate
structure is shown below
Assessment Year: 2015-2016
(Income Year: 2014-2015)
Income

Rate of Income
tax
On the first BDT 250,000
Nil
of total income of male
of total income of male
assesse
assesse
Nil
of total income of female
of total income of female
assesse
assesse
Nil
of total income of persons
of total income of persons
aged 65 years & above
aged 65 years & above
Nil
On the first BDT 350,000 of
total income of physically
of total income of physically challenged assessee
challenged assessee
Nil
of total income for
of total income for gazettgazetted war wounded
ed war wounded freedom
freedom fighters
fighters
On the next BDT 400,000
10%
On the next BDT 300,000 of
of total income
total income
Rate of
tax
Nil
Nil
Nil
Nil
Nil
10%

of total income
of total income
On the next BDT
3,000,000 of total income
On the balance of total
income
Non-resident foreigner
assessee
15%
20%
25%
30%
30%

total income
total income
On the next BDT 3,000,000
of total income
On the balance of total
income
Non-resident foreigner
assessee
15%
20%
25%
30%
30%
1.03 Minimum tax [Finance Act, 2015]

Minimum tax liability for the individual assessee (including non-resident

Bangladeshi), Hindu undivided family, firm, association of persons, artificial
juridical person and Non-Government Organization (NGO) has been changed
in the following manner
Location of assessee
Assessment Year
2015-2016
Assessment Year
2014-2015
Assessees residing in Dhaka and

Chittagong City Corporation area
BDT 5,000
BDT 3,000
Assessees residing in other City

Corporation area
BDT 4,000
N/A
Assessees residing in other than City

Corporation area
BDT 3,000
N/A
Assessees residing in Paurashavas at

district town
N/A
BDT 2,000
Assessees residing in areas other

than those mentioned above
N/A
BDT 1,000
1.04 Surcharge on individual assessee [Finance Act, 2015]

The following table shows a comparative analysis of the surcharge applicable

on individual assessee based on his/her net wealth in Assessment Year 20152016 and 2014-2015 -
Assessment Year 2015-2016

Rate of
Net worth value
surcharge
Up to BDT 2.25 crore
Nil
More than BDT 2.25 crore
10%
up to BDT 10 crore
More than BDT 10 crore up
15%
to BDT 20 crore
More than BDT 20 crore up
20%
to BDT 30 crore
More than BDT 30 crore
25%

Assessment Year 2014-2015

Rate of
Net worth value
surcharge
Up to BDT 2 crore
Nil
10%
up to BDT 10 crore
15%
up to BDT 20 crore
20%
up to BDT 30 crore
25%
Minimum surcharge has been fixed at BDT 3,000 for the Assessment Year 20152016 in case of net wealth exceeding BDT 2.25 crore, whereas there was no
minimum limit of surcharge for the Assessment Year 2014-2015.
1.05 Corporate tax rate

Tax rates applicable for certain companies have been changed as follows
Assessment Year Assessment Year
2015-2016
2014-2015
Rate of tax
Rate of tax
Sl.
Applicable for
1.
Non-publicly traded company
35%
35%
2.
Publicly traded company

except for banks, insurance
company, other financial
institutions, merchant bank,
cigarette manufacturing
companies and mobile
operator companies
If such company transfers at
least 20% share through IPO,
it will enjoy 10% rebate on tax
in the respective year
25%
27.5%
3.
Bank, insurance company and

financial institution
40%
42.5%
42.5%
42.5%
40%
42.5%
- Publicly traded
- Non-publicly traded
- Bank, insurance company
and financial institution
obtaining approval from
Government in 2013
Sl.
Applicable for
4.
Merchant bank
5.
Cigarette manufacturing
company
Publicly traded
Other
37.5%
37.5%
45%
45%
40%
45%
6.
Mobile phone operator

company
45%
45%
7.
Mobile phone operator

company converted into
public limited company in the
following manner Issuing minimum 10% of
shares through IPO, of
which maximum 5% issued
through Pre-IPO
If such company transfers at
least 20% share through IPO,
it will enjoy 10% rebate on tax
in the respective year
40%
40%
8.
Income from dividend
20%
20%
9.
Cigarette manufacturing
entity other than company
45%
15%
10. Co-operative society

registered under the Cooperative Society Act, 2001
Assessment Year Assessment Year

2015-2016
2014-2015
Rate of tax
Rate of tax
10 % tax rebate offered to publicly traded companies declaring at least 30%

cash dividend has been withdrawn. The provision of 35% tax rate applicable
for publicly traded companies declaring less than 10% dividend or not paying
dividend within the specified time (60 days) has also been withdrawn.
1.06 Income year [Section 2(35)]

Section 2(35) regarding the definition of income year has been replaced. As
per the replaced definition the income year has been determined as follows XX For a newly set up business: From the date of setting up the business to
following 30 June
XX For a new source of income: From the date of existence to following 30 June
XX
For a discontinued business, dissolute unincorporated body,

liquidated company: From 1 July to the date of such discontinuation
or dissolution or liquidation
XX
For an unincorporated body:

-- In case of retirement or death of a partner, income year would be
from 1 July to the date of retirement or death
-- If another Partner retires or dies before 30 June, income year would
be from the date of previous Partners retirement or death to the
subsequent Partners date of retirement or death.
XX
Bank, insurance or financial institution: From 1 January to 31 December
XX
Other cases: From 1 July to 30 June
The replaced definition would be effective from assessment year 2016 2017.
As a result of this replaced definition, all assessees (except banks, insurance

and financial institutions) following a different date than 30 June as end of
income year / accounting year have to shift such income year as 1 July to
30 June. Similarly all banks, insurance and financial institutions following a
different date than 31 December as end of income year / accounting year has
to shift such income year as 1 January to 31 December.
The impact of change in definition of income year is on a company (not a

bank, insurance or financial institution) is shown below
For a company
following
January
December
accounting year /
income year
For a company
following
April March
accounting year /
income year
For a company
following
September
August
accounting year /
income year
As per previous definition
As per replaced definition
Accounting Assessment Last

period /
year
date for
Income year
submission
of return
1 Jan, 2015
2016 - 2017 15 Jul, 2016
31 Dec, 2015
1 Jan, 2016
2017 2018 15 Jul, 2017
31 Dec, 2016
1 Jan, 2017
2018 2019 15 Jul, 2018
31 Dec, 2017
1 Apr, 2015
2016 - 2017 30 Sep, 2016
31 Mar, 2016
1 Apr, 2016
2017 2018 30 Sep, 2017
31 Mar, 2017
1 Apr, 2017
2018 2019 30 Sep, 2018
31 Mar, 2018
1 Sep, 2015
2017 2018 15 Jul, 2017
31 Aug, 2016
1 Sep, 2016
2018 2019 15 Jul, 2018
31 Aug, 2017
1 Sep, 2017
2019 2020 15 Jul, 2019
31 Aug, 2018
Accounting Assessment Last date for

period /
year
submission of
Income year
return
1 Jan, 2015
31 Dec, 2015
1 Jan, 2016
30 Jun, 2016
1 Jul, 2016
30 Jun, 2017
1 Apr, 2015
31 Mar, 2016
1 Apr, 2016
30 Jun, 2016
1 Jul, 2016
30 Jun, 2017
1 Sep, 2015
30 Jun, 2016
1 Jul, 2016
30 Jun, 2017
1 Jul, 2017
30 Jun, 2018
2016 - 2017 15 Jul, 2016

2016 - 2017 31 Dec, 2016
2017 2018 31 Dec, 2017
2016 - 2017 30 Sep, 2016
2016 2017 31 Dec, 2016
2017 2018 31 Dec, 2017
2016 2017 31 Dec, 2016
2017 2018 31 Dec, 2017
2018 2019 31 Dec, 2018
So such an assessee will have to file 2 separate account statements and income
tax returns on assessment year 2016 2017 and there will be 2 separate
assessments for them.
Similarly an assessee (except for company) following a different date than 30

June as end of income year / accounting year has to file 2 separate calculation
statements and income tax returns on assessment year 2016 2017 leading to
2 separate assessments.
1.07 Charge of additional tax [Section 16B]

Section 16B regarding charge of additional tax has been replaced. As per the
replaced section
XX
A public limited company, except for a banking or insurance company,

which has not issued, declared or distributed dividend or bonus
share equivalent to at least 15 % of paid up capital within six months
following the income year, shall be charged additional tax at 5 % on
the undistributed profit.
XX
Additional tax equivalent to the higher (a) 50% of tax liability or (b) BDT
500,000 shall be charged, if an employer employs a non-Bangladeshi
citizen / expatriate during the income year without prior approval of
the Board of Investment or any competent authority.
1.08 Charge of minimum tax for industries engaged in manufacturing of goods

[Section 16CCC]

Minimum tax at 0.10% on gross receipts has been imposed on new industrial
undertakings engaged in manufacturing of goods for first 3 income years since
commencement of commercial production.
1.09 Un-explained investments, etc., deemed to be income [Section 19]

3 new paragraphs have been added in Section 19 which are Section 19(29),
19(30), 19(31). A summary of the added paragraphs is given below
XX
Section - 19(29): Any unpaid liability of an assessee (except for

assessee engaged in real estate business) in respect of credit purchase
of any construction material for building or house property, which is
not paid within the following year of purchase has been included as
deemed income under income from other sources.
XX
Section - 19(30): Unspent portion of an amount of deduction allowed

to an assessee for repair and maintenance of house property has been
included as deemed income under income from other sources.
XX
Section 19(31): In case of a revised return filed under Section 78 &

93 showing income subject to exemption or reduced rate, the amount
by which such income shown in revised return exceeds the income
shown in original return has been included as deemed income under
income from other sources.
1.10 Special tax treatment in respect of investment in residential building and

apartment [Section - 19BBBBB]

The applicable tax rate for investment in residential building and apartment
in certain areas for special tax treatment under Section - 19BBBBB has been
changed as follows
Areas of
residential
building or
apartment
Paurasabha or
any district
headquarter
Area other
than the areas
specified in
19BBBBB(a)(d)
Amount tax
(per sq. meter)
Assessment year
2015 - 2016
Plinth area up to
200 s.m: BDT 600
Plinth area
exceeding 200
s.m: BDT 800
Amount tax
(per sq. meter)
Assessment year
2014 - 2015
Plinth area up
to 200 s.m: BDT
1000
Reference
Section 19BBBBB(d)
Plinth area
exceeding 200
s.m: BDT 1500
Plinth area up to
200 s.m: BDT 400
Plinth area up to
200 s.m: BDT 700
Plinth area
exceeding 200
s.m: BDT 600
Plinth area
exceeding 200
s.m: BDT 1000
Section 19BBBBB(e)
1.11 Voluntary disclosure of income [Section 19E]

Through insertion of Section 19E(3)(e), the following incomes have been

scoped out from being eligible for voluntary disclosure
XX
Income exempted from tax in the concerned income year
XX
Income chargeable to reduced rate of tax under Section 44
1.12 Allowable limit of perquisite [Section 30 (e)]

The limit of perquisite paid to an employee which is allowable as deduction

from income from business and profession has been extended to BDT 450,000
from BDT 350,000.
1.13 Set off losses [Section 37]

Through insertion of a proviso, any loss in respect of any income from any head has
been barred from being set off against any income from manufacturing of cigarette.
1.14 Exemption of tax from newly established industrial undertaking

[Section 46B]
XX
Automobile manufacturing industry, bi-cycle manufacturing industry,

industry engaged in production of brick using automatic Tunnel Kiln
technology and tyre manufacturing industry have been included within
the scope of industrial undertaking eligible for enjoying tax holiday.
XX
A provision has been added stating that employing any non-Bangladeshi

citizen / expatriate without prior approval of Board of Investment or any
competent authority will lead to withdrawal of tax exemption facility.
1.15 Exemption of income of co-operative societies [Section 47]

The following income of a co-operative society have been scoped out from
the benefit of tax exemption
XX
Income of dealings with members involving sale of goods, lending of

money or lease of buildings and land which is for personal use of such
members, or where such member is a firm or association of persons,
for the personal use of the partners or members
XX
Income from interest and dividends derived from its investments with
any other co-operative society
1.16 Deduction at source from salaries [Section 50]

A provision has been added specifically scoping in the salary of Government officials
within the applicability of deduction of tax at source. Tax at source on salary drawn
from Government has been imposed at the average rate applicable to the estimated
total income of the official. The Government Accounts Office shall issue a tax
deduction certificate in this regard within 31 July of following financial year.
1.17 Deduction at source from interest on securities [Section 51]

Treasury bond and treasury bill issued by Government has been scoped out
from the requirement of tax deduction at source.
1.18 Deduction from the payment of certain services [Section 52AA]

Section 52AA has been replaced with a more elaboration of the deduction
rate for certain services, as given below
10
Sl. Description of payment

1
2
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
Catering service
Cleaning service
a) commission
b) gross receipt
Collection and recovery agency
a) commission
b) gross receipt
Contract or toll manufacturing
Credit rating agency
Event management
a) commission
b) gross receipt
Indenting commission
Meeting or training fees or honorarium
Mobile network operator, technical support service
provider or service delivery agents engaged in
mobile banking operations
Motor garage or workshop
Printing service
Private container port or dockyard service
Private security service provider
a) commission
b) gross receipt
Product processing charge
Shipping agency commission
Stevedoring / berth operation commission
Supply of manpower
a) commission
b) gross receipt
Transport provider
Any other service which is not mentioned in Chapter
VII and is not a service provided by any bank,
insurance or financial institutions
Rate of
deduction
10%
10%
1.5%
10%
1.5%
10%
10%
10%
1.5%
7.5%
10%
10%
5%
3%
5%
10%
1.5%
10%
5%
10%
10%
1.5%
3%
10%
1.19 Collection of tax from cigarette manufacturers [Section - 52B]

Any person responsible for collecting VAT from cigarette manufacturers has
been made responsible to collect tax 3% of Maximum Retail Price (MRP) while
collecting VAT.
11
1.20 Deduction at source from interest on savings instrument [Section 52D]

Interest or profit arising from wage earners development bond, US Dollar

premium bond, US Dollar investment bond, Euro premium bond, Euro
investment bond, Pound sterling investment bond and Pound sterling premium
bond has been relieved from deduction of tax at source.
1.21 Collection of tax from travel agent [Section 52JJ]

A new section has been inserted imposing 0.30% tax to be deducted at source
by respective airlines from total value of tickets (exclusive of charges/taxes)
of an airlines or any charge for carrying cargo to be paid to any travel agent.
1.22 Collection of tax from manufacturer of soft drink [Section 52S]

The rate of tax to be deducted at source has been changed to 4% from 3%.
1.23 Deduction of tax from commission or remuneration paid to agent of foreign

buyer [Section 53EE]

The rate of tax to be deducted at source has been changed to 10% from 7.5%.
1.24 Deduction at source from interest on saving deposits and fixed deposits,
etc. [Section 53F]

10% tax to be deducted at source has been imposed on interest or share of

profit to be received by a public university, an educational institution (subject
to certain conditions) and professional institutes such as ICAB, ICMAB and
ICSB.
1.25 Deduction of tax from advertising bill of newspaper or magazine or private

television channel or private radio station etc. [Section 53K]

The rate of tax to be deducted at source has been changed to 4% from 3%.
1.26 Deduction of tax from any sum paid by real estate developer to land owner
[Section 53P]

A new section has been inserted imposing 15% tax to be deducted at source
on any amount paid in the name of signing money, subsistence money, house
rent etc. to land owner by any real estate or land development business.
1.27 Deduction of tax from dividend [Section - 54]

Section - 54 has been replaced and tax to be deducted at source on dividend

has been imposed as follows -
12
XX
If the shareholder is a company, at the rate applicable to a company
XX
If the shareholder is a person other than a company, 10% if TIN is

furnished and 15% if TIN is not furnished
1.28 Deduction from income of non-residents [Section - 56]

Section 56 has been replaced with a more elaboration of the deduction rate
for certain income of non-residents, as given below
Sl.
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
Description of payment
Accounting or tax consultancy
Advertisement making
Advertisement broadcasting
Advisory or consultancy service
Air transport or water transport
Architecture, interior design or landscape design
Artist, singer or player
Capital gain received a) from capital assets (not being securities listed
with stock exchange)
b) by a company or firm if such gain arises from
securities listed with any stock exchange in
Bangladesh which is not exempted from tax in
the country of such non-resident
Certification
Charge or rent for satellite, airtime or frequency
Contractor, sub-contractor or supplier
Courier service
Dividend
a) company
b) any other person, not being a company
Insurance premium
Interest, royalty or commission
Legal service
Machinery rent
Management or event management
Pre-shipment inspection service
Professional service
Salary or remuneration
Exploration or drilling in petroleum operation
Rate of deduction
20%
15%
20%
30%
7.5%
20%
30%
15%
10%
30%
20%
5%
15%
20%
30%
10%
20%
20%
15%
20%
30%
20%
30%
5.25%
13
Sl. Description of payment

23 Survey for oil and gas exploration
24 Any service for making connectivity between oil or
gas field and its export point
25 Any other payments
Rate of deduction
5.25%
5.25%
30%
1.29 Return of income [Section 75]

Change in Section 75 had been made allowing the DCT the power to
extend the date for submission of return up to 2 months (previously it was
3 months) from the specified date. He may further extend the date up to 2
months (previously it was 3 months) with the approval of the Inspecting Joint
Commissioner.
1.30 Universal self-assessment [Section 82BB]

Sub section 82BB(1) has been replaced, The replacement states that
XX
Where an assessee furnishes a return of income (manually or

electronically) fulfilling certain conditions, and pays tax on the
basis of such return, the DCT or other authorized official shall issue
an acknowledgement. Such acknowledgement will be deemed as
assessment order.
XX
After processing the return, the DCT shall send the assessee a demand
notice along with an intimation specifying computed income, tax
liability, tax credit allowed, net tax payable or refundable and other
particulars, within 30 days of computation. Provided that no such
intimation shall be sent after 12 months from the end of the financial
year in which the return is furnished.
No demand notice requiring the assessee to pay more tax will be made unless
he/she has been given an opportunity of being heard.
1.31 Tax deducted or collected at source from the following items has been included
in this section to be treated as final discharge of tax liability [Section 82C]
XX
Collection of tax from selling banderols to any manufacturer of

cigarette at the rate of 10% under section 52B [Section - 82C(2)(d)]
XX
Deduction of tax from interest on savings instruments at the rate of 5%

under Section 52D [Section - 82C(2)(eee)]
XX
Collection of tax from travel agent at the rate of 0.3% under Section 52JJ [Section - 82C(2)(eeee)]
14
XX
Collection of tax from export of any goods except certain items at the
rate of 0.60% under Section - 53BBBB [Section - 82C(2)(kk)]
XX
Deduction of tax from commission or remuneration paid to an agent

of a foreign buyer at the rate of 10% under Section - 53EE [Section 82C(2)(mmm)]
XX
Deduction of tax at the rate of 10% on interest or share of profit

received by a public university, an educational institution (subject to
certain conditions) and professional institutes such as ICAB, ICMAB and
ICSB under Section 53F(1)(c) [Section - 82C(2)(mmmm)]
Deduction of tax from gains of securities traded in the stock exchange under
Section - 53O has been withdrawn as final discharge of tax liability.
1.32 Report from an accountant to be furnished [Section 107F]

Section 107F has been replaced. The replaced section allows the DCT to
require any person entering into international transaction(s) with aggregate
value exceeding BDT 3 crore to furnish a report from a Chartered Accountant
or Cost and Management Accountant by issuing a notice.
1.33 Penalty for failure to submit the staement of international transaction

Section - 107EE [Section - 107HH]

A new section has been inserted imposing penalty (upto 2% of the value of the
international transaction) on a person failing to comply with the provision of
Section - 107EE.
1.34 Penalty for failure to file return, etc. [Section - 124]

A maximum limit has been set on the amount of penalty to be imposed on

individual assessee for failure to file return. The maximum limit has been set
as follows
XX
BDT 5,000 for individual assessee not assessed previously
XX
Higher of (a) 50% of the tax liability on the last assessed income or (b)
BDT 1,000 for individual assessee assessed previously
1.35 Penalty for failure to verify the Taxpayers Identification Number [Section
- 124AA]

A new section has been inserted imposing penalty on a person failing to

verify the authenticity of twelve-digit Taxpayers Identification Number in
accordance with Section 184A of an amount upto BDT 50,000.
15
1.36 Penalty for furnishing fake audit report [Section - 129B]

A new section has been inserted imposing penalty on a person furnishing a

false audit report or an audit report not signed by a Chartered Accountant of
an amount of BDT 100,000.
1.37 Appeal against order of Deputy Commissioner of Taxes and Inspecting

Joint Commissioner of Taxes [Section - 153]

Section 153(e) has been replaced. The replaced clause scoped in the
imposition of penalty on assessee except for a company under Chapter XIA,
Chapter XV, Section 137 of Chapter XVI to the provisions eligible for
appealing to the Appellate Joint Commissioner under this section.
1.38 Punishment for furnishing fake audit report [Section - 165AA]

A new section has been included imposing punishment on a person furnishing

a false audit report or an audit report not signed by a Chartered Accountant
with imprisonment of 3 months 3 years or fine upto BDT 100,000 or both.
1.39 Punishment for unauthorized employment [Section - 165C]

A new section has been inserted imposing punishment on a person employing

non Bangladeshi citizen without prior approval of Board of Investment or any
competent authority with imprisonment of 3 months to 3 years or fine upto
BDT 500,000 or both.
1.40 Requirement of certificate or acknowledgement receipt containing TIN

[Section - 184A]

A provision has been added making submission of twelve digit TIN a requirement
for parents applying for admission of their children at any English medium
school following international curriculum and situated in any city corporation
or paurashabha of a district headquarter.
The following cases have been relieved from the requirement of submission
of twelve digit TIN
XX
For obtaining ISD connection to any kind of telephone
XX
For non-resident foreigner while becoming a director or sponsor

shareholder of a company
1.41 Third Schedule

XX
A new provision has been included allowing imported computer
16
software a normal depreciation allowance of 10%.

XX
For the purpose of calculation of written down value, the limit of

allowable acquisition cost of motor vehicles used for business or
profession has been increased to BDT 25 lakh from BDT 20 lakh.
1.42 Sixth Schedule - Part A: Exclusions from total income

The changes in Sixth Schedule, Part A have been summarized below:

XX
The exemption limit of income from dividend received from a listed

company has been increased to BDT 25,000 from BDT 20,000 [Para
11A]
XX
Para 20 has been replaced imposing a limit of BDT 2 crore 50 lakh on

income received as gratuity being eligible for exemption. Earlier any
amount received as gratuity was exempted from tax [Para 20]
XX
Para 21(d) has been replaced making only workers as defined in

Section - 2(65) of Bangladesh Labor Act, 2006 eligible for exemption
for any payment received from workers participation fund [Para
21(d)]
XX
A new provision has been inserted making any income received from
Wage earners development bond, US dollar premium bond, US dollar
investment bond, Euro premium bond, Euro investment bond, Pound
sterling investment bond or Pound sterling premium bond exempted
from tax [Para 24A]
XX
The exemption period for any income derived from the business of
software development, Nationwide Telecommunication Transmission
Network (NTTN) or Information Technology Enabled Services (ITES) has
been extended till 30 June, 2024 [Para 33]
XX
The exemption period for any income derived from export of

handicrafts has been extended till 30 June, 2019 [Para 35]
XX
A new provision has been included making any income (except for
interest or dividend income) classifiable under the head income from
other sources which is received by any education institution exempted
from tax provided that such institution
-- is enlisted for Monthly Pay Order (MPO) of the Government
-- follows the curriculum approved by the Government
-- is governed by a body formed as per Government rules or

regulations [Para 52]
XX
A new provision has been included making any income (except for
interest or dividend income) classifiable under the head income from
17
other sources which is received by any public university, ICAB, ICMAB

and ICSB exempted from tax [Para 53]
CHANGES REGARDING INCOME TAX RULES, 1984
[SRO 192-AIN/TAX/2015 DATED 30 JUNE 2015]
1.43 Deduction of tax from payment to contractors etc. [Rule 16]

A new provision has been included imposing tax to be deducted at source at

3% on gas bill of a company engaged in gas distribution.
1.44 Collection of tax from importers [Rule - 17A]

This rule has been replaced. As per the replaced rule tax shall be collected
on imported goods by the Commissioner of Customs or any appropriate officer
under Section 53 at the following rates XX
5% on the value of the imported goods excluding the goods mentioned in

Rule 17 (b) & (c)
XX
2% on the value of the imported goods specified in Rule 17 (b)
XX
BDT 800 per ton in case of imported goods specified in Rule 17 (c)
1.45 Issuance of certificate to the person from whom tax has been deducted
[Rule 18]

Certificate on deduction of tax needs to be issued within 2 weeks of the

following month in which deduction was made. Previouosly it was within 15
days from deduction.
1.46 Certificate of deduction of tax from Goverment under section-50(1B) [Rule18A]

A new rule has been inserted providing the form of annual certificate regarding
deduction of tax from the Goverment Officials under Section 50(1B) to be
issued.
1.47 Return of withholding tax [Rule - 24A]

This rule has been replaced. The format of return of withholding tax to be
filed by a company under Section - 75A has been modified accommodating the
new and changed areas of tax deducted at source.
1.48 House rent allowance receivable in cash [Rule - 33A]

The exemption limit for house rent allowance receivable by an employee
18
in cash has been increased to BDT 25,000 per month from BDT 20,000 per
month. So now the allowed exemption limit is lower of (a) BDT 25,000 per
month or (b) 50% of basic salary.
1.49 Conveyance provided for personal or private use [Rule - 33D]

A new condition has been included regarding conveyance provided to an

employee partly or exclusively for personal or private use. In such cases,
higher of (a) BDT 60,000 per annum or (b) 5% of basic salary shall be added to
his/her income.
1.50 Medical expenses [Rule - 33I]

The exemption limit of medical expense or allowance has been increased

to BDT 120,000 per annum from BDT 60,000 per annum. So now the allowed
exemption limit is lower of (a) BDT 120,000 per annum or (b) 10% of basic
salary.
1.51 Recognition of association of accountants, registration of income tax

practitioners etc. by the Board [Rule 37]

Rule 37(1) has been replaced. The replaced clause has specified only the
following bodies to be recognized by the Board as association of accountants
for the purpose of Section - 174(2)(e)
XX
Institute of Chartered Accountants of Bangladesh
XX
Institute of Cost and Management Accountants of Bangladesh
As a result the following institutions have been excluded from association of

accountants
XX
Institute of Chartered Accountants in England and Wales
XX
Institute of Chartered Accountants in Scotland
XX
The Society of Incorporated Accountants and Auditors, London
XX
Institute of Chartered Accountants of Pakistan and India
XX
Institute of Cost and Management Accountants of Pakistan
1.52 Form of certificate under Section 53AA [Rule - 62A]

A new rule has been inserted providing the form of certificate to be issued by
the Deputy Commissioner of Taxes regarding collection of tax from shipping
19
business of a resident under Section 53AA.

1.53 Report from a certified accountant to be furnished under Section - 107F
[Rule 74]

This rule has been deleted
1.54 Form of report to be furnished under Section - 107F [Rule 75]

This rule has been replaced. The replaced rule has modified the form of
report from a Certified Accountant to be furnished under Section - 107F.
CHANGES INTRODUCED BY SRO

1.55 Extension of time period for reduced rate of tax for textile industry [SRO
193 - AIN/IT/2015]

The time period for which a company engaged in textile industry (yarn
manufacturing, yarn dying, finishing, coning, fabric manufacturing, fabric
dying, finishing, printing etc.) enjoys reduced rate of tax at 15% has been
extended till 30 June, 2019.
1.56 Extension of time period for reduced rate of tax for jute industry [SRO
194 - AIN/IT/2015]

The time period for which a jute goods manufacturing industry enjoys reduced
rate of tax at 15% has been extended till 30 June, 2019.
1.57 Tax holiday for Securities and Exchange Commission [SRO 195 - AIN/
IT/2015]

Tax holiday has been offered to Bangladesh Securities Exchange Commission

for a period of 5 years at the following rates Tax Exemption Period
1st Year
Tax Exemption Rate

100%
2nd Year
80%
3rd Year
60%
4th Year
40%
5th Year
20%
1.58 Tax on salary of Government officials [SRO 198 - AIN/IT/2015]

Basic salary, festival bonus and bonus of Government officials has been
20
brought within the scope of tax. Any other allowances and benefits received
by such officials would remain tax exempted.
1.59 Reduction of tax rate on income from certain areas [SRO 199 - AIN/
IT/2015]

Reduced rate of tax has been offered for income from production of pelleted
poultry feed, production of pelleted feed for fish, shrimp and cattle,
production of seeds, marketing of locally produced seeds, cattle farming,
dairy farming, frog farming, horticulture, silk tree plantation, bee keeping,
silk worm farming, mushroom farming, floriculture, as stated below
Income
On first BDT 10 lakh
On next BDT 20 lakh
On the balance amount
Tax rate
3%
10%
15%
These reduced rates will be applicable from 1 July 2015.
1.60 Reduction of tax rate on income from poultry [SRO 254 - AIN/IT/2015]

Reduced rate of tax has been offered for income from poultry as stated below
Income
On next BDT 10 lakh
Tax rate
nil
5%
10%
1.61 Reduction of tax rate on income from hatchery [SRO 255 - AIN/IT/2015]

Reduced rate of tax has been offered for income from hatchery as stated
below
Income
Tax rate
nil
On next BDT 10 lakh
5%
10%
21
2. Major changes in Value Added Tax (VAT)

2.1
Restriction on the participation in tender without having registration

[Section - 19A]
Persons not having turnover tax enlistment have been scoped in this section.
As a result any person not having either VAT registration or turnover tax
enlistment would not be able to participate in any tender. Moreover no work
order shall be passed in favor of such person.
2.2
Empowerment of Assistant Director [Section 24, 26, 27, 48]
Assistant Director has been empowered, equally as Assistant Commissioner,

for the following purposes
XX
To ask for supply of information from the persons mentioned in Section

- 24(1) [Section 24]
XX
Right to enter place and premises of production, rendering of service

and trading; right to inspect stock of goods, services and input; right
to examine accounts and records [Section 26]
XX
Power to seizure of confiscable goods [Section 27]
XX
Power to search [Section 48]
2.3
Offences and penalties [Section - 37]
Penalty has been imposed on any registered person receiving any goods or
services without VAT Challan.
The time limit for a person to include purchase information in the purchased
register has been extended from 24 hours to 48 hours. Exceeding this time
limit would subject the person to penalty.
2.4
Deduction of VAT at source by service receiver [Rule 18A]
In addition to the existing deducting authorities, any enterprise having annual

turnover of more than BDT 1 crore has been made responsible as a deducting
authority of VAT at source.
2.5
Imposition of VAT
VAT has been imposed on the following casesXX
VAT at 7.5% has been introduced on service revenue of private university

and medical and engineering college [SRO No 221 - Ain/2015/740 Mushak dated 01 July, 2015]
XX
VAT to be deducted at source from procurement provider has been changed

from 4% to 5% [General order no. - 12/Mushok/2015, dated 1 July 2015]
2.6
Exemption from VAT
[SRO 119 Ain/2015/725 Mushak] has listed the goods and services which
has been exempted from VAT.
22
SUMMARY
SUMMARY OF INCOME TAX
OF INCOME TAX
23
24
3. Important definitions

Assessee [Section - 2(7)]: Assessee means a person by whom any tax or other sum
of money is payable under ITO, 1984.
Person [Section - 2(46)]: Person includes an individual, a firm, an association of

persons (AOP), a Hindu undivided family (HUF), a local authority, a company and
every other artificial juridical person.
Income [Section - 2(34)]: Income means any income, profits or gains derived from
whatsoever source; any loss of such income, profits or gains; deemed income; income
accruing or arising or received or deemed to accrue or arise or to be received under
any provision of ITO, 1984.
Income Year [Section - 2(35)]: Income year means

XX
For a newly set up business: From the date of setting up the business to
following 30 June
XX
For a new source of income: From the date of existence to following 30 June
XX
For a discontinued business, dissolute unincorporated body, liquidated

company: From 1 July to the date of such discontinuation or dissolution or
liquidation
XX
For an unincorporated body:

-- In case of retirement or death of a Partner, income year would be from 1
July to the date of retirement or death
-- If another Partner retires or dies before 30 June, income year would be
from the date of previous Partners retirement or death to the subsequent
Partners date of retirement or death.
XX
Bank, insurance or financial institution: From 1 January to 31 December
XX
Other cases: From 1 July to 30 June
Assessment Year [Section - 2(9)]: Assessment year means the period of twelve
months commencing on the 1 July every year. This is the financial year immediately
following the income year.
From 1 July, 2016 the income year for all assessees (except for bank, insurance and
financial institutions) would be 1 July to 30 June and the assessment year would be
following July June. From 1 July, 2016 the income year for all banks, insurance and
financial institutions would be 1 January to 31 December and the assessment year
would be following July June.
Tax [Section - 2(62)]: Tax means the income tax payable under the ITO, 1984 and
includes any additional tax, excess profit tax, penalty, interest, fee or other charge
leviable or payable under the Ordinance.
25
Income
4. Residential status
[Section 2(55)]
Individual An individual will be a resident in any income year if he fulfills any of the
following two conditions
XX
If he stays in Bangladesh for a period of, or for a period amounting in all to, one
hundred and eighty two (182) days or more in that year or
XX
For a period of, or periods amounting in all to, ninety (90) days or more in that
year having previously been in Bangladesh for a period of, or periods amounting in
all to, three hundred and sixty five(365) days or more during four years preceding
that year.
Hindu Undivided Family, Firm, Other Association of Persons Such persons will
be resident if its control and management of affairs is situated wholly or partly in
Bangladesh in the income year.
Company - A company will be resident if the management of its affairs is situated

wholly in Bangladesh in the income year.
5. Scope of the total income

[Section 17]

The calculation of total income of a person for an income year depends on the
residential status.

Resident assessee
Non-resident assessee
Total income = Global income

(income received,
accrued, arising or deemed to be received,
accrued, arising in
Bangladesh + income accrued or arising
outside Bangladesh)
Total income = Bangladeshi income

(income received,
accrued, arising or deemed to be
received, accrued, arising in
Bangladesh)
26
6.
Heads of income
[Section 20]
For the purpose of computation of total income and charge of income tax, all incomes
shall be classified and computed under the following heads of income
a) Salaries
b) Interest on securities
c) Income from house property
d) Agricultural income
e) Income from business or profession
f) Capital gains
g) Income from other sources
7. Income from salary

[Section 2(45), 2(58), 21; Rule 33A to 33J; Sixth Schedule Part - A]
Salary includes the following as per section - 2(58) and 21

Basic Salary
Contribution to PF
Festival Bonus
Pension Fund
Incentive Bonus, allowable upto 10% of

disclosed net profit [Section-30(j)]
Gratuity Fund
Arrear Salary
Superannuation Fund
Advance Salary
Project pay
Leave Encashment
Compensation pay
Leave Fare Assistance
Wages or any other payment
Overtime

Perquisites include the following as per section - 2(45), 30(e) and Rule - 33A-33J:
Any benefits other than the items included under salary shall be considered as
perquisites. Examples of perquisites are:
XX
Dearness allowance
27
XX
House Rent allowed up to BDT 300,000
XX
Conveyance allowance allowed up to BDT 30,000
XX
Medical allowance allowed up to BDT 120,000 or 10% of basic salary whichever is less
XX
Any other allowance
Maximum perquisites allowed for a person is BDT 450,000. Excess of perquisites

(over BDT 450,000) will be taxed as per the respective organizations tax rate.
Based on various provisions of Income Tax Ordinance, 1984 and Rule 33A to Rule 33J
of Income Tax Rules, 1984 the following elements will be included while computing
income from salary
XX
Basic salary
XX
Dearness allowance
XX
Overtime
XX
Bonus
XX
House rent allowance receivable in cash: amount in excess of 50% of basic salary
or BDT 25,000 per month whichever is less [Rule 33A]
XX
Rent free accommodation: rental value of accommodation or 25% of basic salary,

whichever is less [Rule 33B]
XX
Accommodation at a concessional rate: rental value of accommodation or 25% of

basic salary - rent actually paid [Rule 33B]
XX
Conveyance allowance receivable in cash with no conveyance facility: amount in

excess of BDT 30,000 [Rule 33C]
XX
Conveyance provided for personal or private use: 5% of basic salary or BDT

60,000, whichever is higher [Rule 33D]
XX
Additional conveyance allowance along with conveyance facility: 5% of basic

salary or BDT 60,000, whichever is higher + conveyance allowance received [Rule
33E]
XX
Free or concessional passage for travel abroad or within Bangladesh: [Rule 33G]
-- If provided in accordance with terms of employment: amount in excess of
actual expenditure
-- If not provided in accordance with terms of employment: entire amount
-- If travel abroad is availed more than once in two years: the entire amount
XX
Entertainment allowance: entire amount (nothing to be added for free tea,

coffee, beverages) [Rule 33H]
XX
Medical allowance: amount in excess of 10% of basic salary or BDT 120,000

annually, whichever is less [Rule 33I]
28
XX
Other benefits (such as servant allowance, children education allowance, utility

bills): entire amount
XX
Fees and commission
XX
Accrued salary
XX
Advance salary
XX
Leave encashment
XX
Profit in lieu of salary

-- Compensation for termination or modification of terms of employment
-- Employers contribution to recognized provident fund
-- Interest on recognized provident fund: amount in excess of 1/3 of basic salary
or at 14.5% rate whichever is lower (6th Schedule, Part A, Para 25)
-- Unrecognized provident fund: accumulated employers contribution + interest
(at the time of retirement)
XX
Gratuity: amount in excess of BDT 2 crore 50 lakh (6th Schedule, Part A, Para 20)
8. Interest on securities
[Section 22, 23]
The following income are classifiable under the head interest on securities
XX
Interest receivable on any Government security or any Government approved

security
XX
Interest receivable on debenture or other securities of money issued by or on

behalf of a local authority or company
The following deductions are permissible in determination of income from interest

on securities
XX
Commission or charges deducted from interest by a bank realizing the interest

on behalf of the assessee
XX
Interest payable on money borrowed for the purpose of investment in the

securities
XX
Provided that allowance or deduction on account of interest or commission

in respect of or allocable to the tax-free Government securities shall not be
allowed. Deduction will also not be allowed in respect of interest payable
outside Bangladesh on which tax at source has not been paid or deducted.
29
9. Income from house property

[Section 2(3), 24, 25; Rule 8A]

House property consists of building, appurtenant land, furniture, fixture, fittings etc.
Income from house property whether used for commercial or residential purposes is
taxable on the basis of its annual value.
Definition of Annual Value [Section 2(3)]: Annual value refers to the higher of (a)
the sum reasonably expected from letting out any house property from year to year
or (b) any sum received as annual rent from such house property.
The following deductions are permissible in determination of income from house

property XX
Land development tax or rent payable to Government
XX
Insurance premium paid
XX
Interest payable on mortgage or capital charge
XX
Annual charge except capital charge
XX
Ground rent
XX
Interest payable to bank or financial institution on borrowed capital for

acquisition, construction, reconstruction, repair or renovation of the house
property
XX
Interest payable to bank or financial institution on borrowed capital for

construction of the house property, charged in 3 equal installments in the first 3
years of earning income from such property
XX
Maintenance allowance
-- House property used for residential purpose: 25% of annual value
XX
-- House property used for commercial purpose: 30% of annual value
(However any unspent portion of an amount of deduction allowed to an assessee

for repair and maintenance of house property would be treated as deemed
income under income from house property)
Proportionate vacancy allowance
Any person receiving any sum or aggregate of sums exceeding BDT 25,000 per month
as rent of any house property is required to maintain a bank account in any scheduled
bank for the purpose of depositing such rent or any advance received or receivable
from such house property. He/she shall also maintain a separate register and record
regarding particulars of the tenant or tenants and the sum or sums received.
30
10. Agricultural income

[Section 2(1), 26, 27]
Definition of Agricultural Income [Section 2(1)]: Agricultural income means XX
ny income derived from any land in Bangladesh and used for agricultural
A
purpose:
-- By means of agriculture
-- By performance of any process ordinarily employed by a cultivator to render

the produce of such land as marketable
-- By sale of the produce of the land raised by the cultivator, in respect of
which no process (other than ones to render the produce of such land as
marketable) has been performed
-- By granting a right to any person to use the land for any period
XX
Any income derived from any building which:
-- Is occupied by the cultivator of any such land as referred above in which any
process to render any such produce as marketable is carried on
-- Is on or in the immediate vicinity of such land
-- Is required by the cultivator as the dwelling house or store-house or other

out-house by reason of his connection with such land

The following income of an assessee is assessable under the head agricultural income
XX
Agricultural income as defined in Section 2(1)
XX
Income from sale of machinery or plant used for agricultural purpose as referred
to in Section - 19(17) [Sale proceed - (orginal cost - written down value)]
XX
Receipt of insurance, salvage or compensation money for machinery or plant used

for agricultural purpose as referred to in Section - 19(19) [Insurance / salvage
/ compensation received ((Original cost Written down value) Scrap value]
XX
60% of income derived from sale of tea grown and manufactured in prescribed
manner [Rule 31]
XX
Income from sale of rubber, tobacco, sugar or any other produce grown and
manufactured in prescribed manner [Rule 32]
However, agricultural income upto BDT 200,000 of an assessee (having agriculture as

only source of income) is exempted from tax.
The following deductions are permissible in determination of agricultural income

XX
Land development tax or rent paid
XX
Tax, local rate or cess paid on the land used for agricultural purposes
31
XX
Expenditure incurred as cost of production in prescribed manner

-- If books of accounts are maintained, actual expenditure
-- If books of accounts are not maintained, 60% of the market value of the
produce of the land
-- Adhi, barga, bhag, no deduction is allowed
XX
Insurance premium paid
XX
Repair and maintenance cost of capital assets
XX
Depreciation allowance on capital assets as per Third Schedule
XX
Interest paid on mortgage and capital charge
XX
Interest on borrowed capital
XX
Amount written off in books of accounts in respect of discarded, demolished or

destroyed machinery or plant, subject to certain conditions
XX
Amount written off in books of accounts in respect of sale or transfer of machinery

or plant, subject to certain conditions
XX
Any other expenditure except for capital or personal expenditure, incurred

wholly and exclusively for agricultural purpose
11. Income from business or profession

[Section 28, 29, 30; Third Schedule]
The following income of an assessee is assessable under the head income from
business or profession
XX
Profits and gains of any business or profession
XX
Income from any trade or professional association or similar association
XX
Value of any benefit or perquisite arising from business or profession
XX
Receipt of any loss, bad debt, expenditure or trading liability as referred to in

Section - 19(15)
XX
Income from sale of building, machinery or plant used for business and profession
as referred to in Section - 19(16) [Sale value (Original cost Written Down
Value)]
XX
Receipt of insurance, salvage or compensation money for building, machinery or

plant used for business and profession as referred to in Section - 19(18) [Insurance
/ salvage / compensation received ((Original cost Written down value) Scrap
value]
XX
Income from sale of capital asset for scientific research as referred to in Section
- 19(20) (Sale value Expenditure allowed as deduction under Section 29(xx))
XX
Proportionate export value of exportable garments against transfer of export
32
quota as referred to in Section - 19(23) [Rule 30A]

11.1 Admissible deductions

The following deductions are permissible as per Section 29 in determination of

income from business or professionXX
Rent for the premises of business or profession [Para - 1(i)]
XX
Repair expense for hired premises of business or profession [Para - 1(ii)]
XX
Interest paid or profit shared with a bank run on Islamic principles in respect of
capital borrowed [Para - 1(iii)]
XX
Distribution of profit received from a bank run on Islamic principles [Para - 1(iv)]
XX
Upto 5% of the total income carried to Special Reserve by financial institutions as

approved by the Government, provided that such reserve does not exceed paid
up capital [Para - 1(v)]
XX
Repair expense for buildings, machinery, plants or furniture [Para - 1(vi)]
XX
Insurance premium [Para - 1(vii)]
XX
Depreciation of building, machinery, plant or furniture as per Third Schedule

[Para - 1(viii)]
XX
Amortization of license fee as per Third Schedule [Para - 1(viiia)]
XX
Investment allowance of 20% of original cost for the first year, for passenger
vessel or fishing trawler entitled to special depreciation allowance [Para - 1(ix);
Third Schedule, Para - 8]
XX
Obsolescence allowance for building, machinery, plant or any other fixed asset
except imported software [Para - 1(xi); Third Schedule, Para 10]
XX
Difference between sale / disposition value of carcass of dead or useless animal

and original cost of the animal which is used in business or profession [Para 1(xii)]
XX
Land development tax or rent, local rates or municipal taxes for premises [Para
- 1(xiii)]
XX
Employee bonus or commission, subject to certain conditions [Para - 1(xiv)]
XX
A written off irrecoverable debt, subject to certain conditions [Para - 1(xv)]
XX
A prior written off irrecoverable debt previously not allowed as deduction, if

established to have become irrecoverable [Para - 1(xvi)]
XX
A written off irrecoverable debt in the assessable income year which is established
by the DCT to have become irrecoverable in a prior year, allowed as deduction
for the relevant prior year by the DCT [Para - 1(xvii)]
XX
Expenditure for scientific research except for capital expenditure [Para - 1(xix)]
XX
Capital expenditure for scientific research, subject to certain condition [Para 1(xx)]
33
XX
Any sum paid to a scientific research institute, association or other body;

university, college, technical school or other institution, subject to certain
condition [Para - 1(xxi)]
XX
Expenditure for educational institution or hospital established for the benefit

of the employees, except for capital expenditure, subject to certain conditions
[Para - 1(xxii)]
XX
Capital expenditure for construction and maintenance of educational institution

or hospital established for the benefit of the employees, subject to certain
conditions [Para - 1(xxiii)]
XX
Training expenditure on Bangladeshi Citizens for Board approved schemes [Para

- 1(xxiv)]
XX
Expenditure except for capital or personal expenditure, incurred as a member of

Government sponsored trade delegation for visits abroad [Para - 1(xxv)]
XX
Annual membership subscription fee paid to a registered trade organization or

professional institution [Para - 1(xxvi)]
XX
Expenditure except for capital or personal expenditure, incurred wholly and

exclusively for the purpose of business and profession [Para - 1(xxvii)]
XX
Expenditure up to BDT 450,000 on the provision of perquisites for any employee.

Perquisite includes dearness allowance, house rent allowance receivable in cash,
rent free accommodation, conveyance allowance receivable in cash, conveyance
provided for personal or private use, additional conveyance allowance, free
concessional passage for travel abroad or within Bangladesh, entertainment
allowance, medical allowance and other benefits [Section 30(e)]
XX
Entertainment expense allowance [Rule - 65]

Income, profits and gains
On the first BDT 10 lakh
On the balance
Rate for allowance

4%
2%
XX
Foreign travel expenditure of employees and their dependents for holidaying

and recreation equivalent to lower of 3 months basic salary or of actual
expenditure, subject to certain conditions [Rule 65A]
XX
Publicity and advertisement expenditure
XX
Allowance for expenditure on distribution of free samples [Rule 65C]
Industry
Turnover
All except
pharmaceuticals
industry
Upto BDT 5 crore

In excess of BDT 5 crore upto BDT 10 crore
In excess of BDT 10 crore
Rate for
allowance
1.5%
0.75%
0.375%
34
Industry
Turnover
Pharmaceuticals
industry
Upto BDT 5 crore

In excess of BDT 5 crore upto BDT 10 crore
In excess of BDT 10 crore
Rate for
allowance
2%
1%
.50%
XX
Head office expense of a company not incorporated in Bangladesh under

Companies Act, 1994 up to 10% of net profit disclosed in the statements of
accounts
XX
Royalty, technical services fee, technical know-how fee, technical assistance fee
upto 8% of net profit disclosed in the statements of accounts
XX
Incentive bonus upto 10% of net profit disclosed in the statements of accounts
XX
Overseas travelling expenditure upto 1% of disclosed turnover
11.2 Deductions not admissible in certain circumstances

The following expenditures are not admissible as deductions in the determination of

income from business or profession
XX
Payment of salaries without deduction of tax at source in accordance with

Section - 50 [Para - 30(a)]
XX
Payment without deduction and deposit of tax at source and VAT [Para - 30(aa)]
XX
Payment of interest, salary, commission or remuneration by a firm or an

association of persons to any partner [Para - 30(b)]
XX
Brokerage or commission paid to a non-resident without deduction of tax at

source in accordance with Section 56 [Para - 30(c)]
XX
Payment to a provident or other fund without effective arrangement of deduction

of tax at source from any payment from such fund [Para - 30(d)]
XX
Perquisite for any employee exceeding BDT 450,000, subject to certain condition
[Para - 30(e)]
XX
Expenditure in excess of allowable limit (stated in the section above) in respect

of the following [Para -30(f)]
a. Entertainment
b. Foreign travels of employees and their dependents for holidaying and
recreation
c. Publicity and advertisement
d. Distribution of free samples
XX
Head office expense of a company not incorporated in Bangladesh under

Companies Act, 1994 in excess of 10% of net profit disclosed in the statements of
35
accounts [Para -30(g)]

XX
Royalty, technical services fee, technical know-how fee, technical assistance fee
in excess of 8% of net profit disclosed in the statements of accounts [Para -30(h)]
XX
Payment of salary or remuneration exceeding BDT 15,000 otherwise than by

crossed cheque or bank transfer [Para -30(i)]
XX
Incentive bonus exceeding 10% of net profit disclosed in the statements of

accounts [Para -30(j]
XX
Overseas travelling expenditure exceeding 1% of disclosed turnover [Para -30(k)]
XX
Payment of commission or discount to shareholder director [Para -30(l)]
XX
Payment exceeding BDT 50,000 otherwise than by crossed cheque or bank

transfer, subject to certain conditions [Para -30(m)]
XX
Payment of rent otherwise than by crossed cheque or bank transfer [Para -30(n)]
11.3 Normal depreciation allowance

[Third Schedule, Para - 3]
In computing profit or gains from business or profession, an allowance for depreciation

shall be made in respect of any building, machinery, plant, furniture, bridge, road or
flyover used for the purpose of such business or profession.
Sl.
Class of asset
Normal depreciation
rate of WDV except as
otherwise indicated
Buildings (General)
10%
Factory buildings
20%
Furniture & fittings
10%
Office equipment
10%
Machinery & plant (General)
20%
Ocean going ships (New)
12%
Ocean going ships (Second hand), age less than 10

years at the time of purchase
12%
Ocean going ships (Second hand), age 10 years or

more at the time of purchase
24%
Inland ships including steamers, motor vessels, iron

or steel flats for cargo, wooden cargo boats, motor
launches and speed boats
24%
36
Sl.
Class of asset
Normal depreciation
rate of WDV except as
otherwise indicated
10
Batteries, X-Ray and electronic therapeutic

apparatus and accessories thereto
20%
11
Machinery used in the production and exhibition of

cinematographic films
20%
12
Motor vehicles, not plying for hire
20%
13
Motor vehicles, plying for hire
24%
14
Computer & computer equipment
30%
15
Bangladeshi made computer software
50%
16
Imported computer software
10%
17
Professional & reference books
30%
18
Aircraft, aero-engine and aerial photographic

apparatus
30%
19
Moulds used in the manufacture of glass or plastic

goods or concrete pipe
30%
20
Mineral oil concerns, below ground installation
100%
21
Mineral oil concerns, above ground installations

(portable boilers, drilling tools, well-head tanks and
rigs)
30%
22
Bridge
2%
23
Road
2%
24
Fly over
2%
25
Pavement runway, taxiway
2.5%
26
Apron, tarmac
2.5%
27
Boarding bridge
10%
28
Communication, navigation aid and other

equipment
5%
37
11.4 Initial depreciation

[Third Schedule, Para 5A]

Applicable for
Building constructed
in Bangladesh after 30
June, 2012
Machinery or plant
installed in Bangladesh
after 30 June, 2012
Year of application
Later of
Year of construction
First year of use
Year of commencement of
commercial production
Later of
Year of installation
First year of use
Year of commencement of
Rate
10% of cost
25% of cost
11.5 Accelerated depreciation allowance

[Third Schedule, Para 7, 7B]

Applicable for

Machinery or plant used in industrial

undertaking set up in Bangladesh
between 1 July, 1977 and 30 June,
2012
Not previously used in Bangladesh
Not applicable for office appliances

and road transport vehicle
Subject to certain conditions
Machinery or plant used in industrial

undertaking referred to in Section
46B and set up in Bangladesh between
1 July, 2014 and 30 June, 2019
Not previously used in Bangladesh
Not applicable for office appliances

and road transport vehicle
Subject to certain conditions
Year of
application
Rate
First year of
commercial
production
50% of actual
cost
Second year
of commercial
production
30% of actual
cost
Third year of
commercial
production
20% of actual
cost
First year of
commercial
production
50% of actual
cost
Second year
of commercial
production
30% of actual
cost
Third year of
commercial
production
20% of actual
cost
38
11.6 Amortization of license fees

[Third Schedule, Para 10A]

Applicable for

Period
allowed
Resident cellular mobile phone operator company For the

period of
Paying Spectrum Assignment fees, GSM license
permission
fees, license acquisition fees or license renewal
fees as license fees before or after 1 July, 2012
Rate
Proportionate
amount in
each year of
permission
For obtaining permission from authority for 2 or

more years
12. Capital gains

[Section 2(15), 31, 32; Second Schedule]
Definition of Capital Asset [Section 2(15)]: Capital asset of an assessee means any
kind of property held by him/her excluding
XX
Stock-in-trade (except for stocks and shares), consumable stores or raw materials
held for business and profession
XX
Movable personal effects including wearing apparel, jewellery, furniture, fixture,

equipment, and vehicles that are used for personal use only
Any profits or gains arising from transfer of a capital asset (both movable and
immovable) as defined in Section - 2(15) of the ITO, 1984 is chargeable to income
tax in accordance with the Second Schedule, Para 2.
Income from capital gain is taxable on the basis of the full value of consideration
received or accrued from the transfer or fair market value, whichever is higher.
The following deductions are permissible in determination of income from capital gain:
XX
Any expenditure incurred solely in connection with the transfer
XX
Cost of acquisition and any capital expenditure incurred for improvement of the
capital asset
Capital gains or portion thereof arising out of transfer of certain capital assets are
exempted from the income tax under certain circumstances and upon fulfillment of
certain conditions as discussed below
39
Source of capital
gain
Condition
Exemption
Transfer of
capital asset
used for business
or profession
immediately before
the transfer
Acquisition of
a new capital
asset within
a year before
or after the
transfer date
Transfer of
Government
securities
Transfer of building
or lands to a new
company registered
under Companies Act,
1913 / 1994 set up for
an industry
None
When capital gain is greater Section

than the cost of new asset, 32(5)
capital gain up to the extent
of cost of acquisition of new
asset shall be exempted and
balance shall be charged
to tax
When capital gain is equal
or less than the cost of
new asset, no tax shall be
charged on the capital gain
Full
Section
32(7)
Full
Section
32(10)
Transfer of capital
asset of a firm to
a new company
registered under
Companies Act,
1913/1994
Entire capital Full

gain is
invested in
equity in the
new company
Section
32(11)
Entire
capital gain
is invested
in the new
company
Reference
13. income from other sources

[Section 33, 34]
The following income of an assessee is assessable under the head income from other
sources
XX
Dividend
XX
Interest
XX
Royalties
XX
Fees for technical services
XX
Income from letting of machinery, plant or furniture and inseparable building
40
XX
Certain deemed income
XX
Income of any kind or from any source which is not classifiable under any other
heads specified in Section-20
The following deductions are permissible in determination of income from other

sources
XX
Interest paid on money borrowed for acquisition of shares
XX
Expenditure incurred for earning relevant income, except for capital expenditure
and personal expenditure
XX
Expenditure for repair, insurance premium, depreciation and obsolescence

allowance according to Third Schedule in respect of letting of machinery, plant
or furniture and inseparable building
14. Deemed income

[Section 19]
Certain incidents such as unexplained investment, cash credits, possession of assets,

non-payment of liabilities are treated as deemed income of an assessee which are
assessable under specific income head.
Sl. Deemed income
1 Unexplained cash credit in the books of
accounts
2 Under recorded value of investment in or
possession of bullion, jewellery and other
valuable article
3 Unexplained expenditure
4
5
6
7
8
9
Head of Income
Reference
Income from
Section - 19(1)
Other Source
Income from
Section - 19(2)
Other Source
Income from
Other Source
Unrecorded investment
Income from
Other Source
Unrecorded money, bullion, jewellery and Income from
other valuable article
Other Source
Income from discontinued business
Income from
Business or
Profession
Dividend received
Income from
Other Source
Fair market value Purchase price of asset Income from
(except stock-in-trade, stock, shares)
Other Source
Salami or Premia
Income from
Other Source
Section - 19(3)
Section - 19(4)
Section - 19(5)
Section - 19(6)
Section - 19(7)
Section - 19(8)
Section - 19(9)
41
Sl. Deemed income

10 Goodwill money, compensation or
damages for cancellation or termination
of contracts and licenses
11 Monetary value of benefit for cancellation
of indebtedness
12 Managing Agency Commission
13
14
15
16
17
18
19
20
21
22
23
Head of Income
Reference
Income from
Section - 19(10)
Other Source
Income from
Other Source
Income from
Other Source
Winnings from lotteries, crossword
Income from
puzzles, card games and other games
Other Source
Profits and gains from insurance Business
Income from
Business or
Profession
Amount received in respect of any loss,
Income from
bad debt, expenditure or trading liability Business or
previously allowed as deduction
Profession
[Sale proceed (original cost written
Income from
down value)] of building, machinery, plant Business or
used for business or profession
Profession
[Sale proceed (original cost written
Agricultural
down value)] of machinery and plant used income
for agriculture
[Insurance / salvage / compensation
Income from
received ((original cost written down
Business or
value) scrap value) of building, machinery, Profession
plant used for business or profession
[Insurance / salvage / compensation
Agricultural
received ((original cost written down
income
value) scrap value) of machinery and
plant used for agriculture
[Sale proceed allowed capital
Income from
expenditure] of asset used for scientific
Business or
research
Profession
Unpaid loan of maximum BDT 500,000 not Income from
paid within 3 years, subject to certain
Other Source
conditions
Loan or gift received which is transfer of
Income from
initial capital of a business or profession, Other Source
subject to certain conditions
Initial capital partly or fully transferred
Income from
from business or profession, subject to
Other Source
certain conditions
Section - 19(11)
Section - 19(12)
Section - 19(13)
Section - 19(14)
Section - 19(15)
Section - 19(16)
Section - 19(17)
Section - 19(18)
Section - 19(19)
Section - 19(20)
Section - 19(21)
Section - 19(21A)
Section - 19(21B)
42
Sl. Deemed income

Head of Income
Reference
24 Amount received from tenant which is not Income
Section - 19(22)
adjustable with rent
from House
Property
25 Export value of exportable garments
against transferred export quota
Income from
Business or
Profession
Section - 19(23)
26 Paid-up capital received by a non-listed

company otherwise than by crossed
cheque or bank transfer
27 Loan received by a company otherwise
than by crossed cheque or bank transfer
Income from
Other Source
Section - 19(24)
Income from
Other Source
Section - 19(26)
28 50% of [Value of motor car / jeep purchased Income from

or hired 10% of (paid-up capital + reserve + Other Source
accumulated profit)] of a company
Section - 19(27)
29 Loan exceeding BDT 500,000 received by

an individual otherwise than by crossed
cheque or bank transfer
Income from
Other Source
Section - 19(28)
30 Unpaid liability in respect of credit

purchase of building construction
material, subject to certain condition
Income from
Other Source
Section - 19(29)
31 Unspent amount of deduction allowed for Income from

Section - 19(30)
repair and maintenance of house property House Property
32 [Income shown in revised return income
shown in original return], subject to
certain condition
Income from
Other Source
Section - 19(31)
43
TAX RATE STRUCTURE
15. Personal Tax rate structure

A person defined under Section - 2(46) of ITO, 1984 except company e.g. every
individual assessee (including non-resident Bangladeshi), firm (partnership or single),
association of persons, Hindu undivided family, artificial juridical person and nonGovernment Organization (NGO) shall have to pay income tax on their total income
according to 6 tier income slabs and tax rates for the Financial Year 2014 - 2015 and
Assessment Year 2015 -2016. The following table entails the 6 tier income slabs and
tax rates for the current assessment year:
Income
Rate of tax
On the first BDT 250,000 of total income of male assesse
Nil
On the first BDT 300,000 of total income of female assesse
Nil
On the first BDT 300,000 of total income of persons aged 65

years & above
Nil
On the first BDT 375,000 of total income of physically

challenged assessee
Nil
On the first BDT 425,000 of total income for gazetted war

wounded freedom fighters
Nil
On the next BDT 400,000 of total income
10%
15%
20%
On the next BDT 3,000,000 of total income
25%
On the balance of total income
30%
44
15.1. Tax on capital gain

Capital gain
Applicable tax
Capital gain arising as result of a

disposal of capital asset within 5
years from the date of acquisition
Tax at rate applicable on total income

including capital gain
Capital gain arising as result of a

disposal of capital asset after 5 years
from the date of acquisition
Lower of
Tax at rate applicable on total
income including capital gain

15% tax the capital gain
15.2 Other tax rates

Applicable for
Income from cigarette business by cigarette manufacturer
other than company
Co-operative societies, registered under Co-operative
Societies Act, 2001
Rate of tax
45%
15%
15.3 Minimum tax

Minimum tax on individual, Hindu undivided family and other association of persons is
charged on the basis of location. An assessee with taxable income exceeding exemption
limit (male: BDT 250,000; female, persons aged 65 years & above: BDT 300,000;
physically challenged person: BDT 375,000; gazetted war wounded freedom fighters:
BDT 425,000) shall pay minimum tax based on their location as stated below Location of assessee
Assessees residing in Dhaka and Chittagong City Corporation
area
Assessees residing in other City Corporation area
Assessees residing in other than City Corporation area
Minimum tax
BDT 5,000
BDT 4,000
BDT 3,000
Every firm having more than gross receipts of BDT 50 lakh is liable to pay minimum
tax at 0.30% of gross receipts from all sources for the income year.
15.4 Surcharge on individual assessee
Surcharge will be applicable at the following rates on net tax payable by individual
assesses having net wealth according to the following slabs
45
Net Worth Value

Up to BDT 2.25 crore
More than BDT 2.25 crore up to BDT 10 crore
More than BDT 10 crore up to BDT 20 crore
More than BDT 20 crore up to BDT 30 crore

Rate of Surcharge
Nil
10%
15%
20%
25%
However minimum surcharge has been fixed at BDT 3,000.

15.5 Incidence of tax on non-resident assessee
A person who is a non-resident is liable to pay tax on the income, profits and gains
which are received; deemed to have been received; deemed to accrue or arise to
him / her in Bangladesh.
A non-resident Bangladeshi (NRB) is subject to pay tax at 6 tier income and tax rate
as applicable for a resident assessee.
A non-resident Bangladeshi is entitled to tax relief and tax rebate that are admissible
to a resident assessee.
A non-resident foreigner assessee is liable to pay tax on his total income at 30%
[Second Schedule]. The maximum limit of exempted income from tax is not
applicable for such an assessee.
A non-resident foreigner assessee is not entitled to any sort of tax relief and tax
rebate that are admissible to a resident assessee.
16. Corporate tax rate structure

Tax rates applicable for companies are as follows:

Sl. Applicable for
1
Publicly traded company except for banks, insurance company,

other financial institutions, merchant bank, cigarette
manufacturing companies and mobile operator companies
If such company transfers at least 20% share through IPO, it
will enjoy 10% rebate on tax in the respective year
Rate of tax
25%
Non-publicly traded company
35%
Publicly trade bank, insurance company and financial

institution
40%
46
Sl. Applicable for
Rate of tax
Non-publicly traded bank, insurance company and financial

institution
42.5%
Bank, insurance company and financial institution obtaining

approval from Government in 2013
40%
Merchant bank
37.5%
Cigarette manufacturing company
45%
Mobile phone operator company
45%
Mobile phone operator company converted into public

limited company in the following manner Issuing minimum 10% of shares through IPO, of which
maximum 5% issued through Pre-IPO
If such company transfers at least 20% share through IPO, it
will enjoy 10% rebate on tax in the respective year
40%
10
Income from dividend
20%
11
Capital gain arising from transfer of stocks and shares of any

company registered under Companies Act, 1994
10%
12
Capital gain arising from transfer of capital assets other

than tocks and shares of any company registered under
Companies Act, 1994
15%
16.1 Minimum tax

[Section 16CCC]
Applicable for
Company
Condition
Irrespective of profit or loss in
the assessment year
Irrespective of profit or loss in
Industrial
the assessment year
undertaking
For the first 3 income years
engaged in
manufacturing since commencement of
of goods

Rate of tax
0.30% of gross receipts from all
sources for the income year
0.10% of gross receipts from all
sources for the income year
Gross receipts for minimum tax purpose will constitute the following XX
All receipts derived from sale of goods
XX
All fees, charges, commissions, discounts received for rendering services or

giving benefits
XX
All receipts derived from any head of income
47
16.2 Additional tax

[Section 16B]
Applicable for
Public limited
company except
for banking or
insurance company
Company
Condition
Not declared or distributed at least 15%
dividend or bonus share within six months
from the end of the income year
Rate of tax
5% on
undistributed
profit
Employs or allows any individual who is not

a Bangladeshi Citizen / expatriate without
prior approval of BOI or any competent
authority of Government
Higher of
50% of
income tax
payable
BDT 5 lakh
16.3 Excess profit tax

[Section 16C]
Applicable for
Banking company operating
under Bank Companies Act,
1991 (BCA, 1991)
Condition
Shows profit in return exceeding
50% of its capital & reserve (as
per BCA, 1991)
Rate of tax
15% of (shown
profit capital
& reserve)
17. Tax deducted at source

Tax on certain income shall be deducted or collected at source as advance payment

in accordance with Chapter VII of ITO, 1984. The income subject to such deduction
and respective deduction rates are summarized in the following table. Some
abbreviations are used in the following table such as RZ (Respective zone), Dhk
(Dhaka Zone), Ctg (Chittagong Zone) and LTU (Large Tax-payer Unit).
Sl
Applicable for
Salaries including salaries of

Government employee
Discount on real value of

Bangladesh Bank bills
Rate of tax
Average rate
applicable to
assessee based on
personal tax rate
structure
Higher of maximum
rate or applicable
rate
Applicable
zone
RZ
LTU
Reference
Sec - 50
Sec 50A
48
Sl
Applicable for
Remuneration to Member of
Parliament
Interest on securities
Subject to certain
conditions
Payment to contractors for
supply of goods, execution
of contracts or sub-contract
Fees for service rendered
by doctor at a general or
specialized hospital or
diagnostic center
Royalty or technical knowhow fee
9
10
11
12
13
14
15
16
Fees for professional or

technical services
If TIN is furnished
If TIN is not furnished
Payment for catering service
Payment for cleaning service
- commission
Payment for cleaning service
gross receipt
Payment to collection
and recovery agency commission
Payment to collection and
recovery agency gross
receipt
Payment for contract or toll
manufacturing
Payment to credit rating
agency
Payment for event
management commission
Rate of tax
Average rate
applicable to
assessee based on
personal tax rate
structure
5%
As specified in Rule
- 16
10%
10%
10%
15%
10%
10%
Applicable
zone
RZ
Reference
Sec 50B
LTU
Sec 51
Dhk 2
Ctg 2
Other - RZ
Dhk - 10
Ctg 2
Other - RZ
Sec 52;
Rule - 16
Dhk - 8
Ctg 2
Other - RZ
Dhk - 8
Ctg 2
Other - RZ
Sec 52A(2)
Dhk - 14
Ctg 2
Other - RZ
Sec - 52AA
Sec 52A(1)
Sec 52A(3)
1.5%
10%
1.5%
10%
10%
10%
49
Sl
Applicable for
17
Payment for event

management gross receipt
Indenting commission
1.5%
Meeting or training fees or

honorarium
Payment to motor garage or
workshop
Payment for printing service
10%
Payment for private

container port or dockyard
service
Payment to private
security service provider
commission
Payment to private security
service provider gross
receipt
Product processing charge
Shipping agency commission
Stevedoring / berth
operation commission
Payment for supply of
manpower commission
Payment for supply of
manpower gross receipt
Payment to transport
provider
Payment for any other
service which is not
mentioned in Chapter VII
and is not a service provided
by any bank, insurance or
financial institutions
5%
18
19
20
21
22
23
24
25
26
27
28
29
30
31
32
Payment to mobile network

operator, technical support
service provider or service
delivery agents engaged in
mobile banking operations
Rate of tax
Applicable
zone
Reference
7.5%
5%
3%
10%
1.5%
10%
5%
10%
10%
1.5%
3%
10%
10%
LTU
50
Sl
Applicable for
33
Clearing & forwarding

agency commission
10%
34
Manual cigarette
manufacturer
10%
35
Cigarette manufacturer
36
41
Compensation against
acquisition of immovable
property situated in city
corporation, paurashava or
cantonment board area
Compensation against
acquisition of immovable
property situated outside
city corporation, paurashava
or cantonment board area
Interest on saving
instrument
Subject to certain
conditions
Brick manufacturer
One section brick field
One and half section brick
field
Two section brick field
Automatic brick field
Commission of letter of
credit
Travel agent
42
Renewal of trade license
37
38
39
40
Dhaka City Corporation

or Chittagong City
Corporation
Other City Corporation
Rate of tax
3% of MRP
2%
Applicable
zone
Dhk - 15
Ctg 3
Other - RZ
Dhk - 10
Ctg 4
Other - RZ
Respective
Zone
Dhk - 15
Ctg 2
Other - RZ
Reference
Sec 52AAA
Sec
52B(1)
Sec
52B(2)
Sec 52C
1%
Dhk - 15
Ctg 2
Other - RZ
Sec 52C
5%
Dhk - 10
Ctg 4
Other - RZ
Sec 52D
Dhk - 7
Ctg 4
Other - RZ
Sec 52F
Sec 52I
0.30% of airfare or
cargo charge
Dhk - LTU
Ctg 2
Dhk - 4
Ctg 2
BDT 500
Dhk - 3
Ctg 2
Other - RZ
BDT 45,000
BDT 70,000
BDT 90,000
BDT 150,000
5%
Sec 52JJ
Sec 52K
BDT 300
51
Sl
43
Applicable for
Paurashava at any district
headquarter
Other paurashava
Freight forward agency
commission
Rate of tax
Applicable
zone
Reference
BDT 300
BDT 100
15%
Dhk - 6
Ctg 3
Other - RZ
Dhk - 13
Ctg 3
Other - RZ
Dhk - 9
Sec 52M
Sec 52P
Sec 52Q
44
Rental power company
6%
45
Foreign technician serving in

a diamond cutting industry
Services from convention
hall, conference center, etc.
5%
Services provided to any

foreign person by a resident
International Gateway (IGW)
service operator
Interconnection Exchange
(ICX), Access Network
Services (ANS), any other
person having agreement
with BTRC
Manufacturer of soft drink
and mineral or bottled
water
Payment in excess of
premium paid on life
insurance policy
10%
Dhk - 4
Ctg 2
Other - RZ
Dhk - 11
1%
Dhk 15
Sec 52R
4%
Gazipur
Zone
Sec 52S
5%
LTU
Sec 52T
Local letter of credit (on

proceeds exceeding BDT
500,000)
Subject to certain
conditions
Payment to regulatory
authority by cellular mobile
phone operator
3%
Ctg 2
Coxs Bazar
2
Other LTU
Dhk
LTU
Sec 52U
46
47
48
49
50
51
52
53
5%
Sec 52N
Sec 520
5%
10%
Sec 52V
52
Sl
Applicable for
54
Importer
(Rate may vary subject to
certain conditions)
Rent payment for house
property
55
56
57
58
59
Shipping business of a
resident
Freight received or receivable
in or out of Bangladesh
Freight received or
receivable from service
rendered between two or
more foreign countries
Export of manpower
Export of knit wear and
woven garments, terry
towel, carton, garments
accessories, jute goods,
frozen foods, vegetables,
leather goods, and packed
food
Member of Stock Exchanges
60
Export of goods except for

items specified in Sec 53BB
61
Goods or property sold by

public auction
62
Purchase of film, drama, TV

or radio program
Rate of tax
5%
5%
5%
Applicable
zone
Dhk - 14
Ctg 1
Other - RZ
Dhk - 7
Ctg 2
Other - RZ
Dhk - 10
Ctg 4
Other - RZ
Reference
Sec 53;
Rule 17A
Sec 53A
Sec 53AA
3%
10%
Dhk - 4
0.6%
Dhk - 4
0.05%
Dhk - 7
Ctg 3
Sec
53BBB;
SRO 334
AIN / IT /
2011
0.6%
Dhk 4
Sec
53BBBB;
SRO 224
AIN / 2015
5%
1% for auction of tea
Dhk - 9
Ctg 4
Other - RZ
Dhk 12
Sec 53C;
Rule 17D
10%
Sec 53B;
Rule 17C
Sec 53BB;
SRO 224
AIN / 2015
Sec
53D(1)
53
Sl
Applicable for
63
10%
64
Performance in film, drama,

advertisement, TV or radio
program
Subject to certain condition
Export cash subsidy
Applicable
zone
Dhk 12
3%
Dhk 4
65
Commission, discount, fees
10%
66
Distributor purchasing goods

at a price lower than fixed
retail price
Subject to certain condition
Commission or remuneration
paid to agent of foreign
buyer
Interest on savings deposit,
fixed deposit, term deposit
If TIN is furnished
If TIN is not furnished and
deposit amount is up to BDT
100,000
If TIN is not furnished and
deposit amount exceeds BDT
100,000
Public university,
educational institutions,
ICAB, ICMAB and ICSB
3%
Dhk - 12
Ctg 4
Other - RZ
Dhk - 12
Ctg 4
Other - RZ
67
68
69
Real estate or land

development business
70
71
Insurance commission
Fees etc. of surveyor of
general insurance company
Rate of tax
10%
Reference
Sec
53D(2)
Sec
53DDD
Sec
53E(1)
Sec
53E(2)
Dhk - 6
Ctg 3
Other - RZ
Dhk - 1
Sec 53EE
Dhk - 5
Ctg 4
Other - RZ
LTU
LTU
Sec 53FF
Sec 53F
10%
10%
15%
10%
As specified in
Section 53FF
5%
15%
Sec 53G
Sec 53GG
54
Sl
Applicable for
72
Transfer of property
73
Lease of property
Subject to certain
conditions
4%
74
Interest on deposit of Post

Office Savings Bank Account
10%
75
Rental value of vacant land,

plant or machinery
5%
76
Advertisement or airtime
bill of newspaper, magazine,
private TV channel, private
radio station, website
Transfer of securities
or mutual fund units by
sponsor shareholder,
director, placement holder
of listed companies
Transfer of share of
shareholder of Stock
Exchange
Signing money, subsistence
money, house rent etc. paid
to land owner by real estate
developer
4%
77
78
79
Rate of tax
As specified in
Section 53H and
Rule 17II
Applicable
Reference
zone
Sec 53H;
Dhk
Rule 17II
Central
survey
zone
Ctg 4
Other - RZ
Sec 53HH
Dhk
Central
survey
zone
Ctg 4
Other - RZ
Dhk - 9
Sec 53I
Ctg 4
Other - RZ
Dhk - 15
Sec 53J
Ctg 4
Other - RZ
Dhk - 5
Sec 53K
Ctg 3
Other - RZ
5%
Dhk - 3
Ctg 3
Sec 53M
15%
Dhk - 3
Ctg 3
Sec 53N
15%
Dhk - 5
Ctg 2
Other - RZ
Sec 53P
55
Sl
Applicable for
80
Dividend
Company
Assessee other than
company, if TIN is furnished
Assessee other than
company, if TIN is not
furnished
Lottery
81
82
83
84
85
86
87
88
89
Payment to nonresident
for accounting or tax
consultancy
Payment to nonresident for
advertisement making
advertisement broadcasting
for advisory or consultancy
service
for air transport or water
transport
architecture, interior design
or landscape design
artist, singer or player
capital gain received from
capital assets (not being
securities listed with stock
exchange)
Rate of tax
20%
10%
Applicable
zone
Dhk - 13
Ctg 4
Other - RZ
Reference
Sec 54
15%
20%
20%
Dhk - 9
Ctg 3
Other - RZ
Dhk - 11
Sec 55
Sec 56
15%
20%
30%
7.5%
20%
30%
15%
56
Sl
Applicable for
90
company or firm for
capital gain received
from securities listed with
any stock exchange in
Bangladesh which is not
exempted from tax in the
country of such non-resident
certification
charge or rent for satellite,
airtime or frequency
contractor, sub-contractor
or supplier
courier service
Dividend
91
92
93
94
95
Rate of tax
Applicable
zone
Reference
10%
30%
20%
5%
15%
a) Tax treaty countries:

- If the beneficial owner
is a company and holds
directly at least 10% of the
companys capital
10%
- For other cases
15%
b) Other than tax treaty

countries:
96
97
98
- For Company
20%
- For all other cases

insurance premium
for interest, royalty or
commission
legal service
30%
10%
20%
20%
57
Sl
Applicable for
99

machinery rent
for management or event
management
for pre-shipment inspection
service
professional service
salary or remuneration
for exploration or drilling in
petroleum operation
for survey for oil and gas
exploration
for any service for making
connectivity between oil or
gas field and its export point
Any other payments to non
resident
100
101
102
103
104
105
106
107
108 Motor vehicle presumptive

tax
Rate of tax
Applicable
zone
Reference
15%
20%
30%
20%
30%
5.25%
5.25%
5.25%
30%
As specified in SRO
160 AIN / 2014
109 Cargo or launch presumptive As specified in SRO

tax
162 AIN / 2014
Central
survey
zone
SRO 160
AIN / 2014
Dhk - 5
Ctg 3
Other - RZ
SRO 162
AIN / 2014
18. Payment of tax deducted at source

[Rule 13, 14]
All taxes deducted or collected (except for the following cases) in accordance with
Chapter VII: Section - 48 to 63 shall be paid to the credit of the Government by
electronic payment or income tax challan within 2 weeks from the end of the month
58
of deduction or collection and such tax shall be deposited to Bangladesh Bank or

Sonali Bank. The exceptions are the following cases
XX
Supply of goods or execution of contract under Section - 52
XX
Fees for professional or technical services under Section 52A
XX
House property under Section 53A
XX
Commission or fees under Section 53E
Tax deducted or collected in respect of the above mentioned cases, the deducting
authority has to issue a cheque equivalent to the deducted amount in favor of the
concerned DCT and hand it over to the person from whom the tax has been deducted
or collected at source. Such person is responsible to deposit the cheque through
income tax challan to Bangladesh Bank or Sonali Bank.
19. Final settlement of tax liability

[Section 82C]
Tax deducted or collected at source in accordance with the provisions mentioned

below shall be deemed to be the final discharge of tax liability from that source.
These are as follows:
Sl.
Sources of tax deduction or collection
TDS Section
Reference
Payment on account of supply of goods or execution of

contract
Sec - 52
Payment on account of royalty, fees for technical services
Sec - 52A(2)
Commission from clearing and forwarding agency business
Sec - 52AAA
Value of banderols computed on account of manufacturer of

cigarettes
Sec 52B
Compensation against acquisition of property
Sec 52C
Amount received on account of sale of rental power by

rental power companies
Sec 52N
Amount received as interest from saving instruments
Sec 52D
Amount of tax collected from travel agent
Sec 52JJ
Salaries of a foreign technician serving in a diamond cutting

industry
Sec 52O
10
Amount received by International Gateway (IGW) services

operator or Interconnection Exchange (ICX) in respect of
international phone call
Sec 52R
59
TDS Section
Reference
Sl.
Sources of tax deduction or collection
11
Amount computed in respect of goods imported (excluding

goods imported by an industrial undertaking as raw
materials for its own consumption)
Sec 53
12
Amount received or receivable from shipping business of a

resident
Sec 53AA
13
Amount received on account of export of manpower
Sec 53B
14
Amount received on account of export of certain items
Sec 53BB
15
Amount received on account of transaction by a member of

stock exchange
Sec 53BBB
16
The amount received on account of export of any goods

except certain items
Sec 53BBBB
17
Amount of auction purchase
Sec 53C
18
Amount received on account of courier business
Sec 53CC
19
Amount received on account of export cash subsidy
Sec 53DDD
20
Commission, charges paid to agent of foreign buyer
Sec 53EE
21
Interest or share of profit on saving deposit, fixed deposit,

term deposit of a public university, educational institutions,
ICAB, ICMAB and ICSB
Sec 53F(1)
(c)
22
Amount received from persons engaged in real estate or

land development business
Sec 53FF
23
Remuneration or reward, whether by way of commission or

otherwise payable to an insurance agent
Sec 53G
24
Payment on account of survey by surveyor of a general

insurance company
Sec 53GG
25
Value of property
Sec 53H
26
Income derived from transfer of securities or mutual fund

units by sponsor shareholders of a company
Sec 53M
27
Income derived from transfer of share of Stock Exchange
Sec 53N
28
Amount on account of winnings from lotteries, crossword

puzzles, card games, gambling, betting
Sec 55
However final discharge of tax liability shall not be applicable for a contractor or
sub-contractor of an oil company, oil marketing companies and its dealer or agent
excluding petrol pump station, any company engaged in oil refinery and any company
engaged in gas transmission or gas distribution.
60
Income from the sources on which final discharge of tax liability applies shall be
determined on the basis of the tax deducted or collected at source and the rate
or rates of tax applicable for the assessment year. Any income shown or assessed
in excess of the amount determined in this way shall be liable to tax at the rate
applicable for the assessment year. Such income shall not be set off against loss of
earlier year or years.
20. Set-off and carry forward of loss

[Section 37, 38, 39, 41, 42]
The rules of set-off and carry forward of any loss incurred is summarized below Carry forward to
set off against
Head of income
Set-off
following years
income
Income from salary N/A
N/A
Interest on
Against income from
Cannot be carried
securities
any other head
forward
Income from house Against income from
Cannot be carried
property
any other head
forward
Set off against
Agricultural
Against income from
income
any other head except agricultural
for income from capital income
gain
Income from
business or
profession
Income from
speculation
business
Against income from

any other head except
for income from
House
property
Capital Gain
Against any other
income from
speculation business
Cannot be set off
against any other head
of income
Set off against

income from
same business or
profession
Set off against

income from
speculation
business
Limitations for
carry forward
N/A
N/A
N/A
Time limit:
6 successive
years
Amount Limit:
None
Time limit:
6 successive
years
Amount Limit:
None
Time limit:
6 successive
years
Amount Limit:
None
61
Head of income
Set-off
Capital gains
Against any other

income from capital
gain
Cannot be set off
of income
Carry forward to
set off against
following years
income
Set off against
capital gain
Limitations for
carry forward
Time limit:
6 successive
years
Amount limit:
Amount
exceeding BDT
5,000
Income from other Against income from

sources
any other head
Cannot be carried
forward
N/A
Income from any

Cannot be set off
source which is
exempted from tax of income
Cannot be carried
forward
N/A
However any loss in respect of any income from any head shall not be set-off against
any income from manufacturing of cigarettes.
21. Carry forward of depreciation allowance

[Section 42(6)]
Depreciation allowance which cannot be given full effect in any year because of
there being no profits / gains or being inadequate profits / gains, such unadjusted
allowance or part thereof shall be carried forward to the succeeding years and shall
be treated as part of depreciation allowance for those respective years. There is no
time limit or amount limit for such carry forward of depreciation allowance.
However carried forward business loss and loss in speculation business shall be setoff before carried forward depreciation allowance is given effect in any year.
62
FILING OF RETURN &

PAYMENT OF TAX
22. Filing of return of income

[Section 75]
XX
Every person whose total income during an income year exceeds the exemption
limit (i.e. the maximum amount which is not chargeable to tax) and every person
(irrespective of his income in the income year) who was assessed to tax for any
of the preceding three years shall furnish a return of his income along with such
other particulars as may be prescribed. Moreover the following persons are also
required to file a return of income
-- Who resides in a city corporation or paurashava or divisional headquarters or
district headquarters and owns a motor car or is a member of a club registered
under VAT Act 1991
-- Who runs any business or profession having trade license from a city
corporation, a paurashava or a union parishad; and operates a bank account
-- Who is registered with a recognized professional body as a doctor, dentist,
lawyer, income tax practitioner, chartered accountant, cost and management
accountant, engineer, architect, surveyor or any other similar profession
-- Who is a member of a chamber of commerce and industries or a trade
association
-- Who is a candidate for an office of any paurashava, city corporation or a
Member of Parliament
-- Who is a participant in a tender floated by Government, semi-Government,
autonomous body or local authority
-- Who is a non-Government organization registered with NGO Affairs Bureau
XX
Every company is required to file a return of income or return of any other person
for whom it is assessable.
XX
Every individual is required to furnish the following statements (prepared in

prescribed form and verified in prescribed manner) accompanying the return of
income
-- Particulars of his lifestyle
-- Particulars of total assets, liabilities and expense in respect of himself, his

63
spouse, minor children and dependents

-- Particulars of any asset transferred by him to any other person
XX
Every company is required to furnish the following documents accompanying the

return of income
-- Audited statement of accounts
-- A reconciliation between profit or loss shown in the accounts and profit and
loss disclosed in the return of income
XX
The last date of filing return for all assessee except for a company is 30 September
of the assessment year.
XX
The last date of filing return for a company is 15 July of assessment year. If 15
July of assessment year falls within 6 months from the end of the income year
of the company, it has to file the return within 6 months from the end of the
income year.
23. Filing of revised return

[Section 78]
Following persons can file a revised return at any time before the assessment is
made:
XX
A person who has not filed a return under Section 75
XX
A person who has not filed a return as required by a notice issued by the DCT
under Section 77
XX
A person who has filed a return but discovered any omission or incorrect statement
in such return
24. Return of withholding tax

[Section 75A]
Every company is required to file a return of withholding tax collected or deducted

at source to the Deputy Commissioner of Taxes where it is being assessed. Such
return has to be filed quarterly, within 15 October, 15 January, 15 April and 15 July
of each financial year. However the deadline of submission may be extended by DCT
up to 15 days.
The return of withholding tax shall be filed using the form prescribed in Rule 24A.
The return has to be verified and signed off by the principal officer of the company
and accompanied by a statement of deduction or collection of tax and copy of
treasury challans or pay orders.
If a company required to deduct, collect or pay to the credit of the Government tax,
64
fails to do so, it will be treated as an assessee in default and penalized under Section
124 of ITO, 1984.
25. Payment of tax on the basis of return

[Section 74]
Every person who is required to file a return under Section 75, 77, 78, 89(2), 91(3)
& 93(1) has to pay tax on or before the date on which he/she files the return.
The amount of tax to be payable by him/her would be higher of (a) tax on the basis
of such return and (b) minimum tax liability as per Section - 16CCC, reduced by
the amount of any tax deducted from his/her income and any tax paid by him in
accordance with Chapter VII: Payment of tax before assessment.
26. Advance payment of tax

[Section 64 - 73]
An assessee is required to pay advance tax in a financial year, if he/she has total
income exceeding BDT 400,000 in the latest income year in respect of which he/she
has been assessed on regular basis or provisionally. If a person, who has not been
assessed previously by the way of regular assessment, estimates his/her income to
exceed BDT 400,000 in the income year, he/she is required to pay advance tax.
Amount of advance tax payable = Total income of the latest income year as assessed
on regular basis or provisionally x Rates in force in the respective financial year
Amount of TDS
If a person liable to pay advance tax estimates that his/her tax liability in the
relevant assessment year would be less than the advance tax liability, he/she may
submit estimation of his/her tax liability and pay reduced advance tax accordingly.
Advance tax is payable in 4 equal installments on 15 September, 15 December, 15

March and 15 June.
27. Mode of payment

[Rule 26A]
All payments of tax under Section - 64, 70, 73, 74, 82D, 83(2), 84, 89(3), 107(2)
(a), 120, 121(4)(a), 123 - 129, 135(2), 137(1), 154(1), 158(5), 160(1) and any other
payments under the Ordinance shall be made by pay order or demand draft or account
payee cheque of any scheduled bank in favor of concerned DCT or electronic payment.
However if the payment does not exceed BDT 10,000, then it can be made through
treasury challan.
65
ASSESSMENT
28. Provisional assessment

[Section 81]
The DCT can make a provisional assessment of tax in a summary manner at any time
after 1 July of the concerned income year, based on the following
XX
Return, accounts and documents, if filed
XX
The last assessment including provisional assessment, if return is not filed
29. Assessment on correct return

[Section 82]
Where a return or revised return is filed fulfilling certain conditions and the DCT
is satisfied that the return is correct and complete without requiring the presence
of the assessee or production of any evidence, he will assess the total income
and determine the tax payable on the basis of such return and communicate the
assessment order to the assessee within 30 days.
30. Universal self-assessment

[Section 82BB]
XX
Where an assessee furnishes a return of income (manually or electronically)

fulfilling certain conditions, and pays tax on the basis of such return, the DCT
or other authorized official shall issue an acknowledgement receipt. Such
acknowledgement will be deemed as assessment order.
XX
After processing the return, the DCT shall send the assessee a demand notice
along with an intimation specifying computed income, tax liability, tax credit
allowed, net tax payable or refundable and other particulars, within 30 days of
computation. Provided that no such intimation shall be sent after 12 months from
the end of the financial year in which the return is furnished.
XX
No demand notice requiring the assessee to pay more tax will be made unless he/
she has been given an opportunity of being heard.
66
XX
The Board may select a number of returns filed under universal self-assessment
for the purpose of audit. However such a return would not be selected for audit
if it shows at least 20% higher income than the income assessed or shown in the
immediately preceding assessment year and fulfills the following conditions:
-- The return is accompanied by corroborative evidences in support of tax
exempted income
-- It is accompanied by a copy of bank statement or account statement
supporting any sum or aggregate of sums of loan exceeding BDT 5,00,000
taken from any person during the income year
-- It does not show receipt of gift during the year
-- It does not show any income chargeable to tax at a rate reduced under
Section 44
-- It does not show or result any refund
XX
If a new assessee deriving income from business or profession shows income at

least not less than 25% of the capital invested in such business or profession and
pays tax accordingly, no question regarding the source of income would be raised
XX
The initial capital investment or any fraction of it cannot be transferred within

the income year when the investment was made or within 5 years from the end
of such income year.
31. Spot assessment

[Section 82D]
The DCT may fix tax payable by an assessee (except for a company), who has not
previously been assessed and carries on any business or profession in any shopping
center or commercial market or has a small establishment. The receipt obtained for
payment of tax in such case would be considered as assessment order.
32. Assessment after hearing

[Section 83]
When a DCT is not satisfied with the correctness and completeness of a return or
revised return, he shall serve a notice requiring the presence of the person filing the
return for hearing or production of evidence supporting the return.
Within 30 days of the hearing and consideration of evidence, the DCT shall assess the
income and determine the amount of tax and communicate the order within 30 days
of such assessment.
67
33. Assessment on the basis of report of a Chartered

Accountant

[Section 83AAA]
If the Board has reasonable cause to believe that a return or revised return filed
by a company is incorrect or incomplete, it may appoint a registered Chartered
Accountant to examine the accounts of the assesse.
The Chartered Accountant shall submit a report of findings to the Board. The DCT
shall assess the total income and determine the tax liability based on the report of
the Chartered Accountant, other evidences and hearing of the assessee.
34. Best judgement assessment

[Section 84]
The DCT shall assess the total income and determine the tax liability as per his best
judgement in the following cases
XX
Where a person fails to file a return required by a notice under Section 77
XX
Where a person has not filed a return or revised return under Section 78
XX
Where a person fails to comply with the requirements of a notice under Section
79, 80 or 83(1)
35. Other assessments

Assessments for some special cases are handled with according to dedicated sections
as listed below:
Special case
Reference
Special provisions regarding assessment of firms

Assessment in case of change in the constitution of a firm
Assessment in case of constitution of new successor firm
Assessment in case of succession to business otherwise
than on death
Assessment in case of discontinued business
Assessment in case of partition of a Hindu undivided
family
Assessment in case of persons leaving Bangladesh
Assessment in case of income of a deceased person
Assessment in case of income escaping assessment
Section
Section
Section
Section
85
86
87
88
Section 89
Section 90
Section 91
Section 92
Section 93
68
TAX INCENTIVE
There are broadly three categories of tax incentives that are provided to the
assessees by the Government with the aim to reduce their tax burden, promote
ethical and transparent tax practice and encourage investment. The categories are
tax exemption, reduced rate of tax and tax rebate.
36. Tax Exemption

The following table is an extensive but not exhaustive list of the tax exemptions
provided by the Government to different types of assessees (individual, firm,
association of persons, Hindu undivided family, local authority, company and other
artificial juridical person). It compiles the exemptions provided to such assessees
through Income Tax Ordinance, 1984 (ITO, 1984) and SROs issued by the Government
at different times.
69
Sl. Assesseee / Applicable for

Source of Income
No.
1 Industrial undertakings set
All income, profits
up in Dhaka and Chittagong
and gains except
divisions (excluding Dhaka,
capital gain and
Narayangonj, Gazipur,
disallowance under
Chittagong, Bandarban,
Section 30
Rangamati and Khagrachari)
between 1 July, 2011 and 30
June, 2019
Engaged in production
of active pharmaceutical
ingredient industry and radio
pharmaceutical industry;
automobile manufacturing
industry; barrier contraceptive
and rubber latex; basic
chemicals or dyes and
chemicals; basic ingredients
of electronic industry
(e.g. resistance, capacitor,
transistor, integrator circuit);
bi-cycle manufacturing
industry; bio-fertilizer; biotechnology; boilers; brick
made of automatic Hybrid
Hoffman Kiln or Tunnel Kiln
technology; compressors;
computer hardware;
energy efficient appliances;
insecticide or pesticide; petrochemicals; pharmaceuticals;
processing of locally produced
fruits and vegetables; radioactive (diffusion) application
industry (e.g. developing
quality or decaying polymer
or preservation of food
or disinfecting medicinal
equipment); textile
machinery; tissue grafting;
tyre manufacturing industry or
other industrial undertakings
specified by the Government
Subject to fulfilling certain
conditions
[Section 46B]
Rate of
exemption
100%
Period of
exemption
First 2 years
60%
3rd year
40%
4th year
20%
5th year
70

Source of Income
No.
2 Industrial undertakings set up All income, profits
in Rajshashi, Khulna, Sylhet,
and gains except
Barisal and Rangpur divisions
capital gain and
(excluding City Corporation
disallowance under
area) and Bandarban,
Section 30
Rangamati and Khagrachari
between 1 July, 2011 and 30
June, 2019
Engaged in production
of active pharmaceutical
ingredient industry and radio
pharmaceutical industry;
automobile manufacturing
industry; barrier contraceptive
and rubber latex; basic
chemicals or dyes and
chemicals; basic ingredients
of electronic industry
(e.g. resistance, capacitor,
transistor, integrator circuit);
bi-cycle manufacturing
industry; bio-fertilizer; biotechnology; boilers; brick
made of automatic Hybrid
Hoffman Kiln or Tunnel Kiln
technology; compressors;
computer hardware;
energy efficient appliances;
insecticide or pesticide; petrochemicals; pharmaceuticals;
processing of locally produced
fruits and vegetables; radioactive (diffusion) application
industry (e.g. developing
quality or decaying polymer
or preservation of food
or disinfecting medicinal
equipment); textile
machinery; tissue grafting;
tyre manufacturing industry or
other industrial undertakings
specified by the Government
conditions
[Section 46B]
Rate of
exemption
100%
Period of
exemption
First 2 years
70%
3rd year
55%
4th year
40%
5th year
25%
6th year
20%
7th to 10th
year
71

Source of Income
No.
3 Physical infrastructure
All income, profits
facilities set up between 1
and gains except
July, 2011 and 30 June, 2019 capital gain and
Includes deep sea port;
disallowance under
elevated expressway;
Section 30
flyover; gas pipeline;

hi-tech park; Information
and Communication
Technology (ICT) village or
software technology zone;
Information Technology
(IT) park; large water
treatment plant and
supply through pipeline;
Liquefied Natural Gas
(LNG) terminal and
transmission line;
mono-rail; rapid transit;
renewable energy (e.g.
energy saving bulb,
solar energy plant,
windmill); sea or river
port; toll road or bridge;
underground rail; waste
treatment plant or other
physical infrastructure
facilities specified by the
Government
Subject to fulfilling
certain conditions
[Section 46C]
Industries established on
Income from such
or after 1 January, 2012 in
industry
the Export Processing Zones
of Dhaka and Chittagong
divisions (except in
Bandarban, Rangamati &
Khagrachhari); as mentioned
in the Bangladesh Export
Processing Zones Act,
1980 (Section - 10) or the
Bangladesh Private Export
Processing Zones Act, 1996
[SRO 219 AIN / IT / 2012]
Rate of
exemption
100%
Period of
exemption
First 2 years
80%
3rd year
70%
4th year
60%
5th year
50%
6th year
40%
7th year
30%
8th year
20%
9th year
10%
10th year
100%
First 2 years
50%
Next 2
years
25%
Next 1 year
72

No.
5 Industries established on
or after 1 January, 2012
in the Export Processing
Zones of Bandarban,
Rangamati, Khagrachhari
and Divisions other than
Dhaka and Chittagong
divisions; as mentioned
in the Bangladesh Export
Processing Zones Act,
1980 (Section - 10) or the
Bangladesh Private Export
Processing Zones Act, 1996
[SRO 219 - AIN / IT /
2012]
6 Private power generation
companies (except
coal based electricity
generation companies)
starting operation within
31 December, 2014
[SRO 211 AIN / IT /
2013]
Source of Income
Income from such
industry
Income from
power generation
business
Interest payable
on foreign loan
Royalties,
technical
know-how
and technical
assistance fees
Capital gain
form transfer of
companys share
Income from
Private coal based
power generation
electricity generation
business
companies signing contract
Interest payable
within 30 June, 2020
on foreign loan
[SRO 213-AIN / IT / 2013]
Royalties,
technical
know-how
and technical
assistance fees
Capital gain
form transfer of
companys share
Rate of
exemption
100%
Period of
exemption
First 3 years
50%
Next 3
years
25%
Next 1 year
Full
15 years
from the
date of
starting
operation
Full
15 years
from the
date of
starting
operation
73

No.
8 Private power generation
companies (except
starting operation on or
after 1 January, 2015
[SRO 212 AIN / IT /
2013]
9 Renewable energy projects
[SRO 228 AIN / IT /
2009]
10 Industrial undertaking
engaged in production of
rice bran oil
Commencing production
by 30 June, 2019
Set up in Dhaka and
Chittagong divisions
(excluding city
corporation area,
Bandarban, Rangamati
and Khagrachari
districts)
[6th Schedule, Part A,
Para 45]
11 Industrial undertaking
engaged in production of
rice bran oil
Commencing production
by 30 June, 2019
Set up in Rajshashi,
Khulna, Sylhet, Barisal
and Rangpur divisions
(excluding city
corporation area) and
and Khagrachari districts
Para 45]
Source of Income
Income from power
generation business
Rate of
exemption
100%
50%
25%
Income from such

projects
Full
Income from such

business
100%
Income from such

business
Period of
exemption
First 5 years
Next 3
years
Nest 2 years
5 years
from the
date of
commercial
production
First 2 years
50%
Next 2
years
25%
Next 1 year
100%
First 3 years
50%
Next 3
years
25%
Next 4
years
74

Source of Income
No.
12 Cinema hall or Cineplex set Income derived
up in Dhaka and Chittagong from such cinema
divisions (excluding
hall or Cineplex
and Khagrachari districts)
starting commercial
exhibition between 1 July
2012 and 30 June 2019
Para 44]
13 Cinema hall or Cineplex set
up in Rajshashi, Khulna,
Sylhet, Barisal and Rangpur
divisions and Bandarban,
Rangamati and Khagrachari
districts starting
commercial exhibition
between 1 July 2012 and
30 June 2019
Para 44]
14 Software development
or Nationwide
Telecommunication
Transmission Network
(NTTN) or Information
Technology Enabled
Services (ITES) business
Para 33]
15 Business of corn or maize
or sugar beet production
Para 46]
16 Export business
All except company not
registered in Bangladesh
Not enjoying any other
exemption or reduction
in tax rate
Para 28]
Rate of
exemption
100%
Period of
exemption
First 2 years
50%
Next 2
years
25%
Next 1 year
100%
First 3 years
50%
Next 3
years
25%
Next 4
years
Income from such

business
Full
1 July, 2008
to 30 June,
2024
Income from such

business
50%
Not
specified
Income from
business of export
50%
Not
specified
Income derived
from such cinema
hall or Cineplex
75

Source of Income
No.
Income from such
17 Handicraft export
business
business
Para 35]
Rate of
exemption
Full
Period of
exemption
1 July, 2008
to 30 June,
2019
Income from such

18 Small and medium
enterprise (SME) engaged business
in production of goods
Maximum annual
turnover BDT 30 Lakh
Para 39]
Full
Not
specified
19 Companies investing in
Bangladesh under any bilateral treaty / contract
between Bangladesh
Government and any
foreign Government or
investment organization
established by any foreign
Government
[SRO 32 - AIN / IT / 1990]
Income from such

company
Full
Period
specified in
the treaty /
contract
20 Company
Para 47]
Income donated to
funds established
under Trust of
Prime Ministers
Education
Assistance Act,
2012)
21 NGO registered with NGO

Affairs Bureau
Para 1A]
Operation of micro
credit
Upto lower
of
20% of
income
of the
company
8 crore
Full
Not
specified
Not
specified
76

Source of Income
No.
Income from micro22 Voluntary organizations
and NGO registered under credit operation
Societies Registration Act,
1860, Trusts Act, 1882 or
Voluntary Social Welfare
Agencies (Registration and
Control) Ordinance, 1961
[SRO 283 AIN / IT /
2002]
Rate of
exemption
Full
Period of
exemption
Not
specified
23 Religious or charitable
institution
Para 2]
Voluntary
contribution
applicable to
religious and
charitable purpose
Full
Not
specified
24 Trust or other legal

obligation held for
religious or charitable
purpose
Para 1]
Income from house

property
Full /
proportion
applied or
set apart
for such
religious or
charitable
purpose
Not
specified
25 Trustee
Para 6]
Income on behalf
of a recognized
provident
fund, approved
superannuation fund,
approved pension
fund, approved
gratuity fund
Full
Not
specified
26 Commercial and trade

All income except
association, commercial and income from
trade federation
interest and income
from business
[SRO 210 AIN / IT / 2013]
Full
Not
specified
77

Source of Income
No.
27 Co-operative society
Income from
[Section 47]
business of
agricultural or rural
credit; cottage
industry; marketing
of agricultural
produce of its
members; purchase
of agricultural
implements, seeds,
livestock or other
articles intended
for agriculture for
the purpose of
supplying them to
its members; such
processing of the
agricultural produce
of its members as is
ordinarily employed
by a cultivator
to render the
agricultural produce
marketable
Income from
letting of godowns
or warehouse for
the purpose of
storage, processing
or facilitating
the marketing
of commodities
belonging or meant
for sale to its
members
28 Private agricultural college All income
or private agricultural
university
Para 37]
Rate of
exemption
Full
Period of
exemption
Not
specified
Full
Not
specified
78

Source of Income
No.
All income except
29 Educational institution
interest and
Enlisted for Monthly
dividend
Pay Order (MPO) of the
Government
Rate of
exemption
Full
Period of
exemption
Not
specified
All income except

interest and
dividend
Full
Not
specified
31 Local Government
Para 3]
All income
Full
Not
specified
32 Partner of a firm
Para 18]
Share of capital
gain on which tax
has already been
paid
Full
Not
specified
Following the curriculum

approved by the
Government
Governed by a
body formed as per
Government rules and
regulations
Para 52]
30 Public university
Professional institute
established under
any law and run by
professional body of
Chartered Accountants
or Cost and Management
Accountants or
Chartered Secretaries
Para 53]
79

Source of Income
Rate of
No.
exemption
Full
33 Individual earning income Special allowance,
from salary
benefits or
[6th Schedule, Part A]
perquisites granted
for official purpose
[Para 5]
Pension
Full
[Para 8]
Gratuity
Upto BDT 2
[Para 20]
crore 50 lakh
Lower of
Interest credited
Actual
on accumulated
interest
balance of
credited
recognized
Interest at
provident fund
14,5%
[Para 25]
Full
Payment form
provident fund as
per Provident Funds
Act, 1925
[Para 21]
Full
Payment from
recognized
provident fund
[Para 21]
Full
Payment from
approved
superannuation
fund
[Para 21]
Full
Payment
from Workers
participation fund
established under
Bangladesh Labour
Act, 2006
[Para 21]
Full
Foreign remittance
34 Individual Bangladeshi
brought in
Citizen
Bangladesh as per
existing laws
Para 48]
Period of
exemption
Not
specified
Not
Specified
Not
specified
Not
specified
Not
specified
Not
specified
Not
specified
Not
specified
Not
specified
80

No.
35 Individual whose only
source of income is
agriculture
Para 29]
36 Indigenous Hillman of
Rangamati, Bandarban and
Khagrachari districts
Para 27]
Rate of
exemption
BDT 2 lakh
Period of
exemption
Not
specified
Full
Not
specified
37 Foreign faculty members, Salaries and

allowances
teaching, research or
library staff members,
administrators, officers,
experts, technicians,
visiting personnel of Asian
University for Women
[SRO 17 - AIN / IT / 2009]
Full
Not
specified
38 Government employee
[SRO 198 AIN / IT /
2015]
Full
Not
specified
Full
Not
specified
Full
Not
specified
39 Government employee
[SRO 245 ACT / IT /
2001]
40 Employees of Government
organization, local
authority, autonomous or
semi-autonomous body
including the units or
enterprises controlled by it
Para 26]
Source of Income
Agricultural income
Income from
economic activities
undertaken in such
districts
All benefits and

allowances except
for basic salary,
festival bonus and
bonus
Monetary award
received for
outstanding
contribution
towards
Government
Amount received
on voluntary
retirement
81

No.
41 Chief justice, judges of
Appellate Division of
Bangladesh supreme court,
judges of High Court
Division
[SRO 227 AIN / IT /
2011]
42 Prime minister, Speaker,
Minister, Deputy Speaker,
State Minister, Deputy
Minister and Advisor having
Ministerial status and
Members of Parliament
[SRO 226 AIN / IT /
2011]
43 Expatriates working in
private power generation
companies (except
starting commercial
production within 31
December, 2014
[SRO 211 AIN / IT /
2013]
44 Expatriates working
in private coal based
electricity generation
companies signing contract
within 30 June, 2020
[SRO 213 AIN / IT /
2013]
Rate of
exemption
Full
Period of
exemption
Not
specified
All benefits and

allowances except
for basic salary or
remuneration
Full
Not
specified
Income from
working in private
power generation
companies
(except coal
based electricity
generation
companies)
Full
3 years
from the
date of
arrival in
Bangladesh
Income from
working in
private coal
based electricity
generation
company
Full
3 years
from the
date of
arrival in
Bangladesh
Salary and
Dhaka Elevated Expressway allowances from
the project
PPP project
[SRO 290 AIN / IT /
2012]
Full
3 years
from 13
August,
2012
Source of Income
All benefits and
allowances except
for basic salary
82

No.
International Committee
of Red Cross (ICRC) in
Bangladesh
[SRO 80 AIN / IT / 2010]
47 Expatriate technician
working in industrial
undertakings having
approval from BEPZA
within 22 March, 2009
and starting commercial
production within 2012
[SRO 28 / AIN / IT / 2010]
48 Expatriates working as
technician, professionals,
scientists, senior
administration staff,
advisor and consultant
in Local Development
Network Institutions under
Aga Khan Development
Network
[SRO 101 AIN / IT /
2003]
49 Expatriates working
in foreign funded
development projects
having bi-lateral treaty
between Bangladesh
Government and the
foreign Government
or foreign funding
organization
[SRO 207 AIN / IT /
1997]
Source of Income
Salaries and
remuneration
provided by
International
Committee of Red
Cross (ICRC) from
Bangladesh or
abroad
Salaries and
remunerations
Rate of
exemption
Full
Period of
exemption
Not
specified
Full
Earlier of
3 years from
the date
of arrival in
Bangladesh
5 years from
companys
commercial
production
Not
specified
Income from salary
Full
Salaries and
allowances received
from the foreign
Government or
the foreign funded
development
project
Full
Not
specified
83

No.
50 Ambassador, high
commissioner, envoy,
minister, charge daffairs,
commissioner, counsellor,
consul de carrier, secretary,
advisor or attache of an
embassy, high commission,
legation or commission of a
foreign State
Source of Income
Remuneration
from such state
for service in such
capacity
Rate of
exemption
Full
Period of
exemption
Not
specified
Full
Not
specified
Full
Not
specified
Full
Not
specified
[6th Schedule, Part A, Para 7]
51 Trade commissioner
or other official
representative of a foreign
state in Bangladesh
[6th Schedule, Part A, Para 7]
52 Non-resident assessee
Para 43]
Official salary;
Provided that
corresponding official
of Bangladesh in such
country enjoys such
exemption
Capital gain from

transfer of stock
or shares of listed
company subject
to enjoying similar
exemption in
resident country
All
shareholders
except
for
53
Income arising
-- Companies defined in Section
from trading /
2(20)
transaction of
-- Firms defined in Section 2(32)
securities listed in
-- Sponsor shareholder or
any SEC approved
shareholder director of bank,
Stock Exchange
financial institution, merchant
bank, insurance company, leasing (excluding
company, portfolio management Government
company, stock dealer or stock
securities)
brokerage company
-- Shareholder (except sponsor
shareholder or shareholder
director) having 10% or more of
shares of total paid up capital of
a company / companies listed in
any stock exchange
-- Sponsor shareholder, director,
placement holder of a company
-- Sponsor or placement holder of a
mutual fund
[SRO 196 AIN/ IT / 2015]
84

Source of Income
No.
54 All assessee
Income from any
building situated
in areas other
Para 38]
than in City
Corporation,
Cantonment
Board, Tongi
Upazila,
Narayanganj
Paurashava,
Gazipur
Paurashava, and
any Paurashava
under Dhaka
District
Maximum 5
storied with at
least 10 flats
Constructed
between 1 July,
2009 and 30
June, 2014
55 All assessee
Dividend from a
company listed in
Para 11A]
Bangladesh
56 All assessee
Income from a
mutual fund or unit
Para 22A]
fund
57 All assessee
Interest on tax[6th Schedule, Part A,
free Government
Para 24]
security
58 All assessee
Income from wage
earners development
bond, US dollar
Para 24A]
development bond,
US dollar premium
bond, US dollar
investment bond,
Euro premium bond,
Euro investment
bond, Pound sterling
investment bond,
or Pound sterling
premium bond
Rate of
exemption
Full
Period of
exemption
10 years
from the
date of
completion
of
construction
BDT 25,000
Not
specified
BDT 25,000
Not
specified
Full
Not
specified
Full
Not
specified
85

Source of Income
No.
59 All assessee
Interest from
pensioners savings
Para 32A]
certificate or
wage earners bond
provided that the
limit of investment
is upto BDT 5 lakh
Income from
60 All assessee except Bank,
Insurance or any Financial investment in
zero coupon bond
Institutions
issued by any bank,
insurance, financial
Para 40]
institution or other
[SRO 203 AIN / IT /
institution approved
2005]
by Bangladesh Bank
and SEC
61 All assessee
Income from
[SRO 154 AIN / IT /
Bangladesh
1999]
Industrial
Development
Bond issued by
nationalized
commercial bank
Rate of
exemption
Full
Period of
exemption
Not
specified
Full
Not
specified
Upto BDT
25,000
Not
specified
62 All assessee
Income from
[SRO 66 AIN / IT / 2004] bond issued by
Government,
semi-Government
or autonomous
body engaged
in electricity
production and
supply
Upto BDT
25,000
Not
specified
Full
Not
specified
63 All assessee
[SRO 89 AIN/ IT / 2003]
Interest on savings
pension scheme
of Government
approved scheduled
bank
86

No.
64 All assessee except
company
Para 47]
65 All assessee
Para 49]
66 All assessee
Para 50]
67 All assessee
Para 50]
Source of Income
Income donated to
funds established
under Trust of
Prime Ministers
Education
Assistance Act,
2012)
Income donated
to any girls
school or girls
college approved
by Ministry of
Education
Income donated to
any Technical and
Vocational Training
Institute approved
by Ministry of
Education
Income donated
to any national
level research
and development
(R&D) institute
of agriculture,
science, technology
and industrial
development
Rate of
exemption
Upto lower
of
20% of
income
of the
assessee
BDT 1
crore
Full
Period of
exemption
Not
specified
Full
Not
specified
Full
Not
specified
Not
specified
37. Reduced rate of tax

The following table lists down the reduced tax rate benefit offered by the Government
to different types of assessees. It compiles the reduced tax rate benefit provided to
such assessees through Income Tax Ordinance, 1984 (ITO, 1984) and SROs issued by
the Government at different times.
87
Sl.
Rate of
Assessee / Applicable for
Source of Income
No.
tax
1 Companies registered under Yarn manufacturing, 15%
Companies Act, 1994
yarn dying, finishing,
[SRO 193 AIN / IT / 2015]
coning
Fabric
manufacturing,
fabric dying,
finishing, printing
Period
applicable
1 July, 2015
to 30 June,
2019
Manufacturing of jute
Industrial undertaking
goods
engaged in manufacturing
of jute goods
[SRO 194 AIN / IT / 2015]
15%
1 July, 2015
to 30 June,
2019
Publicly traded ship building Income from export

business
company registered under
Companies Act, 1994
[SRO 132 AIN / IT / 2013]
5%
Not specified
Income from export

Non-publicly traded ship
building company registered business
under Companies Act, 1994
[SRO 132 AIN / IT / 2013]
10%
Not specified
Income from such

Industries engaged in
business
production of freezer,
refrigerator, motorcycle and
air conditioner (including
production of small parts)
[SRO 186 AIN / IT / 2009]
[SRO 78 AIN / IT / 2010]
5%
12 years from
starting of
commercial
production
88
Sl.
Rate of
Source of Income
No.
tax
10%
6 Companies defined in
Income arising from
Section 2(20)
trading / transaction of
[SRO 196 AIN / IT / 2015] securities listed in any
SEC approved Stock
Exchange (excluding
Government securities)
Period
applicable
Not specified
Income from such

Private university, private
institutions
medical college, private
dental college, private
engineering college, private
college providing education
on information technology
[SRO 268 AIN / IT / 2010]
15%
Not specified
Autonomous public utility

All income except for
providers
capital gain
[SRO 158 AIN / IT / 2014]
25%
Not specified
All income
National level research
institute registered under
Trust Act, 1882 or Societies
Registration Act, 1860
[SRO 163 AIN / IT / 2014]
15%
Not specified
10
10%
Firms defined in Section
Income arising from
2(32)
[SRO 196 AIN / IT / 2015] securities listed in any
SEC approved Stock
Exchange (excluding
Not specified
89
Sl.
No.
11 Sponsor shareholder or
shareholder director of
bank, financial institution,
merchant bank, insurance
company, leasing company,
portfolio management
company, stock dealer or
stock brokerage company
[SRO 196 AIN / IT / 2015]
12 Shareholder (except
sponsor shareholder or
shareholder director) having
10% or more of shares of
total paid up capital of a
company / companies listed
in any stock exchange
[SRO 196 AIN / IT / 2015]
13 All assessee
[SRO 199 AIN / IT / 2015]
Source of Income
Income arising from
securities listed in any
SEC approved Stock
Exchange (excluding
Rate of
tax
5%
5%
Income arising from
securities listed in any
SEC approved Stock
Exchange (excluding
Production of
pelleted poultry
feed, production of
pelleted feed for
cattle, shrimp and
fish, production of
seeds, marketing
of locally produced
seeds, cattle firming,
dairy firming, frog
firming, horticulture,
floriculture, silk
tree plantation, bee
keeping, silk worm
firming, mushroom
firming
Period
applicable
Not specified
Not specified
Not specified
3% on
first
BDT 10
lakh
10% on
next
BDT 20
lakh
15% on
rest
of the
income
38. Tax rebate

The following table lists down the tax rebate benefit offered by the Government
to different types of assessees. It compiles the tax rebate benefit provided to such
assessees through Income Tax Ordinance, 1984 (ITO, 1984), Finance Act, 2015 and
SROs issued by the Government at different times.
90
Sl.
Assessee / Applicable for Conditions
No.
1 Non-publicly traded company Transfer of minimum
[Finance Act, 2015]
20% share of paid up
capital through IPO
2 Non-publicly traded mobile
Transfer of 20%
phone operator
share of paid up
[Finance Act, 2015]
capital through IPO
If commercial
3 New manufacturing
operation starts
industries established in
within 1 July, 2014
any area of Bangladesh
30 June, 2019
except for the areas within
the jurisdiction of any City
If any organization
Corporation
with existing
Registered under
commercial
Companies Act, 1994
operation within
Not enjoying tax holiday,
the jurisdiction of
tax exemption or reduced any city corporation
tax rate
area shifts the
Not publicly traded
entire operation
company
outside city
Subject to fulfilling certain corporation area
conditions
within 1 July, 2014
[SRO 185 AIN / IT /
30 June, 2019
2014]
If commercial
operation started
before 1 July, 2014
Company donating for

the purpose of corporate
social responsibility
conditions
[SRO 229 AIN / IT / 2011]
[SRO 223 AIN / IT / 2012]
[SRO 186 AIN / IT / 2014]
Donation to be
made in areas as
specified by the
Government in the
relevant SROs
Rate of
rebate
10% on tax
Period
applicable
In the year
of transfer
10% on tax
In the year
of transfer
20% on tax
10 years
20% on tax
10 Years
10% on tax
Upto 30
June, 2019
10% on
Not
expenditure specified
Maximum
limit of
expenditure:
Lower of
20% of
total
income
BDT 12
crore
91
Sl.
No.
5 Individual assessee
owning cottage industry
in less developed or least
developed area
[Finance Act, 2015]
Rate of
rebate
5% on
If production
volume exceeds 15% income
but does not exceed
25% as compared
with preceding year
Period
applicable
Not
specified
10% on
If production
volume exceeds 25% income
as compared with
preceding year
Not
specified
Conditions
Partner of a firm
[6th Schedule, Part B, Para
16]
Partnership income
Not
Average
specified
rate on
partnership
income
Individual assessee
[Section 44(2)(b)]
Investments to
be made in areas
specified in 6th
Schedule Part B,
ITO, 1984
Maximum limit
of investment
allowance is lower
of:
BDT 1 crore 50
lakh
30% of total
income excluding
employers
contribution
to recognized
provident fund
(RPF), interest
on accumulated
balance of RPF
and income under
Section 82C
Not
15% on
admissible specified
investment
allowance
92
39.Conditions for tax exemption for newly established

industrial undertaking and newly established physical
infrastructure facility

[Section 46B, 46C]
Newly established industrial undertakings and newly established physical

infrastructure facilities (set up between 1 July, 2011 & 30 June, 2019) has to fulfil
the following conditions to enjoy the tax exemption (as stated in Point 1, 2 & 3 of
Tax Exemption table ) offered
XX
The industrial undertaking or physical facility is owned and managed either by

(a) a body corporate established by or under any law and with head office in
Bangladesh or (b) a company defined under Companies Act 1994 with registered
office in Bangladesh and having a subscribed & paid up capital of not less than
BDT 2,000,000 on the date of commencement of commercial production
XX
30% of the exempted income is invested in the said undertaking or facility or in

any new industrial undertaking or physical facility during the period of exemption
or within the following year of exemption
XX
10% of the exempted income is invested each year in the purchase of shares of
a listed company
XX
The industrial undertaking or physical facility is not formed by splitting up,

reconstruction or reconstitution of an existing undertaking or facility or transfer
of machinery and plant from an existing undertaking or facility
XX
The industrial undertaking is not engaged in purchase or sale of goods at a higher

/ lower price than market price with another industrial undertaking or company
having common sponsor directors
XX
The income, profits and gains of the industrial undertaking or physical facility
shall be computed in the same manner applicable for income from business or
profession. Such income, profits and gains will be computed separately from
other income, profits and gains. Any loss sustained will be carried forward to be
set-off against income, profits and gains of the same industrial undertaking or
physical facility
XX
The industrial undertaking or physical facility obtains approval for such tax
exemption in the prescribed manner.
40. Investment allowances eligible for tax credit

[Sixth Schedule, Part B]
The following table summarizes the areas, investment in which will be eligible for
tax credit as per Sixth Schedule, Part B.
93
Sl.
Particulars
Reference
Life insurance premium paid by an individual for

insurance for the life of self, spouse or a minor child upto
10% of actual sum assured
Para - 1
Life insurance premium paid by a Hindu undivided family

for the life of a male member or his wife
Para - 2
Contribution deducted from salary paid by Government to

secure deferred annuity or provision for wife or children
Para - 3
Contribution to provident fund under Provident Fund Act, 1925
Para - 4
Employers and employees contribution to a recognized

provident fund
Para - 5
Annual contribution to approved superannuation fund
Para - 6
Investment in Board approved

Savings certificate and instrument
Unit certificates and mutual fund certificates issued
by any financial institution or ICB and its subsidiaries
Government securities
Shares of investment companies
Not applicable for company
Para - 10
Deposit pension scheme upto BDT 60,000
Para - 11
Donation to a charitable hospital, subject to certain

conditions
Para 11A
10
Donation to a charitable organization set up for welfare

of retarded people, subject to certain conditions
Para 11B
11
Zakat paid to Zakat Fund; Donation or contribution to

a charitable fund established by or under Zakat Fund
Ordinance, 1982
Para 13
12
Sum paid to benevolent fund or premium paid to group

insurance scheme
Para 17
13
Donation to any socio-economic or cultural development

institution established by Aga Khan Development Network
Para - 21
14
Donation to Government approved philanthropic or

educational institution
Para - 22
94
Sl.
Particulars
Reference
15
Sum invested by an individual for purchase of one

computer or one laptop
Para 23
16
Donation to a national level institution set-up in memory

of liberation war
Para 24
17
Donation to a national level institution set-up in memory

of the Father of the Nation
Para 25
18
Sum invested by an individual in acquisition of any stocks

or shares of a company, mutual fund or debenture listed
with any stock exchange
Para 27
19
Sum invested by an individual for purchase of Bangladesh

Government Treasury Bond
Para - 28
41. CSR activities eligible for tax credit

[SRO 229 AIN / IT / 2011, SRO 223 AIN / IT / 2012, SRO 186 AIN / IT / 2014]
The CSR activities for which a company may avail tax rebate facilities are listed
below
XX
Donation made to natural disaster affected people through Government

organization
XX
Donations made to institution engaged in establishment and maintenance of old

home
XX
Donations made to social institution engaged in the welfare of mentally or

physically disabled people
XX
Donations to organizations engaged in educating street children
XX
Donations to organizations engaged in projects on accommodation for the slum

dwellers
XX
Donations to social institutions engaged in campaign for women rights and against
dowry system
XX
Donations made to institution engaged in maintenance and rehabilitation of

orphan/rootless children
XX
Donations made to institutions engaged in research on liberation war, expansion

of the consciousness of liberation war and the act of honorable living of the
freedom fighters
XX
Donations made to institutions engaged in sanitation and sewerage work at Chittagong

Hill Districts, char areas and areas surrounding breaking up of banks of river
95
XX
Donation made to institution engaged in medicating cleft leap, cataract, cancer

and leprosy
XX
Donation made to person or institution engaged in treatment of acid affected

people
XX
Donation to specialized hospital like cancer hospital, lever hospital, kidney

hospital, thalassemia hospital, eye hospital and cardiology hospital for free
treatment to poor patient
XX
Donation to public universities
XX
Donation to Government approved educational institution for giving stipend

to insolvent meritorious freedom fighters children with a view to providing
technical or vocational education to them
XX
Any assistance made to schools and colleges under MPO for improving computer
and English education
XX
Donations to organizations engaged in providing technical and vocational training

to unskilled or semi-skilled labor for export of human resources
XX
Donations made to national sports institutions engaged in the development of

infrastructure and training at national level
XX
Any contribution to museum made for freedom fighter at national level
XX
Any contribution to organization engaged in the preservation of the memories of

the Father of the Nation
XX
Any donation to any social welfare organization, NGO or not for profit organization
engaged with awareness, treatment or rehabilitation for HIV, AIDS and the drug
addicted people
XX
Any donation to any social welfare organization, NGO or not for profit organization
engaged with rehabilitation for children or women rescued from overseas
trafficking
XX
Any donation to any Government approved fund for national disaster or

tournament or national carnival
A company cannot charge such CSR expenditure as expense in the profit or loss
account. Moreover such company has to fulfil the following conditions to claim
rebate against the above mentioned CSR activities
XX
Must pay salaries and allowances to its workers regularly and must have waste
treatment plant if it is involved with the production of industrial goods
XX
Must pay income tax, VAT and duty timely and must repay institutional loans
XX
Can only donate money to the institutions recognized by the Government for the
purpose of CSR
XX
Must fulfil all rules as per Bangladesh Labour Act, 2006
96
42. Special tax treatment

[Section 19BBBBB, 19C]
Special tax treatment benefit has been given to persons who have income with
unexplained source. If such persons invest in the following areas and pay tax at
certain rates before the assessment of the relevant year, the source of invested
amount would be deemed explained.
XX
Investment in residential building and apartment [Section 19BBBBB]
XX
Investment in purchase of bond under Bangladesh Infrastructure Finance Bond

[Section 19C]
43. Avoidance of Double Taxation

[Section 144, 145]
The Government of Bangladesh may enter into an agreement with the Government
of other countries for the avoidance of double taxation and prevention of fiscal
evasion with respect to taxes on income leviable under the ITO, 1984 and also under
corresponding law of such other countries. Under the DTA agreement, each dominion
determines the total income of an assessee in the ordinary way under its own laws.
However each country is entitled to retain tax in respect of the source of income
or categories of transactions which are specified in the agreement, at the rates
embodied in the agreement.
At present, Government of Bangladesh has entered into agreement for the avoidance
of double taxation with the following 32 countries
Belarus
Belgium
Canada
China
Denmark
France
Germany
India
Indonesia
Italy
Japan
Malaysia
Mauritius
Myanmar
Netherlands
Norway
Pakistan
Philippines
Poland
Romania
Saudi Arabia
Singapore
South Korea
Sri Lanka
Sweden
Switzerland
Thailand
Turkey
UAE
UK
USA
Vietnam
97
TRANSFER PRICING
44. Transfer pricing

Transfer pricing is increasingly influencing significant changes in tax legislation

around the world. Transfer pricing refers to the prices charged between related
parties in different tax jurisdictions for goods, services, assets, and the right to
use intangibles, interest, guarantee fees and factoring fees. Transfer prices must
be determined following the arms length principle which requires that the pricing
and the related terms and conditions set between associated entities should be
consistent to the prices and terms and conditions that would have been charged
if the goods / services had been provided / received from an independent party.
If the transfer prices are set in a manner that is inconsistent with the arms length
principle, tax authorities raise the concerns of the possibility of profit shifting.
In Bangladesh, regulations of transfer pricing enacted from the Fiscal Year 2012-2013.
44.1 Procedure from record keeping to submission of return
Person having international transactions with
associated enterprise
Person maintains records of
transactions in prescribed manner
Transactions are at
arms length basis
Yes
No
Person calculates adjustment

for transfer price on the
basis of arms length price
Submits (a) statement of international

transactions and (b) report from a Chartered
Accountant (if value of international
transaction exceed BDT 3 crore)
Submits income tax return
98
44.2 Assessment procedure

DCT receives the return
along with other documents
DCT checks the required

documents are submitted
with the return
Intl transactions
are on arms
length price
No
Yes
Transfer pricing adjustment
is not required
DCT completes the

assessment
DCT refers the return to TPO
TPO computes the arms length

price using appropriate method
and sends back to DCT
DCT makes adjustment of

transfer pricing on the basis of
computation of TPO
44.3 Computation of arms length price

[Section - 107C]
The arms length price in relation to international transaction shall be determined

by applying any of the following method
i. Comparable uncontrolled price method

According to comparable uncontrolled price method, price charged in

an international transaction is compared with price in an uncontrolled
transaction. Then the international transactions are adjusted with the
difference to get arms length price.
ii. Resale price method

Under resale price method, normal gross margin is subtracted from the price
that would have been obtained from an independent enterprise. Then some
99
other adjustment for custom duty, risk involved, asset employed, time gap,
accounting practices etc. are made to the price of international transaction
to determine the arms length price.
iii. Cost plus method

Under cost plus method, cost base for international transaction is determined
considering direct and indirect cost incurred for supply of goods or provision
of service. Then comparable profit markup after adjustment of certain factors
is added to the cost base to determine the arms length price.
iv. Profit split method

Under the profit split method, the portion of common profit that would be
expected to be earned from comparable uncontrolled transactions is allocated
to controlled transactions of the participating enterprises. Each of the associated
enterprise is allocated a basic return based on the basic functions they perform
as determined with reference to the market returns earned by independent
enterprise in similar transactions. The basic return does not account for the use
of unique assets of the associated enterprises. The residual profit attributable to
the unique asset is calculated by deducting the sum of basic returns allocated
to associated enterprises from the combined profit. Then the residual profit is
allocated to the associated enterprises based on the relative contribution. Such
allocated profit is considered the arms length price.
v. Transactional net margin method

Under the net profit margin method, net profit margin is computed in
respect of international transactions, both in associated enterprises and in
independent enterprises regarding the same appropriate base such as costs,
sales or assets. Then appropriate adjustment is given to the net profit margin
earned by an independent enterprise to adjust the differences. Finally, the
adjusted net profit margin is applied to the appropriate bases to arrive at the
arms length transaction.
vi. Other appropriate method

Any other appropriate method may be used to determine the arms length
price which yields consistent result with the arms length price.
100
44.4 Reference to Transfer Pricing Officer

[Section - 107D]
With prior approval of the Board, DCT may refer to Transfer Pricing Officer (TPO)
for determination of arms length price of any international transaction. TPO
shall serve the assessee a notice to submit relevant evidence in relation to the
international transaction in question. Considering all evidence produced to
him and other relevant information gathered by him, the TPO shall determine
arms length price and shall send a copy of his order to the DCT. Then the DCT
shall compute the total income of the assessee considering arms length price
computed by the TPO in relation to international transaction.
44.5 Maintenance and keeping of information, documents and records

[Section - 107E; Rule - 73]
Every person having international transaction shall keep and maintain the
following information, documents and records provided that the aggregate value
of international transactions exceeds BDT 3 crore in the particular income year
XX
Ownership profile including organizational structure, name, location, legal

status, etc.
XX
Business profile of the group including line of business, industry dynamics,

market and economic environment etc.
XX
Brief business profile of each member of the group
XX
Details of all transactions with the associated enterprises
XX
Manner of choosing tested party including rationale for choice
XX
Information on method chosen for determining arms length price
44.6 Statement of international transaction to be submitted

[Section - 107EE; Rule - 75A]
Every person entering into an international transaction shall furnish statement of

international transactions along with the return of income.
44.7 Report from an accountant to be furnished

[Section - 107F; Rule - 75]
Every person entering into international transactions with aggregate value

exceeding BDT 3 crore during an income year shall furnish a report from a
Chartered Accountant or Cost and Management Accountant.
101
Offences, penalties
& punishments
45. Offences, penalties & punishments

The following table summarizes the various offences and related penalties and
punishments under ITO, 1984.
Sl. Offences
1
Failure to deduct/collect tax

at source
Failure to deposit deducted/
collected tax into national
exchequer
Failure to give notice to
the DCT regarding the
discontinuance of business
Failure to keep, maintain
or furnish information,
documents or records to the
Deputy Commissioner of Taxes
as per Section 107E
Failure to comply with the
notice or requisition under
Section 107C regarding
computation of arms length
price
Failure to comply with the
provision of Section - 107EE
regarding submission of
statement of international
transactions
Failure to furnish report from
a Chartered Accountant under
Section 107F
Penalties & Punishments
Reference
2% of the amount of tax to

be deducted, collected or
deposited per month
Sec - 57
Maximum the amount of tax

subsequently assessed
Sec 89(3)
Maximum 1% of the value of

each international transaction
Sec - 107G

Sec - 107H

Sec - 107HH
Maximum BDT 300,000
Sec - 107I
102
Sl. Offences
7
Failure to maintain accounts

in the prescribed manner as
per Section 35(2) (assessee
does not have income from
house property)
Failure to maintain accounts

in the prescribed manner as
per Section 35(2) (assessee
has income from house
property)
Failure to file return under
Section - 75,77, 89(2), 91(3),
93(1), 75A
Reference
Maximum 1.5 times of tax

liability
Maximum BDT 100, where the
total income does not exceed
the maximum amount on which
tax is not chargeable
Higher of (a) 50% of taxes
payable on house property
income or (b) BDT 50,000
Sec 123
Sec 124
Higher of (a) 10% of last
assessed tax or (b) BDT 1,000
For continuing default: BDT 50
for every day
Provided that maximum penalty
for an individual assessee not
previously assessed: BDT 5,000
Maximum penalty for an
individual assessee previously
assessed: Higher of (a) 50% of
last assessed tax or (b) BDT
1,000
BDT 500
Sec 124
For continuing default: BDT 250
per month
10 Failure to furnish certificate,

statement, accounts,
information or TIN certificate
required under Section - 58,
108, 109, 110 and 184C
11 Failure to furnish information BDT 25,000
required under Section 113 For continuing default: BDT 500
per day
12 Use of fake TIN or TIN of
Maximum BDT20,000
another person
13 Failure to verify the
Maximum BDT 50,000
authenticity of TIN
14 Failure to pay advance tax
Maximum the amount of
shortfall
15 Non-compliance with any
Maximum the amount of tax
notice under Section 79,80, liability
83(1) and 83(2)
Sec 123
Sec 124
Sec 124A
Sec 124AA
Sec 125
Sec 126
103
Sl. Offences
16 Failure to pay tax on the basis Maximum 25% of of unpaid tax

of return under Section 74
17 Concealment of income
15% of the tax evasion
If concealment detected after
1 year: Additional 15% for each
preceding year
Reference
Sec 127
Sec 128
18 Incorrect or false audit report Minimum: BDT 50,000

by Chartered Accountant
Maximum: BDT 200,000
Sec 129A
19 Furnishing fake audit report
BDT 100,000
Sec 129B
20 Default in payment of tax

21 Non-compliance of certain
obligations under Section 164
Maximum amount of arrear tax

Imprisonment upto 1 year or
fine or both
Sec 137
Sec 164
22 False statement in
verification
Imprisonment of 3 months to 3
years or fine or both
Sec 165
23 Use of fake TIN or TIN of

another person
24 Furnishing fake audit report

fine upto BDT 50,000 or both
years or fine upto BDT 100,000
or both
fine or both
years or fine upto BDT 500,000
or both
Sec 165A
25 Obstruction of income tax

authority
26 Unauthorized employment of
a non-Bangladeshi citizen
Sec 165AA
Sec 165B
Sec 165C
27 Concealment of income
years or fine or both
Sec 166
28 Disposal of property to
prevent attachment
Imprisonment upto 5 years or

fine or both
Sec 167
29 Disclosure of protected
information
Imprisonment upto 6 months or

fine or both
Sec 168
104
VALUE ADDED TAX
SUMMARY OF
VALUE ADDED TAX
105
106
46. Taxes imposed under VAT Act, 1991

Three different types of taxes are imposed under the provisions of the Value Added
Tax Act, 1991.
XX
Value Added Tax at 15% on value addition, to be paid by importers, manufacturers,

and service providers having minimum turnover of BDT 80 lakh. [Section 3]
XX
Turnover Tax at 3% to be paid by persons and organizations having turnover

amount not exceeding BDT 80 lakh and who is not required to be registered for
VAT under Section - 15. [Section 8; Rule 4]
XX
Supplementary Duty at different rates ranging from 10% to 500% on luxurious,

non-essential and socially undesirable goods. [Section 7]
47. Goods and services chargeable to VAT

[Section - 3]
According to the Section - 3(1) of the Value Added Tax Act, 1991, 15% VAT is imposed
on following goods and services
XX
All goods imported or supplied in Bangladesh, except for those stated in the First
Schedule of the VAT Act, 1991
XX
All services provided or imported in Bangladesh, except for those stated in the
Second Schedule of the VAT Act, 1991
However zero rate tax shall be imposed on following goods and services
XX
Any goods or services exported or deemed to have been exported from Bangladesh
XX
Food and other things supplied in accordance with Section - 24 of the Customs
Act, 1969 to any transport leaving Bangladesh, for consumption in the transport
outside Bangladesh
Provided that provisions of zero rate tax shall not be applicable in the following
cases
XX
Any goods intended to be re-imported into Bangladesh
XX
oods that have been presented for export in accordance with Section - 131 of
G
the Customs Act, 1969 but have not been exported within 30 days of submission
of the bill of export or such extended time(if any) allowed by the Commissioner.
107
48. Persons responsible to pay the VAT

[Section 3]
According to Section - 3(3) of the Value Added Tax Act, 1991, VAT shall paid by
XX
In the case of imported goods, the importer of the goods imported at import
stage
XX
In the case of goods manufactured or produced in Bangladesh, the supplier at

production or manufacture stage
XX
In the case of services, the provider of services
XX
In the case of service providing from outside the territory of Bangladesh, service
receiver
XX
In other cases, the supplier and the receiver of service
49. VAT deduction at source

[Rule 18A]
Following persons are responsible to deduct VAT at source

XX
Government organization
XX
Semi-Government organization
XX
Autonomous organization
XX
NGO
XX
Bank
XX
Insurance
XX
Financial Institutions
XX
Limited company
XX
Educational Institutions
XX
Any enterprise having annual turnover of more than BDT 1 crore
50. Deposit of deducted VAT

Deducted VAT amount shall have to be deposited to Government exchequer with

following area code
108
Commissionerate Areas
Treasury Challan Financial Code
Large Tax-payer Unit LTU)
1/1133/0006/0311
Dhaka (North)
1/1133/0015/0311
Dhaka (South)
1/1133/0010/0311
Dhaka (East)
1/1133/0030/0311
Dhaka (West)
1/1133/0035/0311
Chittagong
1/1133/0025/0311
Comilla
1/1133/0040/0311
Sylhet
1/1133/0018/0311
Rajshahi
1/1133/0020/0311
Rangpur
1/1133/0045/0311
Jessore
1/1133/0005/0311
Khulna
1/1133/0001/0311
51. Scope of VAT and specified rates

The following table summarizes applicable VAT rates on various services along with
areas where VAT Deduction at Sources (VDS) are applicable
Sl.
1
Head
No.
S 001
S 002
Service
Code
Service provider
Rate Applicability of
of VAT VDS
S 001.10
Hotels including club
15%
N/A
S 001.20
Restaurant (including club)

with air condition
15%
N/A
Restaurant (including club)

without air condition
7.5%
N/A
Decorators and caterers
15%
VDS Applicable
S 002.00
109
Sl.
3
Head
No.
S 003
Service
Code
Service provider
of VAT VDS
S 003.10
Motor garage & workshop
7.5%
VDS Applicable
S 003.20
Dockyard
7.5%
VDS Applicable
S 004
S 004.00
S 005
6
7
S 007
S 008
S
S
S
S
8
9
S 009
S 010
S 009.00
S 010.10
005.10
005.20
007.00
008.10
S 010.20
10
S 011
S 011.10
S 011.20
S 011.30
S 011.40
11
S 012
12
13
14
S 013
S 014
S 015
S 012.10
S 012.11
S 012.12
S 012.13
S 012.14
S 012.20
S 013.00
S 014.00
S 015.10
S 015.20
Construction works / firms

(Builders)
Warehouse
Port for import or export
Advertisement organizations
Printing press
5.5%
VDS Applicable
15%
15%
15%
15%
N/A
N/A
VDS Applicable
VDS Applicable
Auction
Land development organization
Building construction organization
15%
3%
VDS Applicable
VDS Applicable
VDS Applicable
1-1,100 sq. feet
1.5%
1,101-1,600 sq. feet
2.5%
Over 1,600 sq. feet

Video cassette shop
Video games shop
Video, audio recording shop
Video and audio CD rent
provider shop
Telephone service provider
Tele-printer service provider
Telex service provider
Fax service provider
Internet service provider
Sim card distributors
Automated laundry
Indenting service
Freight forwarders
Clearing and forwarding
agent
4.5%
15%
15%
15%
15%
N/A
N/A
N/A
N/A
15%
15%
15%
15%
15%
15%
15%
15%
15%
15%
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
110
Sl.
Head
No.
Service
Code
15
16
17
18
S 017
S 018
S 020
S 021
S 017.00
S 018.00
S 020.00
S 021.00
19
20
S 022
S 023
S 022.00
S 023.10
21
S 024
S 023.20
S 024.00
Service provider
of VAT VDS
22
23
S 025
S 026
S 025.00
S 026.00
24
25
S 027
S 028
S 027.00
S 028.00
26
27
S 030
S 031
S 030.00
S 031.00
28
S 032
S 032.00
29
30
31
S 033
S 034
S 035
S 033.00
S 034.00
S 035.00
Community center
Film studio
Survey sangstha
Plants or capital machineries rent provider
Sweet shop
Cinema hall or film distributor
Film producer
Sales center of furniture - At
the time of production
Sales center of furniture At the time of marketing,
subject to treasury challan
for 6% at production stage
WASA
Goldsmith, silversmith and
gold & silver trader
Insurance company
Courier & express mail
service
Beauty parlor
Repairing or servicing of
taxable goods
Consultancy firm and supervisory firm
Lessee
Audit and accounting firm
Shipping agent
32
S 036
S 036.10
Air-conditioned Bus Service
15%
N/A
S 036.20
Air-conditioned launch
service
15%
N/A
S 036.30
Air-conditioned railway
service
15%
N/A
S 037.00
Procurement provider
5%
VDS Applicable
33
S 037
15%
15%
15%
15%
N/A
N/A
VDS Applicable
VDS Applicable
15%
15%
N/A
N/A
15%
6%
N/A
VDS Applicable
4%
VDS Applicable
15%
5%
N/A
N/A
15%
15%
N/A
VDS Applicable
15%
15%
N/A
VDS Applicable
15%
VDS Applicable
15%
15%
15%
VDS Applicable
VDS Applicable
N/A
111
Sl.
Head
No.
Service
Code
34
S 038
S 038.00
Organizer of cultural program with foreign performers
15%
N/A
35
S 039
S 039.10
Satellite cable operators
15%
N/A
S 039.20
Satellite channel distributors
15%
N/A
Service provider
of VAT VDS
36
S 040
S 040.00
Security service provider
15%
VDS Applicable
37
S 042
S 042.00
Automated saw-machine
15%
N/A
38
S 045
S 045.00
Legal advisors
15%
VDS Applicable
39
S 046
S 046.00
Health club and fitness

center
15%
N/A
40
S 047
S 047.00
Sports organizer
15%
N/A
41
S 048
S 048.00
Transport contractor - For

carrying petrol and related
goods
2.25%
VDS Applicable
Transport contractor Other goods
7.5%
VDS Applicable
42
S 049
S 049.00
Transport fare or rent-a-car
15%
VDS Applicable
43
S 050
S 050.10
Architect, interior designer

or interior decorator
15%
VDS Applicable
S 050.20
Graphics designer
15%
VDS Applicable
44
S 051
S 051.00
Engineering firms
15%
VDS Applicable
45
S 052
S 052.00
Sound and lighting instruments rent providers
15%
VDS Applicable
46
S 053
S 053.00
Present at board meeting
15%
VDS Applicable
47
S 054
S 054.00
Advertisement with satellite channel
15%
VDS Applicable
48
S 056
S 056.00
Banking and non-banking

service provider
15%
N/A
49
S 057
S 057.00
Electricity supplier
5%
N/A
50
S 058
S 058.00
Chartered airplane or helicopter rent providers
15%
VDS Applicable
112
Sl.
Head
No.
Service
Code
Service provider
51
S 059
S 059.00
Glass sheet manufacturer
15%
N/A
52
S 060
S 060.00
Buyer of auction goods
4%
VDS Applicable
53
S 061
S 061.00
Credit card supplying organization
15%
N/A
54
S 062
S 062.00
Money changer
15%
N/A
S 063
S 063.00
Tailoring shop
15%
N/A
S 064
S 064.10
Amusement and theme park
15%
N/A
S 064.20
Picnic spot and shooting

spot
15%
N/A
15%
VDS Applicable
55
56
of VAT VDS
57
S 065
S 065.00
House, floor & space

cleaning and maintenance
organization
58
S 066
S 066.00
Lottery ticket seller
15%
VDS Applicable
59
S 067
S 067.00
Immigration advisor
7.5%
N/A
60
S 068
S 068.00
Coaching center
15%
N/A
61
S 069
S 069.00
English medium school
7.5%
N/A
62
S 070
S 070.10
Private university
7.5%
N/A
S 070.20
Medical and engineering

college
7.5%
N/A
63
S 071
S 071.00
Event organizer
15%
VDS Applicable
64
S 072
S 072.00
Human resource providers
15%
VDS Applicable
65
S 074
S 074.00
Rent of office space or

building used for commercial purpose
9%
N/A
66
S 076
S 076.00
Social and sports related

club
15%
N/A
67
S 078
S 078.00
Sales center of RMG of own

brand
5%
N/A
113
Sl.
Head
No.
Service
Code
68
S 099
S 099.00
Any services not specified under SRO 175

-Ain/2011/598 -Mushak
dated 09 June 2011, Second
Schedule and Section - 14
of VAT Act, 1991 will be
taxed under this code
15%
N/A
S 099.10
Information technology
enabled services
4.5%
VDS Applicable
S 099.20
Other services
15%
VDS Applicable
S 099.30
Sponsorship services
7.5%
VDS Applicable
69
SRO 242
-Ain/2012/659
-Mushak dated 28
June 2012;
Service provider
Advance Trade VAT (ATV)
of VAT VDS
4%
N/A
SRO 124 Ain/2015/730

Mushak dated 04
June, 2015
114
SUMMARY OF
GIFT TAX
115
Its not our speciality. Its theirs.

BDO Business Services and Outsourcing
From global compliance to accounting and bookkeeping and payroll, many businesses find themselves challenged by
responsibilities that are outside their core competencies. BDOs experienced professionals provide a wide
range of accounting, compliance, payroll and business process services, freeing them up to focus on what made them
successful in the first place: their core businesses.
116
52. Gift tax

As per Section 3 of the Gift Tax Act, 1990, gift tax is leviable on gifts made in any
financial year on and from 1 July 1990 at the rates prescribed in the schedule. As
per Section 2(f), Gift means the transfer of any existing immovable or moveable
property by one person to another, made voluntarily and without consideration of
any money or moneys worth.
The value of property under gift (other than cash) shall be the value which, in the
opinion of the Deputy Commissioner of Taxes, it would fetch if sold in the open
market on the date of gift. When a property is not saleable in the open market and
such value cannot be determined, its value will be determined according to the rules
prescribed for the purpose. Methods of valuation of gift have been provided in the
Section - 5 of the Gift Tax Act, 1990.
As per Section 20, provisions of the Gift Tax Act, 1990 shall not apply to gifts made
by following persons
XX
A body corporate established or constituted by or under any law
XX
Any institution or fund whose income is exempt from income tax under Sixth
Schedule, Part A, Para 1 &2 of the Income Tax Ordinance, 1984
53. Exemption from Gift Tax

[Section 4]
As per Section 4 of the Gift Tax Act, 1990, gift tax shall not be charged in respect
of the following gifts made by any person
XX
Gift of property situated outside Bangladesh
XX
Gift to the Government or any local authority
XX
Gift to the following funds or institutions for charitable purpose

-- Any university established under the law in force in Bangladesh or any
educational institution including polytechnic institute recognized by the
Education Board or recognized or run by the Government
-- Any hospital recognized or run by the Government or any local authority or
any hospital aided by the Government or any local authority
-- Any flood or disaster management fund established or approved by the
Government
-- Such institutions or funds for religious or charitable purposes, not being a
private religious institution or fund which does not ensure for the benefit of
117
the public, as are established in Bangladesh and approved by the Government

for such purposes, or to any institution established for religious or charitable
purposes and registered under any law for the time being in force, up to
20% of the total income determined for the concerned year or BDT 100,000
whichever is less
XX
Gift to the dependent relative up to BDT 20,000 on the occasion of his/her

marriage
XX
Gift by way of payment of policy of insurance or annuity for any person (other
than wife/spouse) dependent upon him for support and maintenance up to BDT
20,000
XX
Gift under a will
XX
Gift under contemplation of death
XX
Gift to sons, daughters, father, mother, spouse, brothers and sisters
In addition to the above exemptions, gifts made in any financial year up to value of
BDT 20,000 are exempt from gift tax. The Government may by notification exempt
any class of gift or any class of person from gift tax.
54. Rates of Gift Tax

[Section - 3]
Gift tax is imposed at a 4 tier progressive rate. The value of taxable gift with
corresponding gift tax rate are quoted below
Value of gift
Rate of gift tax
On the first BDT 500,000 of the value of all taxable gifts
5%
On the next BDT 1,000,000 of the value of all taxable gifts
10%
On the next BDT 2,000,000 of the value of all taxable gifts
15%
On the balance of the value of all taxable gifts
20%
55 . Return of Gift Tax

[Section - 7]
Every person who had made taxable gift during any financial year of an amount as to
render him liable to gift tax under the Gift Tax Act, 1990, shall before 15 September
of the corresponding assessment year furnish a return to the Deputy Commissioner
of Taxes in the prescribed form and in the prescribed manner. Tax on the basis of the
return is payable on or before the date on which such return is furnished.
118
Note:
119
120
121
122

Bangladesh Tax Handbook 2015-2016

Uploaded by

Copyright:

Available Formats

Bangladesh Tax Handbook 2015-2016

Uploaded by

Document Information

Original Description:

Copyright

Available Formats

Share this document

Share or Embed Document

Sharing Options

Did you find this document useful?

Is this content inappropriate?

Copyright:

Available Formats

Bangladesh Tax Handbook 2015-2016

Uploaded by

Copyright:

Available Formats

TABLE OF CONTENTS

Tax deducted at source................................................................... 48

Payment of tax deducted at source..................................................... 58

Final settlement of tax liability.......................................................... 59

Set-off and carry forward of loss........................................................ 61

Carry forward of depreciation allowance.............................................. 62

FILING OF RETURN & PAYMENT OF TAX........................................................ 63

Filing of return of income................................................................. 63

Filing of revised return.................................................................... 64

Return of withholding tax................................................................. 64

Payment of tax on the basis of return.................................................. 65

Advance payment of tax.................................................................. 65

Assessment on correct return............................................................ 66

Assessment after hearing................................................................. 67

Assessment on the basis of report of a Chartered Accountant...................... 68

Best judgement assessment.............................................................. 68

Reduced rate of tax........................................................................ 87

Investment allowances eligible for tax credit......................................... 93

CSR activities eligible for tax credit.................................................... 95

Special tax treatment..................................................................... 97

Avoidance of double taxation............................................................ 97

44.1 Procedure from record keeping to submission of return...................... 98

Offences, penalties & punishments....................................................102

SUMMARY OF VALUE ADDED TAX................................................................105

Taxes imposed under VAT Act, 1991....................................................107

Goods and services chargeable to VAT.................................................107

Persons responsible to pay the VAT.....................................................108

VAT deduction at source..................................................................108

Deposit of deducted VAT.................................................................108

Scope of VAT and specified rates........................................................109

SUMMARY OF GIFT TAX..........................................................................115

Exemption from Gift Tax.................................................................117

Rates of Gift Tax...........................................................................118

Return of Gift Tax.........................................................................118