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The Income-tax Ordinance, 1984

( Ordinance NO. XXXVI Of 1984 )

An Ordinance to consolidate and amend the law relating to Income-tax.

 
 
 

WHEREAS it is expedient to consolidate and amend the law relating to income-tax;

 
 
 
 

NOW, THEREFORE, in pursuance of the Proclamation of the 24th March, 1982, and in exercise of all powers enabling him in this behalf, the President is pleased to make and promulgate the following Ordinance:-

 
 
 

Chapter I

PRELIMINARY

Short title and commencement
1. (1) This Ordinance may be called the Income-tax Ordinance, 1984.
 
 
(2) It shall come into force on the first day of July, 1984.
Definitions
 

2. In this Ordinance, unless there is anything repugnant in the subject or context,-

 

(1) "agricultural income" means-

 

(a) any income derived from any land in Bangladesh and used for agricultural purposes-

 

(i) by means of agriculture; or

 

(ii) by the performance of any process ordinarily employed by a cultivator to render marketable the produce of such land; or

 

(iii) by the sale of the produce of the land raised by the cultivator in respect of which no process, other than that to render the produce marketable, has been performed; or

 

(iv) by granting a right to any person to use the land for any period; or

 

(b) any income derived from any building which-

 

(i) is occupied by the cultivator of any such land as is referred to in sub-clause (a) in which any process is carried on to render marketable any such produce as aforesaid;

 

(ii) is on, or in the immediate vicinity of, such land; and

 

(iii) is required by the cultivator as the dwelling house or store-house or other out-house by reason of his connection with such land;

 

(2) "amalgamation", in relation to companies, means the merger of one or more companies with another company, or the merger of two or more companies to form one company (the company or companies which so merged being referred to as the amalgamating company or companies and the company with which they merge or which is formed as a result of the merger as the amalgamated company) in such a manner that by virtue of, and for reasons attributable to, the merger,-

 

(a) all the property of the amalgamating company or companies immediately before the merger becomes the property of the amalgamated company;

 

(b) all the liabilities of the amalgamating company or companies immediately before the merger become the liabilities of the amalgamated company; and

 

(c) the shareholders holding not less than nine-tenths in value of the shares in the amalgamating company or companies (other than shares already held therein immediately before the merger by, or by a nominee for, the amalgamated company or its subsidiary) become shareholders of the amalgamated company;

 

(3) "annual value" shall be deemed to be-

 

(a) in relation to any property let out,-

 

(i) (i) the sum for which property might reasonably be expected to let from year to year 1[ ***] 2[ and any amount received by letting out furniture, fixture, fittings etc; or]

 

(ii) where the annual rent in respect thereof is in excess of the sum referred to in paragraph (i), the amount of the annual rent;

 

3[ * * *]

 

(4) "Appellate Joint Commissioner" means a person appointed to be an Appellate Joint Commissioner of Taxes under section 3 4[ , and includes a 5[ an Appellate Additional Commissioner of Taxes]] 6[ and also a person appointed to hold current charge of an Appellate Joint Commissioner of Taxes];

 

(5) "Appellate Tribunal" means the Taxes Appellate Tribunal established under section 11;

 

7[ (5A) "approved gratuity fund" means a gratuity fund which has been and continues to be approved by the Board in accordance with the provisions of Part C of the First Schedule;]

 

(6) "Approved superannuation fund" means a superannuation fund 8[ or a pension fund] which has been and continues to be approved by the Board in accordance with the provisions of Part A of the First Schedule;

 

(7) "Assessee", means a person by whom any tax or other sum of money is payable under this Ordinance, and includes-

 

(a) every person in respect of whom any proceeding under this Ordinance has been taken for the assessment of his income or the income of any other person in respect of which he is assessable, or of the amount of refund due to him or to such other person;

 

9[ (aa) every person by whom a minimum tax is payable under this Ordinance;]

 

(b) every person who is required to file a return under section 75, section 89 or section 91;

 

(c) every person who desires to be assessed and submits his return of income under this Ordinance; and

 

(d) every person who is deemed to be an assessee, or an assessee in default, under any provision of this Ordinance;

 

(8) "assessment", with its grammatical variations and cognate expressions, includes re-assessment and additional or further assessment;

 

(9) "assessment year" means the period of twelve months commencing on the first day of July every year; and includes any such period which is deemed, under the provisions of this Ordinance, to be assessment year in respect of any income for any period;

 

(10) "Assistant Commissioner of Taxes" means a person appointed to be an Assistant Commissioner of Taxes under section 3;

 

(11) "Bangladeshi company" means a company formed and registered under the Companies Act, 1913 (VII of 1913) 10[ or কোম্পানী আইন, ১৯৯৪ (১৯৯৪ সনের ১৮ নং আইন), and includes a body corporate] established or constituted by or under any law for the time being in force in Bangladesh having in either case its registered office in Bangladesh;

 

(12) "Banking company" has the same meaning as in 11[ ব্যাংক-কোম্পানী আইন, ১৯৯১ (১৯৯১ সনের ১৪ নং আইন)], and includes any body corporate established or constituted by or under any law for the time being in force which transacts the business of banking in Bangladesh;

 

(13) "Board" means the National Board of Revenue constituted under the National Board of Revenue Order, 1972 (P. O. No. 76 of 1972);

 

(14) "business" includes any trade, commerce or manufacture or any adventure or concern in the nature of trade, commerce or manufacture;

 

(15) "capital asset" means property of any kind held by an assessee, whether or not connected with his business or profession, but does not include-

 

(a) any stock-in-trade (not being stocks and shares), consumable stores or raw materials held for the purposes of his business or profession; 12[ and]

 

(b) personal effects, that is to say, movable property (including wearing apparel, jewellery, furniture, fixture, equipment and vehicles), which are held exclusively for personal use by, and are not used for purposes of the business or profession of the assessee or any member of his family dependent on him; 13[ ***]

 

14[ ***]

 

15[ (16) “charitable purpose” includes-

 

(a) relief of the poor, education and medical relief; and

 

(b) the advancement of any other object of general public utility, subject to the following conditions-

 

(i) it does not involve carrying out any activities in the nature of trade, commerce or business; or

 

(ii) where it involves any service rendered for a consideration, the aggregate value of such consideration in the income year does not exceed twenty lakh taka;]

 

(17) "chartered accountant" means a chartered accountant as defined in the Bangladesh Chartered Accountants Order, 1973 (P.O. No. 2 of 1973);

 

(18) "child", in relation to any individual, includes a step-child and an adopted child of that individual;

 

16[ (19) "Commissioner" means a person appointed to be a Commissioner of Taxes or Commissioner (Large Taxpayer Unit) under section 3, or a person appointed to hold current charge of a Commissioner of Taxes or Commissioner (Large Taxpayer Unit);]

 

17[ (19A) "Commissioner (Appeals)" means a person appointed to be a 18[ Commissioner of Taxes (Appeals) under section 3 and includes a person appointed to hold current charge of a Commissioner of Taxes (Appeal)];

 

19[ * * *]

 

(20) "Company" means a company as defined in 20[ the Companies Act, 1913 (VII of 1913) or কোম্পানী আইন, ১৯৯৪ (১৯৯৪ সনের ১৮ নং আইন)] and includes-

 

(a) a body corporate established or constituted by or under any law for the time being in force;

 

(b) any nationalised banking or other financial institution, insurance body and industrial or business enterprise; 21[ * * *]

 

22[ 23[ (bb) an association or combination of persons, called by whatever name, if any of such persons is a company as defined in 24[ the Companies Act, 1913 (VII of 1913) or কোম্পানী আইন, ১৯৯৪ (১৯৯৪ সনের ১৮ নং আইন)];

 

(bbb) any association or body incorporated by or under the laws of a country outside Bangladesh; and]

 

(c) any foreign association or body, 25[ not incorporated by or under any law], which the Board may, by general or special order, declare to be a company for the purposes of this Ordinance;

 

(21) "co-operative society" means a co-operative society registered under 26[ সমবায় সমিতি আইন, ২০০১ (২০০১ সনের ৪৭ নং আইন) (Co-operative Societies Act, 2001)(Act No. 47 of 2001)], or under any other law for the time being in force governing the registration of co-operative societies;

 

(22) "cost and management accountant" means a cost and management accountant as defined in the Cost and Management Accountants Ordinance, 1977 (LIII of 1977);

 

(23) "Deputy Commissioner of Taxes" means a person appointed to be a Deputy Commissioner of Taxes under section 3, 27[ and includes a person appointed to be a Transfer Pricing Officer,] an Assistant Commissioner of Taxes, an Extra Assistant Commissioner of Taxes and a Tax Recovery Officer;

 

(24) "director" and "manager" in relation to a company have the meanings assigned to them in 28[ the Companies Act, 1913 (VII of 1913) or কোম্পানী আইন, ১৯৯৪ (১৯৯৪ সনের ১৮ নং আইন)];

 

29[ (25) "Director-General of Inspection" means a person appointed to be a Director-General of Inspection (Taxes) under section 3, and except for the purpose of section 117, includes a person appointed for the purpose of this Ordinance to be an Additional Director-General of Inspection (Taxes), a Deputy Director-General of Inspection (Taxes), or an Assistant Director-General of Inspection (Taxes);]

 

30[ (25A) "Director General (Training)" means a person appointed to be Director General (Training);]

 

31[ (25AA) "Director General, Central Intelligence Cell" means of persons appointed to be Director General, Central Intelligence Cell 32[ or 33[ any Director, Central Intelligence Cell or any Joint Director, Central Intelligence Cell or Deputy Director, Central Intelligence Cell or Assistant Director, Central Intelligence Cell ] authorised by him]];

 

(26) "dividend" includes-

 

(a) any distribution by a company of accumulated profits, whether capitalised or not, if such distribution entails the release by the company to its shareholders of all or any part of its assets or reserves;

 

(b) any distribution by a company, to the extent to which the company possesses accumulated profits, whether capitalised or not, to its shareholders of debentures, debenture-stock or deposit certificates in any form, whether with or without interest;

 

(c) any distribution made to the shareholders of a company on its liquidation to the extent to which the distribution is attributable to the accumulated profits of the company immediately before its liquidation, whether capitalised or not;

 

(d) any distribution by a company to its shareholders on the reduction of its capital, to the extent to which the company possesses accumulated profits, whether such accumulated profits have been capitalised or not;

 

34[ (dd) any profit remitted outside Bangladesh by a company not incorporated in Bangladesh under কোম্পানী আইন, ১৯৯৪ (১৯৯৪ সনের ১৮ নং আইন)];

 

35[ (ddd) any distribution of profit of a mutual fund or an alternative investment fund;]

 

(e) any payment by a private company of any sum (whether as representing a part of the assets of the company or otherwise) by way of advance or loan to a shareholder or any payment by any such company on behalf, or for the individual benefit, of any such shareholder, to the extent to which the company, in either case, possesses accumulated profit;

 

but does not include-

 

(i) a distribution made in accordance with sub-clause (c) or sub-clause (d) in respect of any share including preference share for full cash consideration, or redemption of debentures or debenture-stock, where the holder of the share or debenture is not entitled in the event of liquidation to participate in the surplus assets;

 

(ii) any advance or loan made to a shareholder in the ordinary course of its business, where the lending of money is a substantial part of the business of the company;

 

(iii) any dividend paid by a company which is set off by the company against the whole or any part of any sum previously paid by it and treated as dividend within the meaning of sub-clause (e) to the extent to which it is so set off;

 

36[ (iiia) any bonus share issued by a company;]

 

37[ ***]

 

Explanation.- The expression "accumulated profits",-

 

(a) wherever it occurs in this clause, includes any reserve made up wholly or partly of any allowance, deduction or exemption admissible under this Ordinance or under the Income-tax Act, 1922 (XI of 1922), but does not include capital gains arising before the first day of April, 1946, or after the thirty-first day of March, 1949, and before the eighth day of June, 1963;

 

(b) as used in sub-clauses (a), (b) and (d), includes all profits of the company up to the date of such distribution; and

 

(c) as used in sub-clause (c), includes all profits of the company up to the date of its liquidation;

 

(27) "employer" includes a former employer;

 

(28) "employee", in relation to a company, includes the managing director, or any other director or other person, who, irrespective of his designation, performs any duties or functions in connection with the management of the affairs of the company;

 

(29) "Extra Assistant Commissioner of Taxes" means a person appointed to be an Extra Assistant Commissioner of Taxes under section 3 38[ and includes a person appointed to hold current charge of an Extra Assistant Commissioner of Taxes];

 

39[ (30) "fair market value" means, in relation to capital asset-

 

(a) the price which such asset would ordinarily fetch on sale in the open market on the relevant day, and, where such price is not ascertainable, the price which the Deputy Commissioner of Taxes may, with the approval in writing of the Inspecting Joint Commissioner, determine;

 

(b) the residual value received from the lessee in case of an asset leased by a financial institution having license from the Bangladesh Bank on termination of lease agreement on maturity or otherwise subject to the condition that such residual value plus amount realised during the currency of the lease agreement towards the cost of the asset is not less than the cost of acquisition to the lessor financial institution.]

 

(31) "fees for technical services" means any consideration (including any lump sum consideration) for the rendering of any managerial, technical or consultancy services (including the provision of services of technical or other personnel) but does not include consideration for any construction, assembly, mining or like project undertaken by the recipient, or consideration which would be income of the recipient classifiable under the head "Salaries" 40[ .

 

Explanation.- For the removal of doubts, it is hereby declared that in this clause, “fees for technical services” shall include technical services fee, technical assistance fee or any fee of similar nature;]

 

41[ (31A) "financial institution" has the same meaning as assigned to it in আর্থিক প্রতিষ্ঠান আইন, ১৯৯৩ (১৯৯৩ সনের ২৭ নং আইন) (Financial Institution Act, 1993) (Act No. 27 of 1993);]

 

(32) "firm" has the same meaning as assigned to it in the Partnership Act, 1932 (IX of 1932);

 

(33) "foreign company" means a company which is not a Bangladeshi company;

 

42[ (34) “income” includes-

 

(a) any income, receipts, profits or gains, from whatever source derived, chargeable to tax under any provision of this Ordinance;

 

(b) any amount which is subject to collection or deduction of tax at source under any provision of this Ordinance;

 

(c) any loss of such income, profits or gains;

 

(d) the profits and gains of any business of insurance carried on by a mutual insurance association computed in accordance with paragraph 8 of the Fourth Schedule;

 

(e) any sum deemed to be income, or any income accruing or arising or received, or deemed to accrue or arise or be received in Bangladesh under any provision of this Ordinance;

 

(f) any amount on which a tax is imposed;

 

(g) any amount which is treated as income under any provision of this Ordinance;]

 

43[ * * *]

 
 

44[ (35) “income year” means-

 

(a) the period beginning with the date of setting up of a business and ending with the thirtieth day of June following the date of setting up of such business;

 

(b) the period beginning with the date on which a source of income newly comes into existence and ending with the thirtieth day of June following the date on which such new source comes into existence;

 

(c) the period beginning with the first day of July and ending with the date of discontinuance of the business or dissolution of the unincor- porated body or liquidation of the company, as the case may be;

 

(d) the period beginning with the first day of July and ending with the date of retirement or death of a participant of the unincorporated body;

 

(e) the period immediately following the date of retirement, or death, of a participant of the unincorporated body and ending with the date of retirement, or death, of another participant or the thirtieth day of June following the date of the retirement, or death, as the case may be;

 

(f) in the case of bank, insurance or financial institution 45[ or any subsidiary thereof] the period of twelve months commencing from the first day of January of the relevant year; or

 

(g) in any other case the period of twelve months commencing from the first day of July of the relevant year 46[ :

 

Provided that the Deputy Commissioner of Taxes may allow a different financial year for a company which is a 47[ subsidiary, including a subsidiary thereof, or a holding company of a parent company incorporated outside Bangladesh or a branch or liaison office thereof] if such company requires to follow a different financial year for the purpose of consolidation of its accounts with the parent company;]

 

(36) "Inspecting Joint Commissioner" means a person appointed to be an Inspecting Joint Commissioner of Taxes under section 3 48[ , and includes 49[ an Inspecting Additional Commissioner of Taxes]] 50[ and also a person appointed to hold current charge of an Inspecting Joint Commissioner of Taxes];

 

51[ (37) " Inspector" means an Inspector of Taxes under section 3 and also includes a person appointed to hold charge of an Inspector of Taxes;]

 

(38) "Interest" means interest payable in any manner in respect of any money borrowed or debt incurred (including a deposit, claim or other similar right or obligation) and includes any service fee or other charge in respect of the money borrowed or debt incurred or in respect of any credit facility which has not been utilised;

 

(39) "legal representative" has the same meaning as assigned to it in section 2(11) of the Code of Civil Procedure, 1908 (Act V of 1908);

 

(40) "market value", in respect of agricultural produce, means-

 

(a) where such produce is ordinarily sold in the market in its raw state or after application to it of any process employed by a cultivator to render it fit to be taken to the market, t he value calculated according to the average price at which it has been sold during the year previous to that in which the income derived from such produce first becomes assessable; and

 

(b) where such produce is not ordinarily sold in the market in its raw state, the aggregate of-

 

(i) the expenses of cultivation;

 

(ii) the land development tax or rent paid for the lands in which it was grown; and

 

(iii) such amount as the Deputy Commissioner of Taxes finds, having regarded to the circumstances of each case, to represent a reasonable rate of profit on the sale of the produce in question as agricultural produce;

 

(41) "money borrowed" includes, in the case of a banking company, money received by way of deposit;

 

(42) "non-resident" means a person who is not a resident;

 

(43) "partner" has the same meaning as assigned to it in the Partnership Act, 1932 (IX of 1932), and includes a person who, being a minor, has been admitted to the benefits of partnership;

 

(44) "partnership" has the same meaning as assigned to it in the Partnership Act, 1932 (IX of 1932);

 

52[ (44A) “permanent establishment”, in relation to income from business or profession, means a place or activity through which the business or profession of a person is wholly or partly carried on, and includes-

 

(i) a place of management;

 

(ii) a branch;

 

(iii) an agency;

 

(iv) an office;

 

(v) a warehouse;

 

(vi) a factory;

 

(vii) a workshop;

 

(viii) a mine, oil or gas well, quarry or any other place of exploration, exploitation or extraction of natural resources;

 

(ix) a farm or plantation;

 

(x) a building site, a construction, assembly or installation project or supervisory activities in connection therewith;

 

(xi) the furnishing of services, including consultancy services, by a person through employees or other personnel engaged by the person for such purpose, if activities of that nature continue (for the same or a connected project) in Bangladesh; and

 

(xii) any associated entity or person (hereinafter referred to as “Person A”) that is commercially dependent on a non-resident person where the associated entity or Person A carries out any activity in Bangladesh in connection with any sale made in Bangladesh by the non-resident person;]

 
 

53[ (45) "perquisite" means-

 

(i) any payment made to an employee by an employer in the form of cash or in any other form excluding basic salary, festival bonus, incentive bonus 54[***], arrear salary, advance salary, leave encashment or leave fare assistance and overtime, and

 

(ii) any benefit, whether convertible into money or not, provided to an employee by an employer, called by whatever name, other than contribution to a recognised provident fund, approved pension fund, approved gratuity fund and approved superannuation fund;]

 

55[ 46) “person” includes an individual, a firm, an association of persons, a Hindu undivided family, a trust, a fund, a local authority, a company, an entity and every other artificial juridical person;

 

(46A) “person with disability” means an individual registered as প্রতিবন্ধী ব্যক্তি (person with disability) under section 31 of প্রতিবন্ধী ব্যক্তির অধিকার ও সুরক্ষা আইন, ২০১৩ (২০১৩ সনের ৩৯ নং আইন);]

 

(47) "prescribed" means prescribed by rules made under this Ordinance;

 

(48) "principal officer", used with reference to a local authority, a company, any other public body or any association of persons, includes-

 

(a) managing director, 56[ chief executive officer,] manager, secretary, treasurer, agent or accountant (by whatever designation known), or any officer responsible for management of the affairs, or of the accounts, of the authority, company, body or association; and

 

(b) any person connected with the management or the administration of the local authority, company, body or association upon whom the Deputy Commissioner of Taxes has served a notice of his intention to treat him as principal officer thereof;

 

(49) "profession" includes a vocation;

 

(50) "profits in lieu of salary" includes-

 

(a) the amount of compensation due to, or received by, an assessee from his employer at, or in connection with, the termination of, or the modification of any terms and conditions relating to, his employment; and

 

(b) any payment due to, or received by, an assessee from a provident or other fund to the extent to which it does not consist of contributions by the assessee and the interest on such contributions;

 

(51) "public servant" has the same meaning as in section 21 of the Penal Code (Act No. XLV of 1860);

 

(52) "recognised provident fund" means a provident fund which has been, and continues to be, recognised by the Commissioner in accordance with the provisions of Part B of the First Schedule;

 

57[ * * *]

 

(54) "relative", in relation to an individual, means the husband, wife, brother, sister or any lineal ascendant or descendant of that individual;

 

(55) "resident", in respect of any income year, means-

 

(a) an individual who has been in Bangladesh-

 

(i) for a period of, or for periods amounting in all to, one hundred and eighty-two days or more in that year; or

 
 

(ii) for a period of, or periods amounting in all to, ninety 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 days or more during four years preceding that year;

 

(b) a Hindu undivided family, firm or other association of persons, the control and management of whose affairs is situated wholly 58[***] in Bangladesh in that year; 59[***]

 

(c) a Bangladeshi company or any other company the control and management of whose affairs is situated wholly in Bangladesh in that year;

 

60(d) a trust, a fund or an entity, the control and management of whose affairs is situated wholly in Bangladesh in that year; and

   (e) a local authority and every other artificial juridical person;]

 

(56) "royalty" means consideration (including any lump sum consideration but excluding any consideration which is classifiable as income of the recipient under the head "Capital gains") for-

 

(a) transfer of all or any rights, including the granting of a licence, in respect of a patent, invention, model, design, mark or similar property;

 

(b) the imparting of any information concerning the working of, or the use of, a patent, invention, model, design, secret process or formula, or trade mark or similar property;

 

(c) the use of any patent, invention, model, design, secret process or formula, or trade mark or similar property;

 

(d) the imparting of any information concerning technical, industrial, commercial, or scientific knowledge, experience or skill;

 

(e) the transfer of all or any rights, including granting of a licence, in respect of any copyright, literacy, artistic or scientific work, including films or video tapes for use in connection with television or tapes for use in connection with radio broadcasting, but not including consideration for sale, distribution or exhibition of cinematograph films; or

 

(f) the rendering of any services in connection with any of the aforesaid activities;

 

61[Explanation 1.¾For the purpose of royalty in respect of any right, property or information, it is not necessary that¾

(i) the possession or control of such right, property or information is with the payer;

(ii) such right, property or information is used directly by the payer;

(iii) the location of such right, property or information is in Bangladesh.

Explanation 2.¾For the removal of doubts, it is hereby clarified that the expression “process” includes transmission by satellite (including up-linking, amplification, conversion for down-linking of any signal), cable, optical fibre or by any other similar technology, whether or not such process is secret;]

 

(57) "rules" means rules made under this Ordinance;

 
 

(58) "salary" includes-

 
 

62[ (a) any pay or wages;]

 
 

(b) any annuity, pension or gratuity;

 

(c) any fees, commissions, allowances, perquisites or profits in lieu of, or in addition to, salary or wages;

 
 

(d) any advance of salary;

 

63[ (e) any leave encashment;]

 

(59) "scheduled bank" has the same meaning as in the Bangladesh Bank Order, 1972 (P. O. No. 127 of 1972);

 

64[ ***]

 

(60) "shareholder" includes a preference shareholder;

 

(61) "speculation-business" means business in which a contract for the purchase or sale of any commodity, including stocks and shares, is periodically or ultimately settled otherwise than by the actual delivery or transfer of the commodity or scripts, but does not include business in which-

 

(a) a contract in respect of raw materials or merchandise is entered into by a person in the course of his manufacturing or mercantile business to guard against loss through future price fluctuations for the purpose of fulfilling his other contracts for the actual delivery of the goods to be manufactured or the merchandise to be sold by him;

 

(b) a contract in respect of stocks and shares is entered into by a dealer or investor therein to guard against loss in his holdings of stocks and shared through price fluctuations; and

 

(c) a contract is entered into by a member of a forward market or a stock exchange in the course of any transaction in the nature of jobbing or arbitrage to guard against loss which may arise in the ordinary course of his business as such member;

 
 

65[ (62) "tax" means the income tax payable under this Ordinance and includes any additional tax, excess profit tax, penalty, interest, fee or other charges leviable or payable under this Ordinance;]

 

66[ (62A) “Tax Day” means-

 

(i) in the case of an assessee other than a company, the thirtieth day of November following the end of the income year;

 

(ii) in the case of a company, the fifteenth day of the seventh month following the end of the income year 67[ or the fifteenth day of September following the end of the income year where the said the fifteenth day falls before the fifteenth day of September];

 

(iii) the next working day following the Tax Day if the day mentioned in sub-clauses (i) and (ii) is a public holiday;]

 
 

68[ (62B) “taxed dividend” means the dividend income on which tax has been paid by the recipient under this Ordinance;]

 
 

69[ ***]

 

(64) "Tax Recovery Officer" means a person appointed to be a Tax Recovery Officer under section 3;

 

(65) "total income" means the total amount of income referred to in section 17 computed in the manner laid down in this Ordinance, and includes any income which, under any provision of this Ordinance, is to be included in the total income of an assessee;

 

70[ (65A) “trading account” or “profit and loss account” includes income statement and other similar statements of accounts prepared under International Financial Reporting Standards;]

 

(66) "transfer", in relation to a capital asset, includes the sale, exchange or relinquishment of the asset, or the extinguishment of any right therein, but does not include-

 

(a) any transfer of the capital asset under a gift, bequest, will or an irrevocable trust;

 

(b) any distribution of the assets of a company to its shareholders on its liquidation; and

 

(c) any distribution of capital assets on the dissolution of a firm or other association of persons or on the partition of a Hindu undivided family;

 

71[ * * *]

 

(68) "written down value" means the written down value as defined in the Third Schedule;

 

(69) "year" means a financial year.

Chapter II

ADMINISTRATION

Income-tax authorities
3. There shall be the following classes of income-tax authorities for the purposes of this Ordinance, namely:-
 
 
(1) The National Board of Revenue,
 
 
72[* * *]
 
 
73[(IB) Chief Commissioner of Taxes; ]
 
 
74[(2) Directors-General of Inspection (Taxes),]
 
 
75[(2A) Commissioner of Taxes (Appeals),]
 
 
76[(2B) Commissioner of Taxes (Large Taxpayer Unit),]
 
 
77[(2C) Director General (Training),]
 
 
78[(2D) Director General, Central Intelligence Cell,]
 
 
(3) Commissioners of Taxes,
 
 
79[(3A) Additional Commissioners of Taxes who may be either Appellate Additional Commissioners of Taxes or Inspecting Additional Commissioners of Taxes,]
 
 
(4) Joint Commissioner of Taxes who may be either Appellate Joint Commissioner of Taxes or Inspecting Joint Commissioner of Taxes,
 
 
(5) Deputy Commissioners of Taxes,
 
 
80[(6) Tax Recovery Officers nominated by the Commissioner of Taxes among the Deputy Commissioner of Taxes within his jurisdiction;]
 
 
(7) Assistant Commissioners of Taxes,
 
 
(8) Extra Assistant Commissioners of Taxes, and
 
 
(9) Inspectors of Taxes.
Appointment of income-tax authorities
4. (1) Subject to the rules and orders of the Government regulating the terms and conditions of service of persons in public services and posts, appointment of income-tax authorities shall be made in accordance with the provisions of this Ordinance.
 
 
(2) The Board may appoint 81[82[Chief Commissioner of Taxes, Director General], Central Intelligence Cell,]83[ * * *] as many 84[ Directors-General of Inspection], 85[ Commissioners (Appeals),] Commissioners, Joint Commissioners of Taxes, Deputy Commissioners of Taxes, Tax Recovery Officers and Assistant Commissioners of Taxes and such other executive or ministerial officers and staff as it may think fit.
 
 
86[(2A) Notwithstanding anything contained in this Ordinance, the Board may, with the approval of the Government, appoint one or more person having appropriate professional skill and experience to perform such function as may be specified by an order issued in this behalf, and the person or persons so appointed shall be deemed to be an income-tax authority for the purposes of this Ordinance.]
 
 
(3) Subject to such orders or instructions as the Board may, from time to time, issue in this behalf, any other income-tax authority may appoint any income-tax authority subordinate thereto and such other executive or ministerial officers and staff as may be necessary for assistance in the execution of its functions.
Delegation of powers
87[4A. The Board may, by notification in the official Gazette, and subject to such limitations or conditions, if any, as may be specified therein, empower by name or designation,-
 
 
 
 
(a) any Inspecting Additional Commissioner of Taxes to exercise the powers of a Commissioner of Taxes 88[;]
 
(b) any Appellate Additional Commissioner of Taxes to exercise the powers of a Commissioner of Taxes (Appeal) 89[; and
 
(c) any Additional Director General or Joint Director General of Central Intelligence Cell to exercise the powers of Director General, Central Intelligence Cell.]
 
Subordination and control of income-tax authorities
5. 90[(1) The 91[* * *] 92[Chief Commissioner of Taxes, Director General] of Inspection, Commissioners (Appeals), and Commissioners shall be subordinate to the Board.]
 
 
(2) The 93[Additional Commissioners of Taxes, Joint Commissioners of Taxes], Deputy Commissioners of Taxes and Inspectors shall be subordinate to the Commissioners 94[or the Commissioner (Appeals), as the case may be,] within whose jurisdiction they are appointed to perform their function:
 
 
Provided that no order, direction or instruction shall be given so as to interfere with the discretion of the Appellate Joint Commissioners 95[or the Commissioners (Appeals)] in the exercise of their appellate functions.
 
 
(3) The Deputy Commissioners of Taxes and Inspectors shall be subordinate to the Inspecting Joint Commissioner within whose jurisdiction they perform their functions.
 
 
(4) The Inspectors shall be subordinate to the Deputy Commissioners of Taxes within whose jurisdiction they perform their functions.
Jurisdiction of income-tax authorities
6. (1) Subject to the provisions of this Ordinance,-
 
 
96[* * *]
 
 
97[(aa) the Directors-General of Inspection shall perform the following functions, namely:-
 
 
(i) carry out inspection of income tax cases;
 
 
(ii) investigate or cause investigation to be carried out in respect of cases involving leakage of revenue or evasion of taxes;
 
 
(iii) carry out audit of cases or offices involving income tax revenues only;
 
 
(iv) furnish annual report about the working of income tax offices dealing with revenue matters to the Board by the thirty first day of December following the end of the financial year to which it relates; and
 
 
(v) such other functions as may be assigned to them by the Board;]
 
 
98[(aaa) the Director General of Central Intelligence Cell shall perform the following functions, namely:-
 
(i) carry out intelligence works to gather information about taxpayers;
 
(ii) analyse information gathered through intelligence work vis-a-vis concerned income tax records;
 
(iii) detect tax evasions, concealments of income and offences as described in chapter XXI of Income Tax Ordinance, 1984;
 
(iv) carry out investigations to prove tax evasion or concealment or any other irregularities relating to taxes and to collect evidences in support of tax offences or tax frauds for recovery of tax with penalty and to suggest prosecutions in fit cases;
 
(v) to carry out functions as authorised by any other law.]
 
(b) the Commissioners 99[, the Commissioners (Appeals)] and the Appellate Joint Commissioners shall perform their functions in respect of such areas, or such persons or classes of persons, or such cases or classes of cases, or such incomes or classes of incomes, as the Board may assign to them;
 
 
100[(bb) the Commissioner (Large Taxpayer Unit) shall perform his functions in respect of such areas, or such persons or classes of persons, or such cases or classes of cases or such incomes or classes of incomes, as the Board may assign to him;]
 
 
(c) the Inspecting Joint Commissioners and the Deputy Commissioners of Taxes shall perform their functions in respect of such areas, or such persons or classes of persons, or such cases or classes of cases, or such incomes or classes of incomes as the Commissioner to whom they are subordinate may assign to them; and
 
 
(d) other income-tax authorities shall perform such functions as may be assigned to them by the income-tax authority to whom they are subordinate.
 
 
(2) (a) Any area or other jurisdiction or function assigned to an income-tax authority under sub-section (1) may be modified or varied, or may be transferred to any other income-tax authority with respect to areas, persons or classes of persons, or cases or classes of cases, or proceeding or classes of proceedings;
 
 
(b) any such transfer as is referred to in clause (a) may be made at any stage of the proceedings and further proceedings may be commenced from the stage at which such transfer takes place.
 
 
(3) Where more income-tax authorities than one have been assigned the same functions in respect of any area, or persons or classes of persons, or cases or classes of cases, or incomes or classes of incomes, they shall perform those functions in accordance with such allocation or distribution of work as the authority assigning the functions may make.
 
 
(4) The powers of the Board, Commissioners and Deputy Commissioners of Taxes, to assign any case to any authority, or to transfer any case from one authority to another, or to perform any function or functions under this section, shall include the power in respect of all or any proceedings relating to such case; and except as provided in sub-section (5), no such assignment, transfer or performance of functions shall be called in question by or before any court or other authority.
 
 
(5) Any person aggrieved by any order passed under this section may, within thirty days of such order, make a representation-
 
 
(a) to the Inspecting Joint Commissioner if the order was passed by a Deputy Commissioner of Taxes;
 
 
(b) to the Commissioner the Commissioners (Appeals) if the order was passed by an Inspecting Joint Commissioner; and
 
 
(c) to the Board if the order was passed by a Commissioner; and any order passed on such representation shall be final.
Exercise of jurisdiction by successor
7. Where, in respect of any proceeding under this Ordinance, an income-tax authority is succeeded by another, the income-tax authority so succeeding may continue the proceeding from the stage at which it was left by his predecessor.
Officers, etc. to follow instructions of the Board
8. All officers and other persons engaged in the performance of any functions under this Ordinance shall, in the matter of discharging those functions, observe and follow such orders, directions or instructions as the Board may issue from time to time:
 
 
 
 
Provided that no order, direction or instruction shall be given so as to interfere with the discretion of the Appellate Joint Commissioners 101[or the Commissioners (Appeals)] in the exercise of their appellate functions.
Guidance to the Deputy Commissioner of Taxes, etc.
9. In the course of any proceedings under this Ordinance, the Deputy Commissioner of Taxes may be assisted, guided or instructed by any income-tax authority to whom he is subordinate or any other person authorised in this behalf by the Board.
Exercise of assessment functions by the Inspecting Joint Commissioners 102[and the Inspecting Additional Commissioners]
10. The Commissioner may, with prior approval of the Board, by general or a special order in writing, direct that in respect of all or any proceedings relating to specified cases or classes of cases or specified persons of classes of persons within his jurisdiction, the powers and functions of the Deputy Commissioner of Taxes, 103[Inspecting Joint Commissioner, the Inspecting Additional Commissioner] and the Commissioner under this Ordinance shall be exercised by 104[Inspecting Joint Commissioner, the Inspecting Additional Commissioner], the Commissioner and the Board, respectively and for the purpose of any proceedings in respect of such cases or persons reference in this Ordinance or the rules made thereunder to the Deputy Commissioner of Taxes, 105[Inspecting Joint Commissioner, the Inspecting Additional Commissioner] or the Commissioner shall be deemed to be references to 106[Inspecting Joint Commissioner, the Inspecting Additional Commissioner], the Commissioner and the Board, respectively.

Chapter III

TAXES APPELLATE TRIBUNAL

Establishment of Appellate Tribunal
 
11. (1) For the purpose of exercising the functions of the Appellate Tribunal under this ordinance, the Government shall establish a Taxes Appellate Tribunal consisting of a President and such other 107[ * * *] members as the Government may, from time to time, appoint.
 
(2) [Omitted by section 28 of অর্থ আইন, ২০০২ (২০০২ সনের ১৪ নং আইন)]
 
108[ (3) A person shall not be appointed as a member of the Taxes Appellate Tribunal unless-
 
109[ (i) he was or is a member of the Board or holds the current charge of a member of the Board ; or]
 
(ii) he was a Commissioner of Taxes; or
 
(iii) he is a Commissioner of Taxes 110[ having at least one year experience as a Commissioner]; or
 
(iv) he is a chartered accountant and practised professionally for a period not less than eight years; or
 
(v) he is a cost and management accountant and practised professionally for a period not less than eight years; or
 
(vi) he is an income tax practitioner within the meaning of section 174(2)(f) and practised professionally for not less than twenty years; or
 
(vii) he is a professional legislative expert having not less than eight years' experience in the process of drafting and making financial and tax laws; or
 
(viii) he is an Advocate and practised professionally for not less than ten years in any income tax office 111[ ; or
 
112[ (ix) he is, was or has been a District Judge.]]
 
113[ (4) The Government shall appoint one of the members of the Appellate Tribunal to be the President thereof 114[ , who is a member of the Board or holds the current charge of a member of the Board].
 
Explanation.- For the purpose of this section, period of practice as chartered accountant shall include any period of practice as chartered accountant within the meaning of the Chartered Accountants Ordinance, 1961 (X of 1961) 115[ or Bangladesh Chartered Accountants Order, 1973 (P. O. No. 2 of 1973)] or as registered accountant enrolled on the register of accountants under the Auditor's Certificate Rules, 1950.]
Exercise of power of the Tribunal by Benches
12. (1) Unless the President in any particular case or class of cases otherwise directs, the powers and functions of the Appellate Tribunal shall be exercised by Benches of the Appellate Tribunal, hereinafter referred to as Bench, to be constituted by the President.
 
 
 
 
(2) A Bench shall be so constituted that it has not less than two members 116[* * *] 117[.
 
 
 
 
[* * *]]
Decision of Bench
13. (1) Subject to the provisions of sub-sections (2) and (3), the decision of bench in any case or on any point shall be given in accordance with the opinion of the majority of its members.
 
 
(2) Any point on which the members of a Bench are equally divided shall be stated in writing and shall be referred by the President to one or more other members of the Appellate Tribunal for hearing and the Point shall be decided according to the majority of the members of the Appellate Tribunal who have heard it including those who first heard it.
 
 
 
 
(3) Where there are only two members of the Appellate Tribunal and they differ in any case, the Government may appoint an additional member of the Appellate Tribunal for the purpose of hearing the case; and the decision of the case shall be given in accordance with the opinion of the majority of the members of the Appellate Tribunal as constituted with such additional member.
Exercise of power by one member
14. Notwithstanding anything contained in section 12, the Government may direct that the powers and functions of the Appellate Tribunal shall be exercised by any one of its members, or by two or more members jointly or severally.
Regulation of procedure
15. Subject to the provisions of this Ordinance, the Appellate Tribunal shall regulate its own procedure and the procedure of its Benches in matters arising out of the discharge of its functions including the places at which a Bench shall hold its sittings.
 
 

Chapter IV

CHARGE OF INCOME TAX

Charge of income-tax
16. (1) Where an Act of Parliament provides that income-tax shall be charged for any assessment year at any rate or rates, income-tax at that rate or those rates shall, subject to the provisions of that Act, be charged, levied, paid and collected in accordance with the provisions of this Ordinance in respect of the total income of the income year or income years, as the case may be, of every person:
 
 
Provided that where under the provisions of this Ordinance income-tax is to be charged in respect of the income of a period other than the income year, income-tax shall be charged, levied, paid and collected accordingly.
 
 
(2) Where under the provisions of this Ordinance income-tax is to be deducted at source, or paid or collected in advance, it shall be deducted, paid and collected accordingly.
 
 
(3) Notwithstanding anything contained in sub-section (1), income-tax shall be charged at the rates specified in the Second Schedule in respect of-
 
 
(i) a non-resident person, not being a company;
 
 
(ii) any income classifiable under the head “Capital gains”; and
 
 
(iii) any income by way of “winnings” referred to in section 19(13).
Charge of surcharge

118[16A. (1) Where any Act of Parliament enacts that a surcharge on income shall be charged for any assessment year at any rate or rates, such surcharge at that rate or those rates shall be charged for that year in respect of the total income of the income year or the income years, as the case may be, of every person.

 
 
 
 

(2) All the provisions of this Ordinance relating to charge, assessment, deduction at source, payment in advance, collection, recovery and refund of income tax shall, so far as may be, apply to the charge, assessment, deduction at source, payment in advance, collection, recovery and refund of the surcharge.]

Charge of additional tax
 

119[120[16B. Charge of additional tax.-Notwithstanding anything contained in any other provision of this Ordinance, where any person employs or allows, without prior approval of the 121[appropriate authority of the Government], any individual not being a Bangladeshi citizen to work at his business or profession at any time during the income year, such person shall be charged additional tax at the rate of fifty percent (50%) of the tax payable on his income or taka five lakh, whichever is higher in addition to tax payable under this Ordinance.

Charge of additional amount, etc

16BB. Where under the provisions of this Ordinance any interest, amount or any other sum, by whatever name called, is to be charged in addition to tax, it shall be charged, levied, paid and collected accordingly.

Charge of minimum tax

16BBB. Where under the provisions of this Ordinance any minimum tax is to be charged, it shall be charged, levied, paid and collected accordingly.]

[Omitted]

122[***]

[Omitted]

123[***]

[Omitted]

124[***]

 
[Omitted]

16D. [Charge of dividend distribution tax- Omitted by section 10 of অর্থ আইন, ২০০৫ (২০০৫ সনের ১৬ নং আইন), which was inserted by section 18 of অর্থ আইন, ২০০৩ (২০০৩ সনের ১৭ নং আইন).]

[Omited]

125[***]

Charge of tax on stock dividend

126[16F.  Notwithstanding anything contained in this Ordinance or any other law for the time being in force, if in an income year, the amount of stock dividend declared or distributed exceeds the amount of cash dividend declared ordistrbuted or without declaration or distribution of any cash divided by a company registered under কোম্পানী আইন, ১৯৯৪ (১৯৯৪ সনের ১৮ নং আইন) and listed to any stock exchange, tax shall be payable at the rate of ten per cent on the whole amount of stock dividend declared or distributed in that income year.

Charge of tax on retained earnings, reserves, surplus etc

16G.  Notwithstanding anything contained in this ordinance or any other law for the time being in force, if in an income year, the total amount transferred to retained earnings or any fund, reserve or surplus, called by whatever name, by a company registered under কোম্পানী আইন, ১৯৯৪ (১৯৯৪ সনের ১৮ নং আইন) and listed to any stock exchange exceeds seventy per cent of the net income after tax, tax shall be payable at the rate of ten per cent on the total amount so transferred in that income year.]

Scope of the total income
17. (1) Subject to the provisions of this Ordinance the total income of any income year of any person includes-
 
 
(a) in relation to a person who is a resident, all income, from whatever source derived, which-
 
 
(i) is received or deemed to be received in Bangladesh by or on behalf of such person in such year; or
 
 
(ii) accrues or arises, or is deemed to accrue or arise to him in Bangladesh during that year; or
 
 
(iii) accrues or arises to him outside Bangladesh during that year; and
 
 
(b) in relation to a person who is a non-resident, all income from whatever source derived, which-
 
 
(i) is received or deemed to be received in Bangladesh by or on behalf of such person in such year; or
 
 
(ii) accrues or arises, or is deemed to accrue or arise, to him in Bangladesh during that year.
 
 
(2) Notwithstanding anything contained in sub-section (1), where any amount consisting of either the whole or a part of any income of a person has been included in his total income on the basis that it has accrued or arisen, or is deemed to have accrued or arisen, to him in any year, it shall not be included again in his total income on the ground that it is received or deemed to be received by him in Bangladesh in another year.
Income deemed to accrue or arise in Bangladesh
18. The following income shall be deemed to accrue or arise in Bangladesh, namely:-
 
 
(1) any income which falls under the head “Salaries”, wherever paid if-
 
 
(a) it is earned in Bangladesh; or
 
 
(b) it is paid by the Government or a local authority in Bangladesh to a citizen of Bangladesh in the service of such Government or authority;
 
 
127[(2) any income accruing or arising, whether directly or indirectly , through or from-
 
(a) any permanent establishment in Bangladesh; or
 
(b) any property, asset, right or other source of income, including intangible property, in Bangladesh; or
 
(c) the transfer of any assets situated in Bangladesh; or
 
(d) the sale of any goods or services by any electronic means to purchasers in Bangladesh; or
 
(e) any intangible property used in Bangladesh.
 
Explanation.- For the purpose of clause (2)-
 
(a) the shares of any company which is a resident in Bangladesh shall be deemed to be property in Bangladesh;
 
(b) intangible property shall be deemed to be property in Bangladesh if it is-
 
(i) registered in Bangladesh; or
 
(ii) owned by a person that is not a resident of Bangladesh but has a permanent establishment in Bangladesh to which the intangible property is attributed;
 
 
(c) the transfer of any share in a company that is not a resident of Bangladesh shall be deemed to be the transfer of an asset situated in Bangladesh to the extent that the value of the share transferred is directly or indirectly attributable to the value of any assets in Bangladesh;]
 
 
(3) any dividend paid outside Bangladesh by a Bangladeshi company;
 
 
(4) any income by way of interest payable-
 
 
(a) by the Government; or
 
 
(b) by a person who is a resident, except where the interest is payable in respect of any debt incurred, or moneys borrowed and used, for the purposes of a business or profession carried on by such person outside Bangladesh or for the purpose of making or earning any income from any source outside Bangladesh; or
 
 
(c) by a person who is a non-resident where the interest is in respect of any debt incurred, or moneys borrowed and used for the purposes of a business or profession carried on by such person in Bangladesh or for the purposes of making or earning any income from any source in Bangladesh;
 
 
(5) any income by way of fees for technical services payable-
 
 
(a) by the Government; or
 
 
(b) by a person who is a resident, except where such fees are payable in respect of services utilised in a business or profession carried on by any such person outside Bangladesh or for the purposes of making or earning any income from any source outside Bangladesh; or
 
 
(c) by a person who is a non-resident where such fees are payable in respect of services utilised in a business or profession carried on by such person in Bangladesh or for the purposes of making or earning any income from any source in Bangladesh;
 
 
(6) any income by way of royalty payable-
 
 
(a) by the Government; or
 
 
(b) by a person who is a resident, except where the royalty is payable in respect of any right, property or information used or services utilised for the purposes of a business or profession carried on by such person outside Bangladesh or for the purposes of making or earning any income from any source outside Bangladesh; or
 
 
(c) by a person who is a non-resident where the royalty is payable in respect of any right, property or information used or services utilised for the purposes of a business or profession carried on by such person in Bangladesh or for the purposes of making or earning any income from any source in Bangladesh.
Un-explained investments, etc., deemed to be income

19. (1) Where any sum is found credited in the books of an assessee maintained for any income year and the assessee offers no explanation about the nature and source thereof, or the explanation offered is not, in the opinion of the Deputy Commissioner of Taxes, satisfactory, the sum so credited shall be deemed to be his income for that income year classifiable under the head “Income from other sources”.

 

(2) Where, in any income year, the assessee has made investments or is found to be the owner of any bullion, jewellery or other valuable article and the Deputy Commissioner of Taxes finds that the amount expended on making such investments or in acquiring such bullion, jewellery or other valuable article exceeds the amount recorded in this behalf in the books of account maintained by the assessee for any source of income and the assessee offers no explanation about the excess amount or the explanation offered is not, in the opinion of the Deputy Commissioner of Taxes, satisfactory, the excess amount shall be deemed to be the income of the assessee for such income year classifiable under the head “Income from other sources”.

 

(3) Where, in any income year, the assessee has incurred any expenditure and he offers no explanation about the nature and source of the money for such expenditure, or the explanation offered is not in the opinion of the Deputy Commissioner of Taxes, satisfactory, the amount of the expenditure shall be deemed to be the income of the assessee for such income year classifiable under the head “Income from other sources”.

 

(4) Where, in the financial year immediately preceding the assessment year, the assessee has made investments which are not recorded in the books of account, if any, maintained by him for any source of income, and the assessee offers no explanation about the nature and source of fund for the investments, or the explanation offered is not, in the opinion of the Deputy Commissioner of Taxes, satisfactory, the value of the investments shall be deemed to be the income of the assessee for such financial year classifiable under the head “Income from other sources”.

 

(5) Where, in the financial year immediately preceding the assessment year, the assessee is found to be the owner of any money, bullion, jewellery or other valuable article which is not recorded in the books of account, if any, maintained by him for any source of income, and the assessee offers no explanation about the nature and source of fund for the acquisition of the money, bullion, jewellery or other valuable article, or the explanation offered is not, in the opinion of the Deputy Commissioner of Taxes, satisfactory, the money or the value of the bullion, jewellery or other valuable article, shall be deemed to be the income of the assessee for such financial year classifiable under the head “Income from other sources”.

 

(6) Any income derived by an assessee in any income year (hereinafter in this sub-section referred to as the said income year) from any business or profession, which has been or was, discontinued at any time before the commencement, or during the courses, of the said income year shall, if such income would have been chargeable to tax if it had been received in the income year in which it accrued or arose, be deemed to be income chargeable to tax from such business or profession which shall, for the purposes of this Ordinance, be deemed to have been carried on before the commencement, or during the course, of the said income year.

 

(7) Any dividend declared or distributed by a company shall be deemed to be the income of the 128[ income year in which it is received] and shall be included in the total income of the assessee of that year.

 

(8) Where any assets, not being stock-in-trade 129[***], are purchased by an assessee from any company and the Deputy Commissioner of Taxes has reason to believe that the price paid by the assessee is less than the fair market value thereof, the difference between the price so paid and the fair market value thereof, the difference between the price so paid and the fair market value shall be deemed to be income of the assessee classifiable under the head “Income from other sources”.

 

(9) Where any lump sum amount is received or receivable by an assessee during any income year on account of salami or premia receipts by virtue of any lease, such amount shall be deemed to be income of the assessee of the income year in which it is received and classifiable under the head “Income from other sources”:

 

Provided that at the option of the assessee such amount may be allocated for the purpose of assessment proportionately to the years covered by the entire lease period, but such allocation shall in no case exceed five years.

 

(10) Where any amount is received by an assessee during any income year by way of goodwill money or receipt in the nature of compensation or damages for cancellation or termination of contracts and licences by the Government or any person, such amount shall be deemed to be the income of such assessee for that income year classifiable under the head “Income from other sources”.

 

(11) Where any benefit or advantage, whether convertible into money or not, is derived by an assessee during any income year on account of cancellation of indebtedness 130[ * * *], the money value of such advantage or benefit shall be deemed to be his income for that income year classifiable under the head “Income from other sources” 131[ :

 

132[ Provided that the provisions of this sub-section shall not apply in case of a loan or interest waived in respect of an assessee by a commercial bank including Bangladesh Krishi Bank, Rajshahi Krishi Unnayan Bank, 133[ Bangladesh Development Bank Ltd.], or a leasing company or a financial institution registered under আর্থিক প্রতিষ্ঠান আইন, ১৯৯৩ (১৯৯৩ সনের ২৭ নং আইন) 134[ :

 

Provided further that the provisions of this sub-section shall not apply in case of a benefit or advantage, of an assessee being an individual, not exceeding taka ten lakh resulting from the waiver of margin loan or interest thereof by a holder of Trading Right Entitlement Certificate (TREC) as defined under এক্সচেঞ্জেস ডিমিউচ্যুয়ালাইজেশন আইন, ২০১৩ (২০১৩ সনের ১৫ নং আইন) in respect of the assessee’s investment in shares, debentures, mutual funds or securities transacted in the stock exchange;]

 

(12) Any managing agency commission including compensation received during any income year by an assessee for termination of agencies or any modification of the terms and conditions relating thereto shall be deemed to be his income for that income year classifiable under the head “Income from other sources”.

 

(13) Any amount received by an assessee during any income year by way of winnings from lotteries, crossword puzzles, card games and other games of any sort or from gambling or betting in any form or of any nature whatsoever shall be deemed to be his income for that income year classifiable under the head “Income from other sources”.

 

(14) Any profits and gains derived in any income year from any business of insurance carried on by a mutual insurance association computed in accordance with the provisions of paragraph 8 of the Fourth Schedule shall be deemed to be the income of such association for that income year.

 

(15) Where, for the purpose of computation of income of an assessee under section 28, any deduction has been made for any year in respect of any loss, bad debt, expenditure or trading liability incurred by the assessee, and-

 

(a) subsequently, during any income year, the assessee has received 135[ except as provided in clause (aa)], whether in cash or in any other manner whatsoever, any amount in respect of such loss, bad debt, or expenditure, the amount so received shall be deemed to be his income from business or profession during that income year;

 

136[ (aa) such amount on account of any interest which was to have been paid to any commercial bank or the 137[ Bangladesh Development Bank Ltd].or on account of any share of profit which was to have been paid to any bank run on Islamic principles and which was allowed as a deduction in respect of such expenditure though such interest or share of profit was not paid by reason of the assessee having maintained his accounts on mercantile basis, within 138[ three years] after expiry of the income year in which it was allowed, shall, to such extent as it remains unpaid, be deemed to be income of the assessee from business or profession during the income year immediately following the expiry of the said 139[ three years;]

 

(b) the assessee has derived, during any income year, some benefit in respect of such trading liability, the value of such benefit, if it has not already been treated as income under clauses (c), shall be deemed to be his income from business or profession during that income year;

 

(c) such trading liability or portion thereof as has not been paid within three years of the expiration of the income year in which deduction was made in respect of the liability, such liability or portion, as the case may be, shall be deemed to be the income of the assessee from business or profession during the income year immediately following the expiry of the said three years;

 

and the business or profession in respect of which such allowance or deduction was made shall, for the purposes of section 28, be deemed to be carried on by the assessee in that year:

 

140[ Provided that where any interest or share of profit referred to in clause (aa) or a trading liability referred to in clause (c) is paid in a subsequent year, the amount so paid shall be deducted in computing the income in respect of that year.]

 

(16) Where any building, machinery or plant having been used by an assessee for purpose of any business or profession carried on by him is disposed of during any income year and the sale proceeds thereof exceeds the written down value, so much of the excess as does not exceed the difference between the original cost and the written down value shall be deemed to be the income of the assessee for that income year classifiable under the head “Income from business or profession”.

 

(17) Where any machinery or plant exclusively used by an assessee for agricultural purposes has been disposed of in any income year and the sale proceeds thereof exceeds the written down value, so much of the excess as does not exceed the difference between the original cost and the written down value shall be deemed to be the income of the original cost and the written down value shall be deemed to be the income of the assessee for that income year classifiable under the head “Agricultural income”.

 
 

(18) Where any insurance, salvage or compensation moneys are received in any income year in respect of any building, machinery or plant which having been used by the assessee for the purpose of business or profession is discarded, demolished or destroyed and the amount of such moneys exceed the written down value of such building, machinery or plant, so much of the excess as does not exceed the difference between the original cost and the written down value less the scrap value shall be deemed to be the income of the assessee for that income year classifiable under the head “Income from business or profession”.

 

(19) Where any insurance, salvage or compensation moneys are received in any income year in respect of any machinery or plant which having been used by the assessee exclusively for agricultural purpose is discarded, demolished or destroyed and the amount of such moneys exceed the written down value of such machinery or plant, so much of the excess as does not exceed the difference between the original cost and the written down value less the scrap value shall be deemed to be the income of the assessee for that income year classifiable under the head “Agricultural income”.

 

(20) Where an asset representing expenditure of a capital nature on scientific research within the meaning of section 29 (1) (xx) is disposed of during any income year, so much of the sale proceeds as does not exceed the amount of the expenditure allowed under the said clause shall be deemed to be the income of the assessee for that income year classifiable under the head “Income from business or profession”.

 

Explanation 1.- For the purposes of this sub-section and sub-sections (16) and (17), “sale proceeds” shall have the same meaning as in the Third Schedule.

 

Explanation 2.- For the purposes of this sub-section and sub-sections (16) and (18), the business or profession in which the building, machinery, plant or assets, as the case may be, was used before its disposal, shall be deemed to be carried on by the assessee during the income year in which such disposal takes place.

 
 

141[ 142[ (21) Where any sum is claimed or shown to have been received as loan 143[, advance or deposit of any kind called by whatever name,] or gift by an Assessee otherwise than by a bank transfer, the amount so received shall be deemed to be the income of such Assessee for the income year in which such loan 144[, advance or deposit of any kind called by whatever name,] or gift was received, and shall be classifiable under the head “Income from other sources”:

 

Provided that-

 

(a) where a loan or part thereof, which was deemed as the income under this sub-section and included in the total income of the Assessee, is repaid 145[or converted into consideration for any goods or services] in a subsequent income year, the amount so repaid 146[or converted into consideration for any goods or services] shall be deducted in computing the income of the Assessee for that income year;

 

(b) a loan shall not be deemed to be an income under this sub-section if the loan is taken from a banking company or a financial institution;

 

(c) a loan or a gift received by an Assessee, being an individual, shall not be deemed to be the income under this sub-section, if-

 

(i) the aggregate amount of such loan or gift received in an income year does not exceed five lakh taka; or

 

(ii) the loan or the gift is received from spouse or parents of the Assessee, and a banking channel or a formal channel is involved in the process of such loan or gift.

 

Explanation.- In this sub-section, “bank transfer”, in relation to a loan or a gift, means transfer from the account of the giver to the account of the receiver, and such accounts are maintained in a bank or a financial institution legally authorised to operate accounts.]

 

147[ ***]

 

148[ ***]

 

(22) Where an assessee, being the owner of a house property, receives from any person to whom such house property or any part thereof is let out any amount which is not adjustable against the rent payable, the amount so received shall be deemed to be income of the assessee for the income year in which it is received and be classifiable under the head “income from house property”:

 

Provided that at the option of the assessee such amount may be allocated, for the purpose of assessment in equal proportion to the year in which such amount is received and the four years next following:

 

Provided further that where such amount or part thereof is refunded by the assessee in a subsequent income year the amount so refunded shall be deducted in computing the income of the assessee in respect of that income year.

 

149[(22A) Where an assessee, being the owner of a house property, recieved, from any person to whom such house property or any part thereof is let out, any amount exceeding taka 2 lakh other than bank transfer which is adjustable against the rent receivable, the amount shall be deemed to be the “Income from house property” of the assessee for the income year in which it is received:

Provided that where such amount is received through bank transfer, the amount shall be adjusted within five years after the year of receipt or the period of agreement whichever is lower, if after the expiry of the aforesaid period such amount or any part thereof remains unadjusted, the amount remained so unadjusted shall be deemed to be the “Income from house property” of the assessee in the income year in which such amount remains unadjusted.]

Explanation.¾In this sub-section, “bank transfer” means transfer from the account of the giver to the account of the receiver, and such accounts are maintained in a bank or financial institution legally authorised to operate accounts.]]

 

(23) Where during any income year an assessee, being an exporter of garments, transfers to any person, the export quota or any part thereof allotted to him by the Government, such portion of the export value of the garments exportable against the quota so transferred as may be prescribed for this purpose shall be deemed to be income of the assessee for that income year, classifiable under the head “Income from business or profession”.]

 

150[ 151[ (24) Where a company, not listed with any stock exchange, receives paid up capital from any shareholder during any income year in any other mode excepting by crossed cheque or bank transfer, the amount so received as paid up capital shall be deemed to be the income of such company for that income year and be classifiable under the head "Income from other sources".]

 

152[ ***]]

 

153[ 154[ ***]

 

(27) Where an assessee, being a company, purchases directly or on hire one or more motor car or jeep and value of any motor car or jeep exceeds ten percent of its 155[ paid up capital together with reserve and accumulated profit], then fifty percent of the amount that exceeds such ten percent of the 156[ paid up capital together with reserve and accumulated profit] shall be deemed to be the income of such assessee for that income year classifiable under the head "Income from other sources".]

 

157[ ***]

 
 

158[ (29) Where an assessee, not being an assessee engaged in real estate business during any income year, purchases on credit any material for the purpose of construction of building or house property or its unit and fails to pay the sum or any part thereof representing the liability in respect of such purchase, the sum or any part thereof, 159[ which has not been paid within two years from the end of the income year in which the purchase was made, shall be deemed to be the income of the assessee for the income year immediately following the expiry of the said two years and be classifiable under the head "Income from other sources”].

 

(30) Where an assessee, in the course of any proceedings under this Ordinance, is found to have any sum or part thereof allowed or deducted but not spent in accordance with the provision of clause (h) of sub-section (1) of section 25 of this Ordinance, such unspent sum or part thereof shall be deemed to be the income of such assessee for that income year classifiable under the head “Income from house property”.

 

160[ (31) Where an assessee files a revised return or an amended return under sections 78, 82BB or 93 and shows in such revised return or amended return any income that is subject to tax exemption or a reduced tax rate 161[or any income derived from the sources mentioned in paragraph 33 of Part A of THE SIXTH SCHEDULE], so much of such income as exceeds the amount shown in the original return shall be deemed to be income of the assesseefor that income year classifiable under the head "Income from other sources.]]

 

162[Explanation.¾For the purpose of this sub-section income that is subject to tax exemption or a reduced tax rate does not include the exclusions from total income as mentioned in PART A of the THE SIXTH SCHEDULE]

 

163[(32) Where any payment made for acquiring any asset or constitutes any asset and tax has not been deducted therefrom in accordance with Chapter VII, such payment shall be deemed to be the income of the person responsible for making the payment under this Ordinance and classifiable under the head “Income from other source” in the income year in which the payment was made.]]

164[Omitted]
165[***]
166[Omitted]
167[***]
[Omitted]
168[Omitted]
19B [Omitted]
169[***]
19BB [Omitted]
170[***]
19BBB [Omitted]
171[***]
19BBBB[Omitted]
172[***]
Special tax treatment in respect of investment in residential building, apartmen

173[19BBBBB. (1) Notwithstanding anything contained in this Ordinance, source of any sum invested by any person, in the construction or purchase of any residential building or apartment shall be deemed to have been explained if the assessee pays, before the assessment for the relevant assessment year in which the investment is completed, tax at the following rate –

(a) for building or apartment situated in the area of Gulshan Model Town, Banani, Baridhara, Motijheel Commercial Area and Dilkusha Commercial Area of Dhaka¾

(i) taka four thousand per square meter in the case of a building or an apartment the plinth area of which does not exceed two hundred square meter;

(ii) taka five thousand per square meter in the case of a building or an apartment the plinth area of which exceeds two hundred square meter;

(b) for building or apartment situated in the area of Dhanmandi Residential Area, Defence Officers Housing Society (DOHS), Mahakhali, Lalmatia Housing Society, Uttara Model Town, Bashundhara Residential Area, Dhaka Cantonment, Kawran Bazar, Bijaynagar, Segunbagicha, Nikunja of Dhaka, and Panchlaish, Khulshi, Agrabad and Nasirabad Area of Chattogram¾

(i) taka three thousand per square meter in the case of a building or an apartment the plinth area of which does not exceed two hundred square meter;

(ii) taka three thousand and five hundred per square meter in the case of a building or an apartment the plinth area of which exceeds two hundred square meter;

(c) for building or apartment situated in the area of any City Corporation other than areas mentioned in clauses (a) or (b)¾

(i) taka eight hundred per square meter in the case of a building or an apartment the plinth area of which does not exceed one hundred and twenty square meter;

(ii) taka one thousand per square meter in the case of a building or an apartment the plinth area of which exceeds one hundred and twenty square meter but does not exceed two hundred square meter;

(iii) taka one thousand and five hundred per square meter in the case of a building or an apartment the plinth area of which exceeds two hundred square meter;

(d) for building or apartment situated in the area of a Paurasabha of any district headquarters¾

(i) taka three hundred per square meter in the case of a building or an apartment the plinth area of which does not exceed one hundred and twenty square meter;

(ii) taka five hundred per square meter in the case of a building or an apartment the plinth area of which exceeds one hundred and twenty square meter but does not exceed two hundred square meter;

(iii) taka seven hundred per square meter in the case of a building or an apartment the plinth area of which exceeds two hundred square meter;

(e) for building or apartment situated in the area other than the areas mentioned in clauses (a) to (d)¾

(i) taka two hundred per square meter in the case of a building or an apartment the plinth area of which does not exceed one hundred and twenty square meter;

(ii) taka three hundred per square meter in the case of a building or an apartment the plinth area of which exceeds one hundred and twenty square meter but does not exceed two hundred square meter;

(iii) taka five hundred per square meter in the case of a building or an apartment the plinth area of which exceeds two hundred square meter;

(2) The rate of tax mentioned in sub-section (1) shall be twenty per cent higher in case where the assessee already owns a building or an apartment in any City Corporation before such investment is completed; or the assessee makes such investment in two or more buildings or apartments.

(3) The rate of tax mentioned in sub-section (1) shall be one hundred per cent higher in case, where¾

(a) a notice under section 93 has been issued before submission of such return of income for the reason that any income, asset or expenditure has been concealed or any income or a part thereof has escaped assessment;

(b) a notice under clause (f) of section 113 has been issued before submission of such return of income;

(c) any proceeding under sections 164, 165 or 166 has been initiated before submission of such return of income.

 (4) The provision of this section shall not apply where the source of such investment, made by the assessee for the construction or purchase of such residential building or apartment, is¾

(a) derived from any criminal activities under any other law for the time being in force; or

 (b) not derived from any legitimate source.] 

Special tax treatment in respect of investment in the purchase of bond under Bangladesh Infrastructure Finance Fund
174[19C.- Notwithstanding anything contained in any other provision of this Ordinance, no question as to the source of any sum invested by any person in the purchase of bond issued or caused to be issued under Bangladesh Infrastructure Finance Fund during the period between the first day of July, 2010 and thirtieth day of June, 2012 (both days inclusive), shall be raised if the assessee pays, before the filing of return of income for the relevant income year, tax at the rate of ten per cent on such sum invested.]
19D [Omitted]
175[* * *]
Voluntary disclosure of income.
176[19E. (1) Notwithstanding anything contained in this Ordinance, any person-
 
(a) who has not been assessed to tax for previous assessment year or years and he has not submitted return of income for those year or years may disclose such income in the respective heads of income in the return of income along with the income for the current assessment year; or
 
(b) who has been assessed to tax for previous assessment year or years and any income has escaped assessment in those assessments or the amount of income assessed is less than the actual income, may disclose that income for respective heads of income in the return of income along with the income for the current assessment year.
 
(2) Return of income mentioned in sub-section (1) shall be treated as valid, if-
 
(a) the assessee pays before the submission of return-
 
(i) tax payable at applicable rate on total income including such income under respective heads of income; and
 
(ii) penalty at the rate of ten percent of tax proportionate to such income under respective heads of income;
 
(b) the return of income is submitted within the time specified in 177[sub-section (5)] of section 75; and
 
(c) a declaration is enclosed with the return of income in respect of the following:
 
(i) name of the person declaring;
 
(ii) head of the declared income and amount thereof; and
 
(iii) amount of tax and penalty paid thereof.
 
(3) The provision of this section shall not apply where-
 
178[(a) a notice under section 93 has been issued before submission of such return of income for the reason that any income, assets or expenditure has been concealed or any income or a part thereof has escaped assessment;]
 
(b) a notice on a banking company under clause (f) of section 113 has been issued before submission of such return of income;
 
(c) any proceeding under sections 164, 165 or 166 has been initiated before submission of such return of income; 179[***]
 
(d) any income declared under this section is-
 
(i) not derived from any legitimate source of income; or
 
(ii) derived from any criminal activities under any other law for the time being in force180[;or
 
(e) any income declared under this section which is –
 
(i) exempted from tax in the concerned income year; or
 
(ii) chargeable to tax at a reduced rate in accordance with section 44 of this Ordinance.
 
(4) The income shown under this section may be invested in any income generating activities or any sector including the following:
 
(a) industrial undertaking including its expansion;
 
(b) balancing, modernization, renovation and extension of an existing industry;
 
(c) building or apartment or land;
 
(d) securities listed with a Stock Exchange in Bangladesh; or
 
(e) any trade, commercial, or industrial venture engaged in production of goods or services.]
 
Special tax treatment in respect of investment in Economic Zones or Hi-Tech Parks

181[19DD.  Notwithstanding anything contained in this Ordinance or any other law for the time being in force, no question shall be raised as to the source of any sum invested in any economic zone declared under section 5 of বাংলাদেশ অর্থনৈতিক অঞ্চল আইন, ২০১০ (২০১০ সনের ৪২ নং আইন)  or in any hi-tech park declared under section 22 of বাংলাদেশ হাই-টেক পার্ক কর্তৃপক্ষ আইন, ২০১০ (২০১০ সনের ৮নং আইন) for setting up industrial undertaking engaged in producing goods or services therein within the period from the first day of July, 2019 and the thirtieth day of June, 2024 (both days inclusive) by a company, if tax at the rate of ten per cent is paid on the sum so invested before filing of the return for the concerned income year.]

Chapter V

COMPUTATION OF INCOME

Heads of income
20. Save as otherwise provided in this Ordinance, all incomes shall, for the purpose of charge of income-tax and computation of total income, be classified and computed under the following heads of income, namely:-
 
 
(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.
Salaries
21. (1) The following income of an assessee shall be classified and computed under the head “Salaries”, namely:-
 
 
(a) any salary due from an employer to the assessee in the income year, whether paid or not;
 
 
(b) any salary paid or allowed to him in the income year, by or on behalf of an employer though not due or before it became due to him; and
 
 
(c) any arrears of salary paid or allowed to him in the income year by or on behalf of an employer, if not charged to income-tax for any earlier income year.
 
 
(2) Where any amount of salary of an assessee is once included in his total income of an income year on the basis that it had become due or that it had been paid in advance in that year, that amount shall not again be included in his income of any other year.
Interest on securities
22. The following income of an assessee shall be classified and computed under the head “Interest on securities”, namely:-
 
 
 
 
(a) interest receivable by the assessee on any security of 182[the Government or any security approved by Government] ; and
 
 
 
 
(b) interest receivable by him on debentures or other securities of money issued by or on behalf of a local authority or a company.
Deductions from interest on securities
23. (1) In computing the income under the head “Interest on securities”, the following allowances and deduction shall be made, namely:-
 
 
(a) any sum deducted from interest by way of commission or charges by a bank realising the interest on behalf of the assessee;
 
 
(b) any interest payable on money borrowed for the purpose of investment in the securities by the assessee 183[:
 
 
Provided that no allowance or deduction on account of any interest or commission paid under clause (a) or (b), as the case may be, in respect of, or allocable to the securities of Government which have been issued with the condition that interest thereon shall not be liable to tax, shall be made in computing the income under section 22.]
 
 
184[* * *]
 
 
(2) Notwithstanding anything contained in sub-section (1), no deduction shall be allowed under this section in respect of any interest payable outside Bangladesh on which tax has not been paid or deducted in accordance with the provisions of Chapter VII.
Income from house property
24. (1) The tax shall be payable by an assessee under the head “Income from house property” in respect of the annual value of any property 185[, whether used for commercial or residential purposes,] consisting of any building 186[,furniture, fixture, fittings etc.] and lands appurtenant thereto of which he is the owner, other than such portions of the property as he may occupy for the purposes of any business or profession carried on by him, the income from which is assessable to tax under this Ordinance.
 
 
 
 
(2) Where any such property as is referred to in sub-section (1) is owned by two or more persons and their respective shares are definite and ascertainable, such persons shall not constitute and shall not be deemed to be, an association of persons; and for the purpose of computation of the income of an assessee in respect of that property, only such part of such income as is proportionate to the share of the assessee shall be reckoned as his income from that property.
Deductions from income from house property
 
25. (1) In computing the income under the head ''Income from house property'' the following allowances and deductions shall be made, namely:-
 
(a) any sum payable to Government as land development tax or rent on account of the land comprised in the property;
 
(b) the amount of any premium paid to insure the property against risk of damage or destruction;
 
187[ * * *]
 
(d) where the property is subject to mortgage or other capital charge for the purpose of extension or reconstruction or improvement, the amount of any interest payable on such mortgage or charge;
 
(e) where the property is subject to an annual charge not being a capital charge, the amount of such charge;
 
Explanation.- The expression ''annual charge'', as used in this clause, includes any tax leviable, in respect of property or income from property, by local authority or Government but does not include the tax leviable under this Ordinance;
 
(f) where the property is subject to a ground rent, the amount of such rent;
 
(g) where the property has been acquired, constructed, repaired, renewed or reconstructed with borrowed capital 188[ from bank or financial institution], the amount of any interest payable on such capital 189[ ;]
 
 
190[ (gg) Where the property has been constructed with borrowed capital 191[ form bank or financial institution] and no income under section 24 was earned from that property during the period of such construction, the interest payable during that period on such capital, in three equal proportionate instalments for subsequent first three years for which income is assessable from that property;]
 
192[ (h) in respect of expenditure for repairs, collection of rent, water and sewerage, electricity and salary of darwan, security guard, pump-man, lift-man and caretaker and all other expenditure related to maintenance and provision of basic services:
 
(i) an amount equal to one-fourth of the annual value of the property where the property is used for residential purpose;
 
(ii) an amount equal to thirty per cent of the annual value of the property where the property is used for commercial purpose.]
 
193[ * * *]
 
(j) where, the whole of the property is let out and it was vacant during a part of the year, a sum equal to such portion of the annual value of the property as is proportionate to the period of the vacancy; and
 
(k) where, the property is let out in parts, a sum equal to such portion of the annual value appropriate to the vacant part as is proportionate to the period of the vacancy of such part.
 
(2) Notwithstanding anything contained in sub-section (1), no deduction shall be allowed under this section in respect of any interest or annual charge payable outside Bangladesh on which tax has not been paid or deducted in accordance with the provisions of Chapter VII.
 
(3) [Omitted by section 7 of অর্থ আইন, ১৯৯৩ (১৯৯৩ সনের ১৮ নং আইন)
Agricultural income
26. (1) The following income of an assessee shall be classified and computed under the head “Agricultural income”, namely:-
 
 
(a) any income derived by the assessee which comes within the meaning of “agricultural income” as defined in section 2(1);
 
 
(b) the excess amount referred to in section 19(17);
 
 
(c) the excess amount referred to in section 19(19).
 
 
(2) Agricultural income derived from the sale of tea grown and manufactured by the assessee shall be computed in the prescribed manner.
 
 
(3) Where the Board, by notification in the official Gazette, so directs, agricultural income from the sale of rubber, tobacco, sugar or any other produce grown and manufactured by the assessee may be computed in the manner prescribed for the purpose.
Deductions from agricultural income
27. (1) In computing the income under the head “Agricultural income”, the following allowances and deductions shall be made, namely:-
 
 
(a) any land development tax or rent paid in respect of the land used for agricultural purposes;
 
 
(b) any tax, local rate or cess paid in respect of the land used for agricultural purposes, if such tax, rate or cess is not levied on the income arising or accruing, or deemed to accrue or arise, from agricultural operations or is not assessed at a proportion or on the basis of such income;
 
 
(c) (i) subject to sub-clauses (ii) and (iii), the cost of production, that is to say, the expenditure incurred for the following purposes, namely:-
 
 
(a) for cultivating the land or raising livestock thereon;
 
 
(b) for performing any process ordinarily employed by a cultivator to render marketable the produce of the land;
 
 
(c) for transporting the produce of the land or the livestock raised thereon to the market; and
 
 
(d) for maintaining agricultural implements and machinery in good repair and for providing upkeep of cattle for the purpose of cultivation, processing or transportation as aforesaid;
 
 
(ii) where books of accounts in respect of agricultural income derived from the land are not maintained, the cost of production to be deducted shall, instead of the expenditure mentioned in sub-clause (i), be sixty per cent of the market value of the produce of the land;
 
 
(iii) no deduction on account of cost of production shall be admissible under this clause if the agricultural income is derived by the owner of the land from the share of the produce raised through any system of sharing of crop generally known as adhi, barga or bhag;
 
 
(d) any sum paid as premium in order to effect any insurance against loss of, or damage to, the land or any crop to be raised from, or cattle to be reared on, the land;
 
 
(e) any sum paid in respect of the maintenance of any irrigation or protective work or other capital assets; and such maintenance includes current repairs and, in the case of protective dykes and embankments, all such work as may be necessary from year to year for repairing any damage or destruction caused by flood or other natural causes;
 
 
(f) a sum calculated at the rate as provided in the Third Schedule on account of depreciation in respect of irrigation or protective work or other capital assets constructed or acquired for the benefit of the land from which agricultural income is derived or for the purpose of deriving agricultural income from the land, if the required particulars are furnished by the assessee;
 
 
(g) where the land is subject to a mortgage or other capital charge for purposes of reclamation or improvement, the amount of any interest paid in respect of such mortgage or charge;
 
 
(h) where the land has been acquired, reclaimed or improved by the use of borrowed capital, the amount of any interest paid in respect of such capital;
 
 
(i) where any machinery or plant which has been used by the assessee exclusively for agricultural purposes has been discarded, demolished or destroyed in the income year, the amount actually written off on that account in the books of accounts of the assessee,-
 
 
(i) subject to the maximum of the amount by which the written down value of the machinery or plant exceeds the scrap value thereof if no insurance, salvage or compensation money has been received in respect of such machinery or plant; and
 
 
(ii) subject to the maximum of the amount by which the difference between the written down value and the scrap value exceeds the amount of insurance, salvage or compensation money received in respect of such machinery or plant;
 
 
(j) where any machinery or plant which has been used by the assessee exclusively for agricultural purposes has been sold or transferred by way of exchange in the income year, the amount actually written off on that account in the books of accounts of the assessee, subject to the maximum of the amount by which the written down value of the machinery or plant exceeds the amount for which it has been actually sold or transferred; and
 
 
(k) any other expenditure, not being in the nature of capital expenditure or personal expenditure, laid out wholly and exclusively for the purpose of deriving agricultural income from the land.
 
 
(2) Notwithstanding anything contained in sub-section (1), no deduction shall be allowed under this section in respect of any interest on which tax has not been paid or deducted in accordance with the provisions of Chapter VII.
Income from business or profession

28. (1) The following income of an assessee shall be classified and computed under the head "Income from business or profession", namely:-

 
 

(a) profits and gains of any business or profession carried on, or deemed to be carried on, by the assessee at any time during the income year;

 
 

(b) income derived from any trade or professional association or other association of like nature on account of specific services performed for its members;

 
 

(c) value of any benefit or perquisite, whether convertible into money or not, arising from business or the exercise of a profession;

 
 

(d) the amount, the value of the benefit and the trading liability referred to in section 19(15);

 
 

(e) the excess amount referred to in section 19(16);

 
 

(f) the excess amount referred to in section 19(18);

 
 

(g) the sale proceeds referred to in section 19(20) 194[;

 
 

(h) the amount of income under section 19 (23)]

 
 

Explanation.- Where speculative transactions carried on by an assessee are of such a nature as to constitute a business, the business (hereinafter referred to as "speculation business") shall be deemed to be distinct and separate from any other business.

 
 

(2) Notwithstanding anything contained in this Ordinance,-

 
 

(a) the profits and gains of any business of insurance and the tax payable thereon shall be computed in accordance with the provisions of the Fourth Schedule;

 
 

(b) the profits and gains from the exploration and production of petroleum (including natural gas) and the tax payable thereon shall be computed in accordance with the provisions of Part A of the Fifth Schedule;

 
 

(c) the profits and gains of any business which consists of, or includes, the exploration and extraction of such mineral deposits of a wasting nature (not being petroleum and natural gas) as may be specified in this behalf by the Government, carried on by an assessee in Bangladesh shall be computed in accordance with the provisions of Part B of the Fifth Schedule.

 
 

195[(3) Notwithstanding anything to the contrary contained in any other provisions of the Ordinance, in the case of 196[Bangladesh Development Bank Ltd] 197[, Investment Corporation of Bangladesh 198[,any financial institution]] and any commercial bank including the Bangladesh Krishi Bank and Rajshahi Krishi Unnayan Bank, the income by way of interest in relation to such categories of bad or doubtful debts as the Bangladesh Bank may classify in the income year in which it is credited to its profit and loss account for that year or, as the case may be, in which it is actually received whichever is earlier.]

Deductions from income from business or profession
29. (1) In computing the income under the head "Income from business or profession", the following allowances and deductions shall be allowed, namely:-
 
 
(i) the amount of any rent paid for the premises in which the business or profession is carried on:
 
 
Provided that if a substantial part of the premises is used by the assessee as a dwelling-house, the amount shall be a proportionate part of the rent having regard to the proportionate annual value of the part so used;
 
 
(ii) the amount paid for the repair of the hired premises in which the business or profession is carried on if the assessee has undertaken to bear the cost of such repair:
 
 
Provided that if a substantial part of the premises is used by the assessee as a dwelling-house, the amount shall be a proportionate part of the sum paid for such repair having regard to the proportionate annual value of the part so used;
 
 
(iii) the amount of any interest paid or any profit shared with a bank run on Islamic principles in respect of capital borrowed for the purposes of the business or profession:
 
 
Provided that if any part of such capital relates to replenishing the cash or to any other asset transferred to 199[any other entity, when lending of money is not the business of transfer or], the amount shall be proportionate part of the interest so paid or the profit so shared having regard to the proportion of such capital so used;
 
 
(iv) any sum paid or credited to any person maintaining a profit and loss sharing account or deposit with a bank run on Islamic principles by way of distribution of profits by the said bank in respect of the said account of deposit;
 
 
(v) an amount not exceeding 200[five per cent] of the total income carried to any special reserve created by such financial institution and for such purposes as may be approved by the Government in this behalf, if the aggregate amount standing in such reserve does not exceed the paid up share capital of the institution;
 
 
(vi) the amount paid on account of current repairs to buildings, machinery, plant or furniture used for the purpos
 
 
(vii) the whole or the proportionate part of the amount of any premium paid for insurance, against risk of damage, destruction or loss of buildings, machinery, plant or furniture, stocks or stores according as the whole or part thereof is used for the purposes of the business or profession;
 
 
(viii) in respect of depreciation of building, machinery, plant or furniture, being the property of the assessee 201[or bridge or road or fly over owned by a physical infrastructure undertaking] and used for the purposes of business or profession, the allowances as admissible under the Third Schedule;
 
 
202[(viiia) in respect of amortization of license fees as admissible under the Third Schedule;]
 
 
(ix) in the case of a ship, being a passenger vessel plying ordinarily on inland waters, or a fishing trawler, which is entitled to a special depreciation allowance under paragraph 8 of the Third Schedule, an investment allowance of an amount equivalent to twenty per cent of the original cost to the assessee for the year in which the ship or the trawler is first put to use for public utility;
 
 
203[* * *]
 
 
204[* * *]
 
 
(xi) where any building, machinery 205[, plant or any other fixed asset not being imported software] which, after having been used by the assessee for the purpose of his business, has been discarded, demolished or destroyed in any income year or any such asset has been sold, transferred by way of exchange or compulsorily acquired by a legally competent authority or exported outside Bangladesh in any income year, an obsolescence allowance to the extent and computed in the manner specified in paragraph 10 of the Third Schedule;
 
 
((xii) in the case of any animal which has been used by the assessee for the purpose of business or profession otherwise than as stock-in-trade, has died or become permanently useless for such purpose, an amount equivalent to the difference between the original cost of the animal to the assessee and the sum, if any, realised by sale or other disposition of the carcass, as the case may be, of the animal;
 
 
(xiii) any sum paid on account of land development tax or rent, local rates or municipal taxes in respect of such premises or part thereof as is used by the assessee for the purpose of business or profession;
 
 
(xiv) any sum paid in the income year to an employee as bonus or commission for services rendered where such sum would not have been payable to him as profits or dividend if it had not been paid as bonus or commission and is reasonable with reference, except in the case of payment of festival bonus, to-
 
 
(a) the general practice in similar business or profession,
 
 
(b) the profits of the business or profession in that year, and
 
 
(c) the pay and other conditions of service of the employee.
 
 
206[* * *]
 
 
(xv) the amount of any debt or part thereof which is established to have become irrecoverable and has actually been written off as such in the books of accounts of the assessee for the income year if the debt or part thereof has been taken into account in computing the income of the assessee of that income year or an earlier income year and, in the case of the business of banking or money-lending carried on by the assessee, represents money lent in the ordinary course of business;
 
 
(xvi) where any amount of debt or part thereof which has actually been written off as irrecoverable in the books of accounts of the assessee in any income year but has not been allowed on the ground that it has not then become irrecoverable, so much of such debt or part thereof as has been established to have become irrecoverable in any subsequent income year shall be allowed as a deduction in that income year;
 
 
(xvii) where any such debt or part thereof is written off as irrecoverable in the books of accounts of the assessee for an income year and the Deputy Commissioner of Taxes is satisfied that such debt or part thereof became irrecoverable in an earlier income year not falling beyond a period of four years immediately preceding the income year in which it was written off, the Deputy Commissioner of Taxes may, notwithstanding anything contained in this Ordinance, allow such debt or part thereof as a deduction for such earlier income year if the assessee accepts such finding of the Deputy Commissioner of Taxes and re-compute the total income of the assessee for such earlier income year and make the necessary amendment; and the provisions of section 173 shall, so far as may be, apply thereto the period of four years referred to in 207[the proviso of sub-section (1)] of that section being reckoned from the end of the year in which the assessment relating to the income year in which the debt or part thereof is written off was made;
 
 
208[* * *]
 
 
209[(xviiia) in respect of provision for bad and doubtful debt made by 210[Bangladesh Development Bank Ltd] for overdue loan, a sum equal to five per cent of such overdue loan or the amount of actual provision for such bad or doubtful debt in the books of the assessee, whichever is the less:
 
 
Provided that the deduction shall be allowed only in respect of the assessment years 1987-88, 1988-89, 1989-90 and 1990-91:
 
 
Provided further that if any amount out of the amount so allowed is ultimately recovered, the same shall be deemed to be a profit of the year in which it is recovered;]
 
 
211[(xviiiaa) in respect of provision for bad and doubtful debt and interest thereon made by a commercial bank including the Bangladesh Krishi Bank 212[, Karmo shongsthan Bank] and the Rajshahi Krishi Unnayan Bank, a sum equal to 213[one per cent] of the total outstanding loan including interest thereon or the amount of actual provision for such bad or doubtful debt and interest thereon in the books of the assessee, whichever is less:
 
 
Provided that the provisions of this clause shall apply only in respect of such loan as the Bangladesh Bank may, from time to time, classify as bad or doubtful debt:
 
 
214[Provided further that the deduction shall be allowed only in respect of the assessment years 1990-91, 1991-92, 1992-93, 1993-94, 1994-95 215[,1995-96, 1996-97, 1997-98, 1998-99] 216[, 1999-2000, 2000-2001 217[, 2001-2002, 2002-2003, 2003-2004 218[, 2004-2005, 2005-2006 and 2006-2007]]:
 
 
Provided further that if any amount out of the amount so allowed is ultimately recovered, the same shall be deemed to be a profit of the year in which it is recovered 219[:
 
 
Provided further that no deduction under this clause shall be allowed in respect of-
 
 
(a) any amount representing grant allowed by the Government in the form of 15-year Special Treasury Bonds;
 
 
(b) any loan advanced to any Government organisation, body corporate, local authority, autonomous body, or any other loan guaranteed by the Government; and
 
 
(c) any debt representing loans advanced to any director of the bank, his nominees or dependants 220[;
 
 
[* * *]]]
 
 
(xix) any expenditure, not being in the nature of capital expenditure, laid out or expended on scientific research in Bangladesh related to the business carried on by the assessee;
 
 
(xx) any expenditure of a capital nature laid out or expended on scientific research in Bangladesh related to the business carried on by the assessee:
 
 
Provided that where a deduction is allowed for any income year under this clause in respect of expenditure represented wholly or partly by any asset, no deduction shall be allowed under clause (viii) or (ix) for the same income year in respect of that asset;
 
 
(xxi) any sum paid to a scientific research institute, association or other body having as its object the undertaking of scientific research, or to a University, College, Technical School or other Institution for the purpose of scientific research or technical training related to the class of business carried on by the assessee, if such Institute, association or body, or such University, College, Technical School or Institution is, for the time being, approved by the Board for the purpose of this clause.
 
 
Explanation.- In this clause and in clauses (xix) and (xx),-
 
 
(a) "scientific research" means any activities in the field of natural or applied science for the extension of knowledge;
 
 
(b) references to expenditure incurred on scientific research do not include any expenditure incurred in the acquisition of rights in, or arising out of, scientific research, but save as aforesaid, include all expenditure incurred for the prosecution of, or the provision of facilities for the prosecution of, scientific research;
 
 
(c) reference to scientific research related to a business or class of business includes-
 
 
(i) any scientific research which may lend to or facilitate an extension of that business or, as the case may be, all businesses of that class;
 
 
(ii) any scientific research of a medical nature which has a special relation to the welfare of workers employed in that business or, as the case may be, business of that class;
 
 
(xxii) any expenditure, not being in the nature of capital expenditure, laid out or expended on any educational institution or hospital established for the benefit of the employees of the assessee, their families and dependents or on the training of industrial workers, if-
 
 
(a) no charge is made for services rendered by such institution or hospital or for the training of the workers; and
 
 
(b) no deduction or allowance is claimed for such expenditure under any other clause of this section;
 
 
(xxiii) any expenditure in the nature of capital expenditure laid out or expended on the construction and maintenance of any educational institution or hospital established by the assessee for the benefit of his employees, their families and dependents, or on any institute for the training of industrial workers, if-
 
 
(a) no charge is made for the services rendered by such institution or hospital or for the training of the workers; and
 
 
(b) no deduction or allowance is claimed under any other clause of this section for the same income year in respect of expenditure represented either wholly or partly by any asset;
 
 
(xxiv) any expenditure laid out or expended on the training of citizens of Bangladesh in connection with a scheme approved by the Board for purposes of this clause;
 
 
(xxv) any expenditure, not being in the nature of capital expenditure or personal expenses, incurred by an assessee in connection with visits abroad as a member of a trade delegation sponsored by the Government;
 
 
(xxvi) any sum paid on account of annual membership subscription to a registered trade organisation within the meaning of the Trade Organisations Ordinance, 1961(XLV of 1961), or to a professional institution recognised by the Board in this behalf;
 
 
(xxvii) any expenditure, not being in the nature of capital expenditure or personal expenses of the assessee, laid out or expended wholly and exclusively for the purpose of the business or profession of the assessee.
 
 
(2) Where any premises, building, machinery, plant or furniture is not wholly used for the purposes of business or profession, any allowance or deduction admissible under this section shall be restricted to the fair proportional part of the amount which would be allowable if such premises, building, machinery, plant or furniture was wholly so used.
 
 
Explanation.- For the purposes of this section, the expression "plant" includes ships, vehicles, books, scientific apparatus and surgical and other instruments or equipments used for the purpose of business or profession.
Deduction not admissible in certain circumstances

30. Notwithstanding anything contained in section 29, no deduction on account of allowance from income from business or profession shall be admissible in respect of the following, namely:-

 

(a) any payment which is an income of the payee classifiable under the head "Salaries" if tax thereon has not been paid in accordance with provisions of Chapter VII;

 

221[ (aa) any payment made by an assessee to any person if tax thereon has not been deducted and credited in accordance with the provisions of Chapter VII 222[ ***],]

 

223[ (aaa) any payment by way of salary to an employee if the employee is required to obtain a twelve-digit Taxpayer’s Identification Number under the provisions of this Ordinance but fails to obtain the same at the time of making such payment;]

 
 

224[ (aaaa) any payment made by way of salary to an employee for whom the statement under section 108A was not provided;]

 

(b) any payment by way of interest, salary, commission or remuneration made by a firm or an association of persons to any partner of the firm or any member of the association, as the case may be;

 

(c) any payment by way of brokerage or commission made to a person who is not a resident in Bangladesh unless tax has been deducted therefrom under section 56;

 

(d) any payment to a provident fund or other fund established for the benefit of the employees unless the employer has made effective arrangements to secure that tax shall be deducted at source from any payments made from the fund which are taxable being income falling under the head "Salaries";

 

225[ (e) so much of the expenditure by an assessee on the provision of perquisites, as defined in clause (45) of section 2, to any employee as exceeds taka 226[ 227[ five lakh and fifty thousand] and to any employee who is a person with disability, as exceeds taka twenty five lakh]:

 

Provided that the provision of this clause shall not be applicable to an employer where perquisites were paid to an employee in pursuance of any Government decision published in the official Gazette to implement the recommendation of a Wage Board constituted by the Government;]

 

(f) any expenditure in respect of the following as is in excess of the amount or rate prescribed in this behalf and as is not, in the cases of sales and services liable to excise duty, supported by excise stamp or seal, namely:-

 

(i) entertainment;

 

(ii) foreign travels of employees and their dependents for holidaying and recreation;

 

228[***] and

 

(iv) distribution of free samples;

 

229[ (g) any expenditure exceeding ten per cent of the 230[ net profit disclosed in the statement of accounts] 231[ by way of head office or intra-group expense, called by whatever name,] by a company, not incorporated in Bangladesh under কোম্পানী আইন, ১৯৯৪ (১৯৯৪ সালের ১৮ নং আইন);

 

232[ (h) so much of the expenditure or aggregate of the expenditure by an assesse by way of royalty, technical services fee, technical know how fee or technical assistance fee or any fee of similar nature, as exceeds the following:

 
 
 
 
 

(i) For the first three income years from the commencement of the business or profession

 

Ten percent (10%) of the net profit disclosed in the statement of accounts;

 

(ii) For subsequent income years
 

Eight percent (8%) of the net profit disclosed in the statement of accounts;”।

]];

 

(i) any payment by way of salary or remuneration madeotherwise than by crossed cheque or bank transfer by a person to any employee having gross monthly salary of taka fifteen thousand or more;

 

(j) any expenditure by way of incentive bonus exceeding ten per cent of the 233[ net profit disclosed in the statement of accounts];

 

(k) any expenditure by way of overseas traveling exceeding [one point two five percent (1.25%)] of the disclosed turnover 234[ 235[ :

 

Provided that nothing of this clause shall apply to the overseas traveling expenses by an assessee engaged in providing any service to the Government where overseas traveling is a key requirement of that service;]

 

(l) any payment by way of commission paid or discount made to its shareholder director by a company;

 

(m) any payment by a person exceeding taka fifty thousand or more, otherwise than by a crossed cheque or bank transfer excluding-

 

(i) payment for the purchase of raw materials;

 

(ii) salary or remuneration made to any employee, without prejudice to an obligation referred to in clause (i) ;

 

(iii) any payment for government obligation 236[ ;

 

(n) any payment by way of any rent of any property, whether used for commercial or residential purposes, otherwise than by a crossed cheque or bank transfer 237[ ;

 

(o) any payment made to a person who is required to obtain a twelve-digit Taxpayer’s Identification Number under clauses (xxviii), (xxix) and (xxx) of sub-section (3) of section 184A but fails to hold the same at the time of payment.]]]]

Provision for disallowance
238[30A. Notwithstanding anything contained in sections 28, 29 and 30, the Deputy Commissioner of Taxes shall not make any disallowance or deduction for any year from any claim made by an assessee in the trading account or profit or loss account without specifying reason for such disallowance or deduction.]
Treatment of disallowances

239[30B.  Notwithstanding anything contained in section 82C or any loss or profit computed under the head “Income from business or profession”, the amount of disallowances made under section 30 shall be treated separately as “Income from business or profession” and the tax shall be payable thereon at the regular rate.]

Capital gains
31. Tax shall be payable by an assessee under the head “Capital gains” in respect of any profits and gains arising from the transfer of a capital asset and such profits and gains shall be deemed to be the income of the income year in which the transfer took place. 240[***]
Computation of capital gains
32. (1) The income under the head “Capital gains” shall be computed after making the following deduction from the full value of the consideration received or accruing from the transfer of the capital asset or the fair market value thereof, whichever is higher, namely:-
 
(a) any expenditure incurred solely in connection with the transfer of the capital asset; or
 
(b) the cost of acquisition of the capital asset and any capital expenditure incurred for any improvements thereto but excluding any expenditure in respect of which any allowance is admissible under any provisions of sections 23, 29 and 34.
 
(1A) [Omitted by section 4 of অর্থ আইন, ১৯৯৬ (১৯৯৬ সনের ১৮ নং আইন).]
 
(2) For the purpose of this section, “cost of acquisition of the capital asset” means-
 
(i) where it was acquired by the assessee by purchase, the actual cost of acquisition; and
 
(ii) where it became the property of the assessee-
 
241[ * * *]
 
242[ 243[ * * *]
 
(cc) under a deed of gift, bequest or will; or
 
(ccc) under a transfer on a revocable or irrevocable trust; or]
 
(d) on any distribution of capital assets on the liquidation of a company; or
 
(e) on any distribution of capital assets on the dissolution of a firm or other association of persons or the partition of a Hindu undivided family;
 
the actual cost of acquisition to the previous owner of the capital asset as reduced by the amount of depreciation, if any, allowed to the previous owner; and where the actual cost of acquisition to the previous owner cannot be ascertained, the fair market value at the date on which the capital asset became the property of the previous owner:
 
Provided that where the capital asset is an asset in respect of which the assessee has obtained depreciation allowance in any year, the cost of acquisition of the capital asset to the assessee shall be its written down value increased or diminished, as the case may be, by any adjustment made under section 19(16) or (17) or section 27(1)(j) or section 29(1) (xi) 244[ :
 
245[ * * *]]
 
246[ Provided further that where the capital asset became the property of the assessee by succession, inheritance or devolution, the actual cost of acquisition of the capital asset to the assessee shall be the fair market value of the property prevailing at the time the assessee became the owner of such property.]
 
(3) Where in the opinion of the Deputy Commissioner of Taxes the fair market value of a capital asset transferred by an assessee as on the date of transfer exceeds the full value of the consideration declared by the assessee by an amount of not less than fifteen per cent of the value so declared, the fair market value of the capital asset shall be determined with the previous approval of the Inspecting Joint Commissioner.
 
(4) Where in the opinion of the Deputy Commissioner of Taxes the fair market value of a capital asset transferred by an assessee as on the date of the transfer exceeds the declared value thereof by more than twenty-five per cent of such declared value, the Government may offer to buy the said asset in such manner as may be prescribed.
 
(5) Notwithstanding anything contained in this section or section 31, where a capital gain arises from the transfer of a capital asset which immediately before the date on which the transfer took place was being used by the assessee for the purposes of his business or profession and the assessee has, within a period of one year before or after that date, purchased a new capital asset for the 247[ * * *] purposes of his business or profession, then, instead of the capital gain being charged to tax as income of the income year in which the transfer took place, it shall, if the assessee so elects in writing before the assessment is made, be dealt with in accordance with the following provisions of this sub-section, that is to say-
 
(a) if the amount of the capital gains is greater than the cost of acquisition of the new asset,-
 
(i) the difference between the amount of the capital gain and the cost of acquisition of the new asset shall be charged under section 31 as income of the income year, and
 
(ii) for the purposes of computing in respect of the new asset any allowance under the Third Schedule or the amount of any capital gain arising from its transfer, the cost of acquisition or the written down value, as the case may be, shall be nil, or
 
(b) if the amount of the capital gain is equal to or less than the cost of acquisition of the new asset,-
 
(i) the capital gain shall not be charged under section 31, and
 
(ii) for the purposes of computing in respect of the new asset any allowance under the Third Schedule or any income under section 19(16) or the amount of any capital gain arising from its transfer, the cost of acquisition or the written down value, as the case may be, shall be reduced by the amount of the capital gain:
 
Provided that where in respect of the purchase of a new capital asset consisting of plant or machinery, the assessee satisfies the Deputy Commissioner of Taxes that despite the exercise of due diligence it has not been possible to make the purchase within the period specified in this sub-section, the Deputy Commissioner of Taxes may, with the prior approval of the Inspecting Joint Commissioner, extend the said period to such date as he considers reasonable.
 
(6) Omitted by section 57 of অর্থ আইন, ২০০০ (২০০০ সনের ১৫ নং আইন).]
 
248[ (7) Notwithstanding anything contained in this section or section 31, where a capital gain arises from the transfer of a capital asset being Government securities 249[ ***], 250[ * * *] then no tax shall be charged under section 31.]
 
(8) [Omitted by section 57 of অর্থ আইন, ২০০০ (২০০০ সনের ১৫ নং আইন).]
 
(9) [Omitted by section 57 of অর্থ আইন, ২০০০ (২০০০ সনের ১৫ নং আইন).]
 
(10) Notwithstanding anything contained in this section or section 31, where a capital gain arises from the transfer of capital being buildings or lands to a new company registered under 251[ the Companies Act, 1913 (VII of 1913) or কোম্পানী আইন, ১৯৯৪ (১৯৯৪ সনের ১৮ নং আইন),] for setting up of an industry, and if the whole amount of capital gain is invested in the equity of the said company, then the capital gain shall not be charged to tax as income of the year in which the transfer took place.
 
(11) Notwithstanding anything contained in this section or section 31, where a capital gain arises from the transfer of a capital asset of a firm to a new company registered under 252[ the Companies Act, 1913 (VII of 1913) or কোম্পানী আইন, ১৯৯৪ (১৯৯৪ সনের ১৮ নং আইন)], and if the whole amount of the capital gain is invested in the equity of the said company by the partners of the said firm, then the capital gain shall not be charged to tax as income of the year in which the transfer took place.]
 
(11A) 253[ ***]
 
254[ (12) Notwithstanding anything contained in 255[ sub-sections (5), (7), (10) and (11)], no exemption shall be allowed to any person on so much of profits and gains arising out of the transfer of a capital asset as is attributable to the cost of acquisition of such asset in respect of which any investment allowance referred to in paragraphs 1, 2, 3, 4, 5, 6, 8, 9, 10 and 11 of PART B of THE SIXTH SCHEDULE to this Ordinance was at any time allowed.]
 
Income from other sources

33. The following income of an assessee shall be classified and computed under the head “Income from other sources”, namely:-

 
 

(a) dividend and interest;

 
 

(b) royalties and fees for technical services;

 
 

(c) income from letting of machinery, plants or furniture belonging to the assessee, and also of buildings belonging to him if the letting of buildings is inseparable from the letting of the machinery, plant or furniture;

 
 

(d) any income to which section 19(1), (2), (3), (4), (5), (8), (9), (10), (11), (12), (13), (21), 256[(24), (27), (29), (31) or (32)] applies];

Deductions from income from other sources
34. (1) The amount of interest paid in respect of money borrowed for the purpose of acquisition of shares of a company.
 
 
(2) Any expenditure, not being in the nature of capital expenditure or personal expenses of the assessee, incurred solely for the purpose of making or earning the relevant income.
 
 
(3) Where the income is derived from letting on hire of machinery, plant or furniture belonging to the assessee and also of building belonging to him if the letting of the building is inseparable from the letting of such machinery, plant or furniture, the same allowances as are admissible under section 29(1)(vi), (vii), (viii) and (xi) to an assessee in respect of income under the head “Income from business or profession” subject to the same conditions and limitations as if the income from such letting on hire were income from business or profession:
 
 
Provided that the provisions of section 19(16) shall also be applicable for the determination of any profits where the sale proceeds of such machinery, plant, furniture or building exceeds the written down value thereof.
 
 
(4) Notwithstanding anything contained in this section, no allowance shall be made on account of-
 
 
(a) any interest chargeable under this Ordinance which is payable outside Bangladesh on which tax has not been paid and from which tax has not been deducted at source under section 56; or
 
 
(b) any payment which is chargeable under the head “Salaries” if tax has not been paid thereon or deducted therefrom under section 50.
Method of accounting
35. (1) All income classifiable under the head 257[ "Agricultural income",] "Income from business or profession" or "Income from other sources" shall be computed in accordance with the method of accounting regularly employed by the assessee.
 
258[ (2) Notwithstanding anything contained in sub-section (1), the Board may, in case of any business or profession, or class of business or profession, or any other source of income, or any class of persons or class of income, by a general or special order, direct that the accounts and other documents shall be maintained in such manner and form, and the mode of payments of commercial transactions recorded in such manner and form, as may be prescribed or as may be specified in such direction; and thereupon the income of the assessee shall be computed on the basis of the accounts maintained, payments made and transactions recorded accordingly.]
 
259[ “(3) Without prejudice to the preceding sub-sections, every company as defined in the Companies Act, 1913 (VII of 1913) or কোম্পানী আইন, ১৯৯৪ (১৯৯৪ সালের ১৮ নং আইন) shall, with the return of income required to be filed under this Ordinance, furnish a copy of the trading account, profit and loss account and the balance sheet in respect of the relevant income year-
 
(a) certified by a chartered accountant to the effect that the accounts are-
 
(i) maintained and the statements are prepared and reported in accordance with Bangladesh Accounting Standards (BAS) and Bangladesh Financial Reporting Standards (BFRS) or in accordance with International Accounting Standards (IAS) and International Financial Reporting Standards (IFRS) as adopted in Bangladesh; and
 
(ii) audited in accordance with the Bangladesh Standards on Auditing (BSA);
 
(b) signed by the persons including as many directors as required
 
under sub-sections (1) and (2) of section 189 of কোম্পানী আইন, ১৯৯৪ (১৯৯৪ সালের ১৮ নং আইন);]
 
(4) Where-
 
(a) no method of accounting has been regularly employed, or if the method employed is such that, in the opinion of the Deputy Commissioner of Taxes, the income of the assessee cannot be properly deducted therefrom; or
 
(b) in any case to which sub-section (2) applies, the assessee fails to maintain accounts, make payments or record transactions in the manner directed under that sub-section; or
 
(c) a company 260[ * * *] has not complied with the requirements of sub-section (3) 261[ or the certification of accounts is not found verifiable];
 
the income of the assessee shall be computed on such basis and in such manner as the Deputy Commissioner of Taxes may think fit.
Allocation of income from royalties, etc., for literary works, etc.
36. Where the time taken by the author of a literary or artistic work in the making thereof exceeds twelve months, the amount received or receivable by him during any income year in lump sum on account of royalties or copyright fees in respect of that work shall, if he so claims, be deemed to be the income of-
 
 
 
 
(a) the income year in which it is received and the immediately preceding income year if the time taken in making such work exceeds twelve months but does not exceed twenty-four months; and
 
 
 
 
(b) the income year in which it is received and the two immediately preceding income years if the time taken in making such work exceeds twenty-four months, and shall be allocated in equal proportions to each such income year and the income of the assessee in respect of an income year shall be computed accordingly.
 
 
 
 
Explanation.- For the purposes of this section, the expression “author” includes a joint author and the expression “lump sum” in regard to royalties or copyright fees includes an advance payment on account of such royalties or copyright fees which is not returnable.
Set off of losses
37. Where, in respect of any assessment year, the net result of computation of income under any head is a loss, the assessee shall, subject to the other provisions of this Ordinance, be entitled to have the amount of such loss set off against his income, if any, assessable for that assessment year under any other head:
 
 
262[Provided that any loss in respect of any speculation business or any loss under the head “Capital gains” or any loss from any other source, income of which is exempted from tax shall not be so set off, but shall, excluding any loss from any other source, income of which is exempted from tax, in accordance with the provisions of this Ordinance, be set off, or be carried forward to succeeding assessment year or years for set off, against any income in respect of speculation business or any income under the head “Capital gains”:]
 
 
Provided further that for the purposes of this section the Deputy Commissioner of Taxes shall, in computing any loss, deduct any amount received in cash as subsidy from the Government263[:]
 
 
264[Provided further that any loss in respect of any income from business or profession shall not be so set off, or be carried forward to succeeding assessment year or years for set off, against any income from house property265[:
 
Provided further that any loss in respect of any income from any head shall not be so set off against any income from manufacturing of cigarette 266[, bidi, zarda, chewing tobacco, gul or any other smokeless tobacco or tobacco products].]]
Carry forward of business losses
38. Where, for any assessment year, the net result of the computation of income under the head “Income from business or profession” is a loss to the assessee, not being a loss sustained in a speculation business, and such loss has not been wholly set off under section 37, so much of the loss as has not been so set off, the whole of the loss, where the assessee has no income under any other head or has income only under the head “Capital gains”, shall be carried forward to the next following assessment year, and-
 
 
 
 
(a) it shall be set off against the income, if any, from the business or profession for which the loss was originally computed if such business or profession continued to be carried on by him in the income year; and
 
 
 
 
(b) if the loss cannot be wholly so set off, the amount of the loss not so set off shall be carried forward to the next assessment year and so on for not more than six successive assessment years.
Carry forward of loss in speculation business
39. (1) Where, for any assessment year, the result of computation of income in respect of any speculation business carried on by the assessee is a loss, it shall be set off only against the income, if any, from any other speculation business carried on by him and assessable for that assessment year.
 
 
(2) Where, for any assessment year, any loss computed in respect of a speculation business has not been wholly set off under sub-section (1), so much of the loss as has not been so set off, or the whole loss where the assessee has no income from any other speculation business, shall, subject to the provisions of this Ordinance, be carried forward to the next following assessment year, and-
 
 
(a) it shall be set off against the income, if any, from any speculation business carried on by him and assessable for that assessment year; and
 
 
(b) if the loss cannot be wholly so set off, the amount of loss not so set off shall be carried forward to the next assessment year and so on for not more than six successive assessment years.
Carry forward of loss under the head “Capital gains”
40. (1) Where, in respect of any assessment year, the net result of computation of income from any source under the head “Capital gains” is a loss, it shall be set off only against income from any other source falling under that head and assessable for that year.
 
 
(2) Where, for any assessment year, any loss computed under the head “Capital gains” has not been wholly set off under sub-section (1), so much of the loss as has not been so set off, or the whole loss where the assessee has no income from any other source falling under that head, shall, subject to the provisions of this Ordinance, be carried forward to the next following assessment year, and-
 
 
(a) it shall be set off against income, if any, of the assessee under that head and assessable for that year; and
 
 
(b) if the loss cannot be wholly so set off, the amount of loss not so set off shall be carried forward to the next assessment year and so on for not more than six successive assessment years.
 
 
(3) Where, in respect of any assessment year, the loss computed under the head “Capital gains” does not exceeds five thousand taka it shall not be carried forward and where it exceeds five thousand taka only so much of such loss shall be carried forward as exceeds five thousand taka.
Carry forward of loss under the head “Agricultural income”
41. Where, for any assessment year, the net result of the computation of income under the head “Agricultural income” is a loss to the assessee, and such loss has not been wholly set off under section 37, so much of the loss as has not been so set off, or the whole of the loss, where the assessee has no income under any other head or has income only under the head “Capital gains”, shall be carried forward to the next following assessment year, and-
 
 
(a) it shall be set off against agricultural income, if any, of the assessee assessable for that assessment year; and
 
 
(b) if the loss cannot be wholly so set off the amount not so set off shall be carried forward to the next assessment year and so on for not more than six successive assessment years.
Conditions and limitations of carrying forward of loss, etc.
42. (1) The provisions of sections 37, 38, 39, 40 and 41 shall have effect subject to the conditions and limitations set out in this section.
 
 
(2) [Omitted by section 6 of অর্থ আইন, ১৯৯৫ (১৯৯৫ সনের ১২ নং আইন).]
 
 
(3) In the case of 267[a firm],-
 
 
(a) Where the assessee is the firm, the loss sustained by it under any head of income shall be set off under section 37 only against the income of the firm under any other head and not against the income of any of the partners of the firm; and
 
 
(b) where the assessee is a partner of the firm, he shall not be entitled to have any loss, sustained by the firm carried forward and set off against his own income.
 
 
(4) Where any person carrying on any business or profession has been succeeded in such capacity by another person otherwise than by inheritance, no person, other than the person incurring the loss, shall be entitled to have the loss in such business or profession set off against his income under any other head.
 
 
(5) In the case of a firm in the constitution of which a change has occurred,-
 
 
(a) the firm shall not be entitled to set off so much of the loss proportionate to the share of a retired or deceased partner as exceeds his share of profits, if any, of the income year in the firm; and
 
 
(b) a partner of the firm shall not be entitled to the benefit of any portion of the said loss as is not apportionable to him.
 
 
(6) Where, in making an assessment for any year, full effect cannot be given to the allowances referred to in section 29(1) (viii) owing to there being no profits or gains chargeable for that year or such profits or gains being less than the allowance then, subject to the provisions of sub-section (7), the allowance or part of the allowance to which effect has not been given, as the case may be, shall be added to the amount of the allowance for depreciation for the following year and be deemed to be part of that allowance or if there is no such allowance for that year, be deemed to be the allowance for that year and so on for succeeding years.
 
 
(7) Where, under sub-section (6), depreciation allowance is also to be carried forward, effect shall first be given to the provisions of sections 38 and 39 (2).
Computation of total income
43. (1) For the purpose of charge of tax, the total income of an assessee shall be computed in the manner provided in this ordinance.
 
 
(2) In computing the total income of an assessee, there shall be included any exemption or allowance specified in part B of the Sixth Schedule and any income deemed to be the income of the assessee under section 19, subject to the limits, conditions and qualifications laid down therein.
 
 
(3) Where the assessee is a partner of a firm, then, whether the firm has made a profit or a loss, his share (whether a net profit or a net loss) shall be taken to be any salary, interest, commission or other remuneration payable to him by the firm in respect of the income year increased or decreased respectively by his share in the balance of the profit or loss of the firm after the deduction of any interest, salary, commission or other remuneration payable to any partner in respect of the income year 268[* * *] and such share shall be included in his total income:
 
 
Provided that if his share so computed is a loss, such loss may be set off or carried forward and set off in accordance with the provisions of section 42.
 
 
(4) In computing the total income of any individual for the purpose of assessment, there shall be included-
 
 
(a) so much of the income of the spouse or minor child of such individual as arises, directly or indirectly,-
 
 
(i) from the membership of the spouse in a firm of which such individual is a partner;
 
 
(ii) from the admission of the minor child to the benefits of partnership in a firm of which such individual is a partner;
 
 
(iii) from assets transferred directly or indirectly to the spouse 269[otherwise than by way of gift or for adequate consideration] or in connection with an agreement to live apart; or
 
 
(iv) from assets transferred directly or indirectly to the minor child, not being a married daughter, by such individual 270[otherwise than by way of gift or for adequate consideration]; and
 
 
(b) so much of the income of any person or association of persons as arises from assets transferred, 271[otherwise than by way of gift or for adequate consideration], to such person or association or persons by such individual for the benefit of the spouse or minor child or both.
 
 
(5) All income arising to any person by virtue of a settlement or disposition whether revocable or not from assets remaining the property of the 272[settlor] or disponer, shall be deemed to be income of the 273[settlor] or disponer, and all income arising to any person by virtue of a revocable transfer of assets shall be deemed to be income of the transferor and shall be included in the total income of such person 274[.
 
 
[* * *]]
 
 
(6) For the purpose of sub-section (5),-
 
 
(a) a settlement, disposition or transfer shall be deemed to be revocable if it contains any provision for the retransfer directly or indirectly of the income or assets to the 275[settlor], disponer or transferor, or in any way gives the 276[settlor], disponer or transferor a right to resume power directly over the income or assets;
 
 
(b) the expression “settlement or disposition” shall include any disposition, trust, covenant, agreement or arrangement, and the expression 277[settlor] or disponer, in relation to a settlement or disposition, shall include any person by whom the settlement or disposition was made.

Chapter VI

EXEMPTIONS AND ALLOWANCES

Exemption

44. (1) Notwithstanding anything contained in this Ordinance, any income or class of income or the income of any person or class of persons specified in Part A of the Sixth Schedule shall be exempt from the tax payable under this Ordinance, subject to the limits, conditions and qualifications laid down therein and shall be excluded from the computation of total income under this Ordinance.

 
 

278[(2) Subject to the provisions of this Ordinance and the limits, conditions and qualifications laid down in Part B of the Sixth Schedule,-

 
 

(a) tax shall not be payable by an assessee in respect of any income or any sum specified in paragraphs 15 and 16 of the said Part B; and

 
 

279[(b) an assessee, being a resident or a non-resident Bangladeshi, shall be entitled to a credit from the amount of tax payable on his total income of the following amount:

 

 

 

280[

             Total Income

Amount of credit

i. if the total income does not exceed taka fifteen lakh

15% of the eligible amount;

ii. if the total income exceeds taka fifteen lakh

10% of the eligible amount;”

]

 

(c) the “eligible amount” mentioned in clause (b) shall be the lesser of-

 
 
 
 
 
 
 
 
 
 
 
 
 
 

 
 
 
 

(i) the sums specified in all paragraphs excluding paragraphs 15 and 16 of Part B of the Sixth Schedule; or

 

(ii) 25% of the total income excluding any income for which a tax exemption or a reduced rate is applicable under sub-section (4) of section 44 or any income from any source or sources mentioned in clause (a) of sub-section (2) of section 82C; or

 

(iii) one crore and fifty lakh taka.”;].

 
 
 

281[***]

 
 

Provided that the amount admissible under clause (a) shall not, under any circumstances, exceed 282[thirty per cent] of the total income of the assessee.]

 
 

(4) The Government may, by notification in the official Gazette,-

 
 

(a) make such amendments by way of addition, omission, alteration or qualification in the Sixth Schedule as it may deem fit; and

 
 

(b) make any exemption, reduction in rate or other modifications in respect of tax in favour of any class of income or in regard to the whole or any part of the income of any class of persons 283[.***]

 
 
 

284[(5) Notwithstanding anything contained in clause (b) of sub-section (4) or any other section in Chapter VI-

 

(a) the income of a person for the relevant income year shall not be-

 

(i) exempted from tax; or

 

(ii) be subject to reduced rate of tax;

 

in an assessment year if the person fails to submit the return of income, as required under section 75;

 

(b) any disallowance of expenditure under section 30, in calculating the income of a source or of a person that is exempted from tax or is subject to a reduced rate of tax, shall be treated as income for that source or of that person, as the case may be, and tax shall be payable on such income at the regular rate.]

Exemption of income of an industrial undertaking
45. (1) Subject to the provisions of this Ordinance, the income, profits and gains of an industrial undertaking set up in Bangladesh between the first day of July, 1974, and the thirtieth day of June, 1985 (both days inclusive), shall be exempt from tax payable under this Ordinance for the period specified below-
 
 
(a) if the undertaking is set up in such areas as the Board may, by notification in the official Gazette, specify to be “Special Economic Zone”, for a period of twelve years beginning with the month of commencement of commercial production of the undertaking;
 
 
(b) if the undertaking is set up in such areas as the Board may, by notification in the official Gazette, specify in this behalf, for a period of nine years beginning with the month of commencement of commercial production of the undertaking; and
 
 
(c) in other areas, for a period of five years beginning with the month of such commencement.
 
 
Explanation.- For the purposes of this section, “industrial undertaking” includes expansion of an existing undertaking if such expansion constitute-
 
 
(a) an identifiable unit for production of similar or other goods or class of goods; or
 
 
(b) a similar unit carrying on an identifiable industrial process, but does not include an undertaking which is formed by splitting up or reconstruction of an existing business or by the transfer of machinery or plant of an existing business in Bangladesh to a new business.
 
 
(2) The exemption under sub-section (1) shall apply to an industrial under-taking (hereinafter referred to as the “said undertaking”) which fulfils the following conditions, namely:-
 
 
(a) that the said undertaking is owned and managed by-
 
 
(i) a body corporate established by, or in pursuance of, an Act of Parliament with its head office in Bangladesh; or
 
 
(ii) a company registered under the Companies Act, 1913 (VII of 1913), with its registered office in Bangladesh and having a subscribed and paid up capital of not less than one lakh taka on the date of commencement of commercial production;
 
 
(b) that the said undertaking belongs to such class of industry as the Board may, by notification in the official Gazette, specify for the purposes of this section;
 
 
(c) that a part of the income exempted under this section is reinvested in the said undertaking or is invested in the purchase of bond issued by the Government and such reinvestment or investment is not-
 
 
(i) less than fifteen per cent of such income, if it is an undertaking set up in the areas referred to in sub-section (1) (a) and (b); and
 
 
(ii) less than thirty per cent in other areas;
 
 
(d) that the said undertaking is approved and, during the relevant income year, stands approved by the Board for the purposes of this section;
 
 
(e) that the application in the prescribed form for approval for the purposes of this section, as verified in the prescribed manner, is made to the Board within one hundred and twenty days from the date of commencement of commercial production:
 
 
Provided that the Board may admit an application after the expiry of the said period of one hundred and twenty days if it is satisfied that there was sufficient cause for not making the application within the said period.
 
 
285[(2A) Subject to the provisions of this Ordinance, the income, profits and gains of an industrial undertaking set up in Bangladesh between the first day of July, 1985, and the thirtieth day of June, 286[1995] (both days inclusive), shall be exempt from the tax payable under this Ordinance for the period specified below-
 
 
(a) if the undertaking is set up in such areas as the Board may, by notification in the official Gazette, specify to be “Special Economic Zone”, for a period of twelve years beginning with the month of commencement of commercial production of the undertaking;
 
 
(b) if the undertaking is set up in such areas as the Board may, by notification in the official Gazette, specify to be “Least Developed Areas”, for a period of nine years beginning with the month of commencement of commercial production of the undertaking;
 
 
(c) if the undertaking is set up in such areas as the Board may, by notification in the official Gazette, specify to be “Less Developed Areas”, for a period of 287[seven years] beginning with the month of commencement of commercial production of the undertaking; and
 
 
(d) if the undertaking is set up in the city of Dhaka, Chittagong or Khulna or the municipality of Narayanganj, or within ten miles from the outer limits thereof, for a period of 288[five years] beginning with the month of commencement of commercial production of the undertaking.
 
 
(2B) The exemption under sub-section (2A) shall apply to an industrial undertaking (hereinafter referred to as the “said undertaking”) which fulfils the following conditions, namely:-
 
 
(a) that the said undertaking is owned and managed by-
 
 
(i) a body corporate established by, or in pursuance of, an Act of Parliament with its head office in Bangladesh; or
 
 
(ii) a company registered under 289[the Companies Act, 1913 (VII of 1913) or কোম্পানী আইন, ১৯৯৪ (১৯৯৪ সনের ১৮ নং আইন)] with its registered office in Bangladesh and having a subscribed and paid up capital of not less than one lakh taka on the date of commencement of commercial production;
 
 
(b) that the said undertaking belongs to such class of industry as the Board may, by notification in the official Gazette, specify for the purpose of this sub-section;
 
 
290[ 291[* * *]
 
 
(cc) that a part of the income exempted under sub-section (2A) is invested, 292[during the period, or within one year from the end of the period,] to which the exemption under that sub-section relates, in the said undertaking or in any new industrial undertaking or in any productive assets being stocks and shares of a public company or bonds or securities issued by the Government and such investment is not less than 293[thirty per cent] of such income, failing which the income so exempted shall, notwithstanding the provisions of this Ordinance, be subject to tax in the assessment year for which the exemption was allowed 294[:
 
 
Provided that the quantum of investment referred to in this clause shall be reduced by the amount of dividend, if any, declared by the company enjoying tax exemption under this section;]]
 
 
(d) that the said undertaking is approved and, during the relevant income year, stands approved by the Board for the purposes of this section;
 
 
(e) that the application in the prescribed form for approval for the purposes of this section, as verified in the prescribed manner, is made to the Board within 295[one hundred and eighty days] from the date of commencement of commercial production:
 
 
Provided that the Board may admit an application after the expiry of the said period of 296[one hundred and eighty days] if it is satisfied that there was sufficient cause for not making the application within the said period.]
 
 
297[(2C) The Board shall give its decision on an application made under clause (e) of sub-section (2B) within 298[three months] from the date of receipt of the application by the Board, failing which the undertaking shall be deemed to have been approved by the Board for the purposes of this section.]
 
 
(3) The income, profits and gains of the said undertaking to which this section applies, shall be computed in accordance with the provisions of sections 28 and 29:
 
 
299[Provided that in respect of depreciation, only the allowances for normal depreciation specified in paragraph 3 of the Third Schedule shall be allowed.]
 
 
(4) The profits and gains of the said undertaking shall be computed separately from other income, profits and gains of the assessee, if any, and where the assessee sustains a loss from such undertaking, it shall be carried forward and set off against the profits and gains of the said undertaking for the following year, and where it cannot be wholly set off, the amount of the loss not so set off, shall be carried forward for the next year and so on, but no loss shall be carried beyond the period of exemption allowed under this section.
 
 
(5) Nothing contained in this section shall be so construed as to exempt the following:-
 
 
(a) any dividend paid, credited or distributed or deemed to have been paid, credited or distributed by a company to its share-holders out of the profits and gains exempt from tax under this section; and
 
 
(b) any income of the said undertaking classifiable as “Capital gains” chargeable under the provisions of section 31.
 
 
(6) Where any exemption has been allowed under this section and it is subsequently discovered by the Deputy Commissioner of Taxes that any one or more of the conditions specified in this section were not fulfilled, the exemption originally allowed shall be deemed to have been wrongly allowed, and the Deputy Commissioner of Taxes may, notwithstanding anything contained in this Ordinance, re-compute the total income of, and the tax payable by, the assessee for the relevant income year and the provisions of Section 93 or 94 shall, so far as may be, apply thereto, the period of two years specified in section 94 being reckoned from the end of the assessment year relevant to the income year in which the infringement was discovered.
 
 
(7) An industrial undertaking approved under this section may, not later than six months from the date of approval, apply in writing to the Board for the cancellation of such approval, and the Board may pass such orders thereon as it may deem fit.
 
 
300[(8) Notwithstanding anything contained in this section, the Board may, in the public interest, cancel or suspend fully or partially any exemption allowed under this section.]
Exemption of income of a tourist industry
46. (1) Subject to the provisions of this Ordinance, the income, profits and gains of a tourist industry set up in Bangladesh between the first day of January, 1976, and the thirtieth day of June, 1985 (both days inclusive), shall be exempt from the tax payable under this Ordinance, for the period specified below-
 
 
(a) if the industry is set up in such areas as the Board may, by notification in the official Gazette, specify to be “Special Economic Zone”, for a period of twelve years beginning with the commencement of its commercial service;
 
 
(b) if the industry is set up in the cities of Dhaka, Chittagong, Khulna and Rajshahi and the areas within fifteen miles from the outer municipal limits of those cities, for a period of five years beginning with the month of commencement of its commercial service; and
 
 
(c) in other areas, for a period of seven years beginning with the month of such commencement.
 
 
Explanation.- For the purposes of this section, the expression “tourist industry” means a business, industry or undertaking which caters for the tourists including setting up, establishment or running of hotels, motels, 301[hunting lodges, amusement and theme park, holiday home, tourist resort, family fun and games, energy park] and private picnic spots of such standard as may be prescribed by the Board.
 
 
(2) The exemption under sub-section (1) shall apply to a tourist industry (hereinafter referred to as the “said industry”), which fulfils the following conditions, namely:-
 
 
(a) that the said industry is owned and managed by a Bangladeshi company having a subscribed and paid up capital of not less than one lakh taka on the date of commencement of its commercial service;
 
 
(b) that the said industry shall have such service facilities as the Board may, by notification in the official Gazette, specify in this behalf;
 
 
(c) that a part of the income, profits and gains derived from the said industry exempted under sub-section (1) is reinvested in it or is invested in the purchase of bond issued by the Government, and such reinvestment or investment is not-
 
 
(i) less than thirty per cent, if it is an industry set up in the areas referred to in sub-section (1) (b); and
 
 
(ii) less than fifteen per cent, in other areas;
 
 
(d) that an application in the prescribed form for approval for the purposes of this section, as verified in the prescribed manner, is made to the Board within one hundred and twenty days of the date of commencement of commercial service;
 
 
(e) that the said industry is approved and, during the relevant income year, stands approved by the Board for the purposes of this section.
 
 
302[(2A) Subject to the provisions of this Ordinance, the income, profits and gains of a tourist industry set up in Bangladesh between the first day of July, 1985, and the thirtieth day of June, 303[2000] (both days inclusive), shall be exempt from the tax payable under this Ordinance, for the period specified below-
 
 
(a) if the industry is set up in such areas as the Board may, by notification in the official Gazette, specify to be “Special Economic Zone”, for a period of twelve years beginning with the month of commencement of its commercial service;
 
 
(b) if the industry is set up in such areas as the Board may, by notification in the official Gazette, specify to be “Least Developed Areas”, for a period of nine years beginning with the month of commencement of its commercial service;
 
 
(c) in the industry is set up in such areas as the Board may, by notification in the official Gazette, specify to be “Less Developed Areas”, for a period of 304[seven years] beginning with the month or commencement of its commercial service; and
 
 
(d) if the industry is set up in the city of Dhaka, Chittagong or Khulna or the municipality of Rajshahi, or within fifteen miles from the outer limits thereof, for a period of 305[five years] beginning with the month of commencement of its commercial service.
 
 
(2B) The exemption under sub-section (2A) shall apply to a tourist industry (hereinafter referred to as the “said industry”), which fulfils the following conditions, namely:-
 
 
(a) that the said industry is owned and managed by a Bangladeshi company having a subscribed and paid up capital of not less than one lakh taka on the date of commencement of its commercial service;
 
 
(b) that the said industry shall have such service facilities as the Board may, by notification in the official Gazette, specify in this behalf;
 
 
306[ 307[* * *]
 
 
(cc) that a part of the income exempted under sub-section (2A) is invested, 308[during the period, or within one year from the end of the period], to which the exemption under that sub-section relates, in the said undertaking or in any new industrial undertaking or in any productive assets being stocks and shares of a public company or bonds or securities issued by the Government and such investment is not less than 309[twenty five per cent] of such income, failing which the income so exempted shall, notwithstanding the provisions of this Ordinance, be subject to tax in the assessment year for which the exemption was allowed 310[:
 
 
Provided that the quantum of investment referred to in this clause shall be reduced by the amount of dividend, if any, declared by the company enjoying tax exemption under this section;]]
 
 
(d) that an application in the prescribed form for approval for the purposes of this section as verified in the prescribed manner, is made to the Board within 311[one hundred and eighty days] of the date of commencement of commercial service;
 
 
(e) that the said industry is approved and, during the relevant income year, stands approved by the Board for the purposes of this section.]
 
 
312[(2C) The Board shall give its decision on an application made under clause (d) of sub-section (2B) within 313[three months] from the date of receipt of the application by the Board, failing which the industry shall be deemed to have been approved by the Board for the purposes of this section.]
 
 
(3) The profits and gains of the said industry to which this section applies shall be computed in accordance with the provisions of sections 28 and 29:
 
 
Provided that in respect of depreciation, only the allowance for normal depreciation specified in paragraph 3 of the Third Schedule shall be allowed.
 
 
(4) The profits and gains of the said industry shall be computed separately from other income, profits and gains of the assessee, if any, and where the assessee sustains a loss from such industry, it shall be carried forward and set off against the profits and gains of the said industry for the following year and where it cannot be wholly set off, the amount of the loss not so set off, shall be carried forward for the next year and so on, but no loss shall be carried forward beyond the period of exemption allowed under this section.
 
 
(5) Nothing contained in this section shall be so construed as to exempt the following:-
 
 
(a) any dividend paid, credited or distributed or deemed to have been paid, credited or distributed by a company to its shareholders out of the profits and gains exempt from tax under this section; and
 
 
(b) any income of the said industry classifiable as “Capital gains” chargeable under the provisions of section 31.
 
 
(6) Where any exemption has been allowed under this section and it is subsequently discovered by the Deputy Commissioner of Taxes that any one or more of the conditions specified in this section were not fulfilled, the exemption originally allowed shall be deemed to have been wrongly allowed and the Deputy Commissioner of Taxes may, notwithstanding anything contained in this Ordinance, re-compute the total income of, and the tax payable by, the assessee for the relevant income year, and the provisions of section 93 or 94 shall, so far as may be, apply thereto, the period of two years specified in section 94 being reckoned from the end of the assessment year relevant to the income year in which the infringement was discovered.
 
 
(7) A tourist industry approved under this section may, not later than six months from the date of approval, apply in writing to the Board for the cancellation of such approval, and the Board may pass such orders thereon as it may deem fit.
 
 
314[(8) Notwithstanding anything contained in this section, the Board may, in the public interest, cancel or suspend fully or partially the exemption allowed under this section.]
Exemption from tax of newly established industrial undertakings, etc. in certain cases
315[46A. (1) Subject to the provisions of this Ordinance, 316[profits and gains under section 28 from] an industrial undertaking, tourist industry or physical infrastructure facility (hereinafter referred to as the said undertaking) set-up in Bangladesh between the first day of July, 1995and the thirtieth day of 317[June, 2008] (both days inclusive) shall be exempt from the tax payable under this Ordinance for the period specified below-
 
 
(a) if the said undertaking is set-up in 318[Dhaka and Chittagong divisions], excluding the hill districts of Rangamati, Bandarban and Khagrachari, for a period of 319[four] years beginning with the month of commencement of commercial production or operation of the said undertaking;
 
 
(b) if the said undertaking is set-up in 320[Rajshahi, Khulna, Sylhet and Barisal divisions] and the hill districts of Rangamati, Bandarban and Khagrachari, for a period of 321[six] years beginning with the month of commencement of commercial production or operation of the said undertaking.
 
 
322[* * *]
 
 
323[(1A) industrial undertaking, tourist industry, or physical infrastructure facility does not include expansion of an existing undertaking for the purpose of this section,-
 
 
(i) “industrial undertaking” means an industry engaged in the production of textile, textile machinery, high value garments, pharmaceuticals, melamine, plastic products, ceramics, sanitary ware, steel from iron ore, fertilizer, insecticide & pesticide, computer hardware, petro-chemicals, basic raw materials of drugs, chemicals, pharmaceuticals, agricultural machine, ship building, boilers, compressors and any other category of industrial undertaking as the Government may by notification in the official Gazette specify.
 
 
Explanation.- ÔÇÿhigh value garments' mean overcoats, jackets and suits.
 
 
(ii) “physical infrastructure facility” means sea or river port, container terminals, internal container depot, container freight station, LNG terminal and transmission line, CNG terminal and transmission line, gas pipe line, flyover, large water treatment plant & supply through pipe line, waste treatment plant, 324[solar energy plant,] export processing zone and any other category of physical infrastructure facility as the Government may by notification in the official Gazette specify;
 
 
(iii) “tourist industry” means residential hotel having facility of three star or more and any other category of tourist industry facility as the Government may by notification in the official Gazette specify.]
 
 
(2) The exemption under sub-section (1) shall apply to the said undertaking if it fulfils the following conditions, namely:-
 
 
(a) that the said undertaking is owned and managed by-
 
 
(i) a body corporate established by or under an Act of Parliament with its head office in Bangladesh; or
 
 
(ii) a company as defined in the Companies Act, 1913 (VII of 1913) or কোম্পানী আইন, ১৯৯৪ (১৯৯৪ সনের ১৮ নং আইন) with its registered office in Bangladesh and having a subscribed and paid up capital of not less than one lakh taka on the date of commencement of commercial production or operation;
 
 
325[* * *]
 
 
326[(c) that thirty per cent of the income exempted under sub-section (1) is invested in the said undertaking or in any new industrial undertakings during the period of exemption or within one year from the end of the period to which the exemption under that sub-section relates and in addition to that another ten per cent of the income exempted under sub-section (1) is invested in each year before the expiry of three months from the end of the income year in the purchase of shares of a company listed with any stock exchange, failing which the income so exempted shall, notwithstanding the provisions of this Ordinance, be subject to tax in the assessment year for which the exemption was allowed:
 
 
 
Provided that the quantum of investment referred to in this clause shall be reduced by the amount of dividend, if any, declared by the company enjoying tax exemption under this section 327[:
 
Provided further that, the provision for purchase of shares of a company listed with any stock exchange referred to in this clause shall not be applicable to ready made garments industry, if it re-invested forty percent of the income exempted under sub-section (1) in the said undertaking or in any new industrial undertaking during the period of exemption or within one year from the end of the period to which the exemption under that sub-section relates.]
 
 
 
(d) that the said undertaking is not formed by splitting up or by reconstruction or reconstitution of business already in existence or by transfer to a new business of any machinery or plant used in business which was being carried on in Bangladesh at any time before the commencement of the new business;
 
 
(e) that the said undertaking is approved, and during the relevant income year, stands approved by the Board for the purposes of this section;
 
 
(f) that the application in the prescribed form for approval for the purposes of this section, as verified in the prescribed manner, is made to the Board 328[within six months from the end of the month] of commencement of commercial production or operation.
 
 
329[(2A) Notwithstanding anything contained in this section-
 
 
(a) where a said undertaking enjoying exemption of tax under this section is engaged in any commercial transaction with another undertaking or company having one or more common sponsor directors, and
 
 
(b) during the course of making an assessment of the said undertaking if the Deputy Commissioner of Taxes is satisfied that the said undertaking has purchased or sold goods at higher or lower price in comparison to the market price with intent to reduce the income of another undertaking or company,
 
 
the exemption of tax of that said undertaking shall be deemed to have been withdrawn for that assessment year in which such transaction is made.]
 
 
(3) The Board shall give its decision on an application made under clause (f) of sub-section (2) within 330[forty-five days] from the date of receipt of the application by the Board, failing which the undertaking shall be deemed to have been approved by the Board for the purposes of this section 331[: Provided that the Board shall not reject any application made under this section unless the applicant is given a reasonable opportunity of being heard.]
 
 
(4) The Board may, on an application of any person aggrieved by any decision or order passed under sub-section (3), if the application is made within four months of the receipt of such decision or order, review the previous decision or order and pass such order in relation thereto as it thinks fit.
 
 
(5) The profits and gains of the undertaking to which this section applies shall be computed in the same manner as is applicable to income chargeable under the head “Income from business or profession”:
 
 
332[Provided that in respect of depreciation, only the allowances for normal depreciation specified in paragraph 3 of the Third Schedule shall be allowed.]
 
 
(6) The profits and gains of the said undertaking shall be computed separately from other income, profits and gains of the assessee, if any, and where the assessee sustains a loss from such undertaking it shall be carried forward and set off against the profits and gains of the said undertaking for the following year and where it cannot be wholly set off, the amount of the loss not so set off, shall be carried forward for the next year and so on, but no loss shall be carried forward beyond the period specified by the Board in the order issued under sub-section (3) or (4).
 
 
(7) Unless otherwise specified by the Government, nothing contained in this section shall be so construed as to exempt the following from tax chargeable under this section:-
 
 
(a) any dividend paid, credited or distributed or deemed to have been paid, credited or distributed by a company to its share-holders out of the profits and gains; and
 
 
(b) any income of the said undertaking classifiable as “Capital gains” chargeable under the provisions of section 31 333[; and
 
 
(c) any income of the said undertaking resulting from disallowance made under section 30 334[.
 
 
[* * *]]
 
 
(8) Where any exemption is allowed under this section and in the course of making assessment, the Deputy Commissioner of Taxes is satisfied that any one or more of the conditions specified in this section are not fulfilled, the exemption will stand withdrawn for the relevant assessment year and the Deputy Commissioner of Taxes shall determine the tax payable for such year.
 
 
(9) Any such undertaking approved under this section may, not latter than one year from the date of approval, apply in writing to the Board for the cancellation of such approval, and the Board may pass such orders thereon as it may deem fit.
 
 
(10) Notwithstanding anything contained in this section, the Board may, in the public interest, cancel or suspend fully or partially any exemption allowed under this section.
 
 
(11) The Board may make rules regulating the procedure for the grant of approval under sub-section (3), review under sub-section (4) and furnishing of information regarding payment of other taxes by the said undertaking and any other matters connected with or incidental to operation of this section.]
Exemption from tax of newly established industrial undertakings set up between the period of July, 2011 and 335[June, 336[2019]],etc, in certain cases.
337[46B.(1) Subject to the provisions of this Ordinance, income, profits and gains under section 28 from an industrial undertaking (hereinafter referred to as the said undertaking) set-up in Bangladesh between the first day of July, 2011 and 338[the thirtieth day of June, 339[2019]] (both days inclusive) shall be exempted from the tax payable under this Ordinance for the
 
period, and at the rate, specified below:
 
if the said undertaking is set-up in-
 
340[(i) 341[Dhaka, Mymensingh and] Chittagong divisions, excluding Dhaka, Narayanganj, Gazipur, Chittagong, Rangamati, Bandarban and Khagrachari districts, for a period of five years beginning with the month of commencement of commercial production of the said undertaking:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 

Period of Exemption

Rate of Exemption

For the first and second year

100% of income

For the third year)

60% of income

For the fourth year

40% of income

For the fifth year

20% of income

 

342[(ii) Rajshahi, Khulna, Sylhet, Barisal and Rangpur divisions (excluding City Corporation area) and Rangamati, Bandarban and Khagrachari districts, for a period of ten years beginning with the month of commencement of commercial production of the said undertaking:

 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 

Period of Exemption

Rate of Exemption

For the first and second year

100% of income

For the third year

70% of income

For the fourth year

55% of income

For the fifth year

40% of income

For the sixth year

25% of income

For the seven year

20% of income

 
 
Provided that any industry engaged in the production of item as referred to in clause (e) or clause (I) of sub section (2) shall be entitled to exemption from tax under the provision of this section even if it is set up in the districts of Dhaka, Gazipur, Narayanganj or Chittagonj."]]
 

(2)  For the purpose of this section,-

 

"industrial undertaking" means an industry engaged in the production of-

 
(a) active pharmaceuticals ingredient industry and radio pharmaceuticals industry;
 
343[(aa) automobile manufacturing industry;]
 
(b) barrier contraceptive and rubber latex;
 
(c) basic chemicals or dyes and chemicals;
 
(d) basic ingredients of electronic industry (e.g. resistance, capacitor, transistor, integrator circuit);
 
344[(dd) bi-cycle manufacturing industry;]
 
(e) bio-fertilizer;
 
(f) biotechnology;
 
(g) boilers;
 
345[(gg) brick made of automatic Hybrid Hoffmann Kiln 346[or Tunnel Kiln] technology;]
 
(h) compressors;
 
(i) computer hardware;
 
(j) energy efficient appliances;
 
(k) insecticide or pesticide;
 
(l) petro-chemicals;
 
(m) pharmaceuticals;
 
(n) processing of locally produced fruits and vegetables;
 
(o) radio-active (diffusion) application industry (e.g. developing quality or decaying polymer or preservation of food or disinfecting medicinal equipment);
 
(p) textile machinery;
 
(q) tissue grafting; 347[***
 
(qq) tyre manufacturing industry; or]
 
(r) any other category of industrial undertaking as the Government may, by notification in the official Gazette, specify.
 
(3) Notwithstanding anything contained in sub-section (2), for the purpose of this section industrial undertaking shall not include expansion of such an existing undertaking.
 
(4) The exemption under sub-section (1) shall apply to the said undertaking if it fulfils the following conditions, namely:-
 
(a) that the said undertaking is owned and managed by-
 
(i) a body corporate established by or under any law for the time being in force with its head office in Bangladesh; or
 
(ii) a company as defined in কোম্পানী আইন, ১৯৯৪ (১৯৯৪ সনের ১৮ নং আইন)with its registered office in Bangladesh and having a subscribed and paid up
 
capital of not less than two million taka on the date of commencement of commercial production;
 
(b) that thirty percent of the exempted income under subsection (1) is invested in the said undertaking or in any new industrial undertaking during the period of exemption or within one year from the end of the period to which the exemption under that sub-section relates and in addition to that, another ten percent of the exempted income under sub-section (1) is invested in each year before the expiry of three months from the end of the income year in the purchase of shares of a company listed with any stock exchange, failing which the income so exempted shall, notwithstanding the provisions of this Ordinance, be subject to tax in the
 
assessment year for which the exemption was allowed:
 
Provided that the quantum of investment referred to in this clause shall be reduced by the amount of dividend, if any, declared by the company enjoying tax exemption under this section;
 
(c) that the said undertaking is not formed by splitting up or by reconstruction or reconstitution of business already in existence or by transfer to a new business of any machinery or plant used in business which was being carried on in Bangladesh at any time before the
 
commencement of the new business;
 
(d) that the said undertaking is approved, and during the relevant income year, stands approved by the Board for the purposes of this section;
 
(e) that application in the prescribed form for approval for the purposes of this section, as verified in the prescribed manner, is made to the Board within six months from the end of the month of commencement of commercial production;
 
(f) that the said undertaking obtained a clearance certificate for the relevant income year from the Directorate of Environment;
 
(g) that the said undertaking maintains books of accounts on a regular basis and submits return of its income as per provisions laid down in section 75 of this Ordinance.]
 

 

(5) Notwithstanding anything contained in this section, where an  undertaking enjoying exemption of tax under this section is engaged in any commercial transaction with another undertaking or company having one or more common sponsor directors, and during the course of making an assessment of the said undertaking if the Deputy Commissioner of Taxes is satisfied that the said undertaking has purchased or sold goods at higher or lower price in comparison to the market price with intent to reduce the income of another undertaking or company, the exemption of tax of that  undertaking shall be deemed to have been withdrawn for that assessment year in which such transaction is made.

 

(6)  The Board shall give its decision on an application made under clause (e) of sub-section (4) within forty five days from the date of receipt of the application by the Board, failing which the undertaking shall be deemed to have been approved by the Board for the purposes of this section:

 

            Provided that the Board shall not reject any application made under this section unless the applicant is given a reasonable opportunity of being heard.

 

(7) The Board may, on an application of any person aggrieved by any decision or order passed under sub-section (6), if the application is made within four months of the receipt of such decision or order, review the previous decision, order or orders and pass such order in relation thereto as it thinks fit.

 

(8) The income, profits and gains of the undertaking to which this section applies shall be computed in the same manner as is applicable to income chargeable under the head ''Income from business or profession'':

 

            Provided that in respect of depreciation, only the allowances for normal depreciation specified in paragraph 3 of the Third Schedule shall be allowed.

 

(9)  The income, profits and gains of the undertaking to which this section applies shall be computed separately from other income, profits and gains of the assessee, if any, and where the assessee sustains a loss from such undertaking it shall be carried forward and set off against the profits and gains of the said undertaking for the next year and where it cannot be wholly set off, the  amount of the loss not  so set off, shall be carried forward for the following year and so on, but no loss shall be carried forward beyond the period specified by the Board in the order issued under sub-section (6) or (7).

 

(10) Unless otherwise specified by the Government, nothing contained in this section shall be so construed as to exempt the following from tax chargeable under this section:-

 

(a)     any dividend paid, credited or distributed or deemed to have been paid, credited or distributed by a company to its share-holders out  of the profits and gains;

 

(b)     any income of the said undertaking classifiable as ''Capital gains'' chargeable under the provisions of section 31;

 

(c)     any income of the said undertaking resulting from disallowance made under section 30.

 

(11) Where any exemption is allowed under this section and in the course of making assessment, the Deputy Commissioner of Taxes is satisfied that any one or more of the conditions specified in this section are not fulfilled 348[or any individual not being a Bangladeshi citizen is employed or allowed to work without prior approval of the Board of Investment or any competent authority of the Government, as the case may be, for this purpose], the exemption shall stand withdrawn for the relevant assessment year and the Deputy Commissioner of Taxes shall determine the tax payable for such year.

 

(12) Any such undertaking approved under this section may, not later than one year from the date of approval, apply in writing to the Board for the cancellation of such approval, and the Board may pass such order or orders thereon as it may deem fit.

 

(13) Notwithstanding anything contained in this section, the Board may, in the public interest, cancel or suspend fully or partially any exemption allowed under this section.

 

(14) The Board may make rules regulating the procedure for the grant of approval under sub-section (6), review under sub-section (7), furnish information regarding payment of other taxes by the said undertaking, and take such other measures connected therewith or incidental to the operation of this section as it may deem fit.]

Exemption from tax of newly established industrial undertakings set up between the period of July, 2019 and June, 2024, etc. in certain cases.

349[46BB.  (1) Subject to the provisions of this Ordinance, income, profits and gains under section 28 from an industrial undertaking (hereinafter referred to as the said undertaking) set-up in Bangladesh between the first day of July, 2019 and the thirtieth day of June, 2024 (both days inclusive) shall be exempted from the tax payable under this Ordinance for the period, and at the rate, specified below:

 

 

 

(i) if the said undertaking is set-up in Dhaka, Mymensingh and Chattogram divisions, excluding Dhaka, Narayanganj, Gazipur, Chattogram, Rangamati, Bandarban and Khagrachari districts, for a period of five years beginning with the month of commencement of commercial production of the said undertaking:

 

 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 

Period of Exemption

 
 

Rate of Exemption

 
 

For the first year

 
 

90% of income

 
 

For the second year

 
 

80% of income

 
 

For the third year

 
 

60% of income

 
 

For the fourth year

 
 

40% of income

 
 

For the fifth year

 
 

20% of income ;

 
 

(ii) if the said undertaking is set-up in Rajshahi, Khulna, Sylhet, Barishal and Rangpur divisions (excluding City Corporation area) and Rangamati, Bandarban and Khagrachari districts, for a period of ten years beginning with the month of commencement of commercial production of the said undertaking:

 

 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 

Period of Exemption

 
 

Rate of Exemption

 
 

For the first and second year

 
 

90% of income

 
 

For the third year

 
 

80% of income

 
 

For the fourth year

 
 

70% of income

 
 

For the fifth year

 
 

60% of income

 
 

For the sixth year

 
 

50% of income

 
 

For the seventh year

 
 

40% of income

 
 

For the eighth year

 
 

30% of income

 
 

For the ninth year

 
 

20% of income

 
 

For the tenth year

 
 

10% of income:

 
 

 

 

Provided that any industry engaged in the production of item as referred to in clause (viii) or clause (xii) of sub section (2) shall be entitled to exemption from tax under the provision of this section even if it is set up in the districts of Dhaka, Gazipur, Narayanganj or Chattogram.

 

 

 

(2) For the purpose of this section, "industrial undertaking" means¾

 

 

 

(a) an industry engaged in, or in the production of,¾

 

(i) active pharmaceuticals ingredient and radio pharmaceuticals;

 

(ii) agriculture machineries;

 

(iii) automatic bricks;

 

(iv) automobile;

 

(v) barrier contraceptive and rubber latex;

 

(vi) basic components of electronics (e.g. resistor, capacitor, transistor, integrated circuit, multilayer PCB etc.);

 

(vii) bi-cycle including parts thereof;

 

(viii) bio-fertilizer;

 

(ix) biotechnology based agro products;

 

(x) boiler including parts and equipment thereof;

 

(xi) compressor including parts thereof;

 

(xii) computer hardware;

 

(xiii) furniture;

 

(xiv) home appliances (blender, rice cooker, microwave oven, electric oven, washing machine, induction cooker, water filter etc.);

 

(xv) insecticides or pesticides;

 

(xvi) leather and leather goods;

 

(xvii) LED TV;

 

(xviii) locally produced fruits and vegetables processing;

 

(xix) mobile phone;

 

(xx) petro-chemicals;

 

(xxi) pharmaceuticals;

 

(xxii) plastic recycling;

 

(xxiii) textile machinery;

 

(xxiv) tissue grafting;

 

(xxv) toy manufacturing;

 

       (xxvi) tyre manufacturing;

 

 

 

(b) any other category of industrial undertaking as the Government may, by notification in the official Gazette, specify.

 

(3) Notwithstanding anything contained in sub-section (2), for the purpose of this section industrial undertaking shall not include expansion of such an existing undertaking.

 

(4) The exemption under sub-section (1) shall apply to the said undertaking if it fulfils the following conditions, namely:¾

 

(a)        that the said undertaking is owned and managed by¾

 

(i)    a body corporate established by or under any law for the time being in force with its head office in Bangladesh; or

 

 (ii)  a company as defined in কোম্পানী আইন, ১৯৯৪ (১৯৯৪ সনের

 
 

১৮ নং আইন) with its registered office in Bangladesh and having a subscribed and paid up capital of not less than two million taka on the date of commencement of commercial production;

 

 

(b)   that thirty percent of the exempted income under sub-section (1) is invested in the said undertaking or in any new industrial undertaking during the period of exemption or within one year from the end of the period to which the exemption under that sub-section relates and in addition to that, another ten percent of the exempted income under sub-section (1) is invested in each year before the expiry of three months from the end of the income year in the purchase of shares of a company listed with any stock exchange, failing which the income so exempted shall, notwithstanding the provisions of this Ordinance, be subject to tax in the assessment year for which the exemption was allowed:

 

 

 

Provided that the quantum of investment referred to in this clause shall be reduced by the amount of dividend, if any, declared by the company enjoying tax exemption under this section;

 

 

 

(c)   that the said undertaking is not formed by splitting up or by reconstruction or reconstitution of business already in existence or by transfer to a new business of any machinery or plant used in business which was being carried on in Bangladesh at any time before the commencement of the new business;

 

 

 

(d)   that the said undertaking is approved, and during the relevant income year, stands approved by the Board for the purposes of this section;

 

 

 

(e)   that application in the prescribed form for approval for the purposes of this section, as verified in the prescribed manner, is made to the Board within six months from the end of the month of commencement of commercial production;

 

(f)    that the said undertaking obtained a clearance certificate for the relevant income year from the Directorate of Environment;

 

(g)   that the said undertaking maintains books of accounts on a regular basis and submits return of its income as per provisions laid down in section 75 of this Ordinance.

 

(5) Notwithstanding anything contained in this section, where an undertaking enjoying exemption of tax under this section is engaged in any commercial transaction with another undertaking or company having one or more common sponsor directors, and during the course of making an assessment of the said undertaking if the Deputy Commissioner of Taxes is satisfied that the said undertaking has purchased or sold goods at higher or lower price in comparison to the market price with intent to reduce the income of another undertaking or company, the exemption of tax of that undertaking shall be deemed to have been withdrawn for that assessment year in which such transaction is made.

 

 

 

(6) The Board shall give its decision on an application made under clause (e) of sub-section (4) within forty five days from the date of receipt of the application by the Board, failing which the undertaking shall be deemed to have been approved by the Board for the purposes of this section:

 

 

 

Provided that the Board shall not reject any application made under this section unless the applicant is given a reasonable opportunity of being heard.

 

 

 

(7) The Board may, on an application of any person aggrieved by any decision or order passed under sub-section (6), if the application is made within four months of the receipt of such decision or order, review the previous decision, order or orders and pass such order in relation thereto as it thinks fit.

 

 

 

(8) The income, profits and gains of the undertaking to which this section applies shall be computed in the same manner as is applicable to income chargeable under the head ''Income from business or profession'' :

 

 

 

Provided that in respect of depreciation, only the allowances for normal depreciation specified in paragraph 3 of the Third Schedule shall be allowed.

 

 (9) The income, profits and gains of the undertaking to which this section applies shall be computed separately from other income, profits and gains of the assessee, if any, and where the assessee sustains a loss from such undertaking it shall be carried forward and set off against the profits and gains of the said undertaking for the next year and where it cannot be wholly set off, the amount of the loss not so set off, shall be carried forward for the following year and so on, but no loss shall be carried forward beyond the period specified by the Board in the order issued under sub-section (6) or (7).

 

(10) Unless otherwise specified by the Government, nothing contained in this section shall be so construed as to exempt the following from tax chargeable under this section, namely-

 

(a) any dividend paid, credited or distributed or deemed to have been paid, credited or distributed by a company to its share-holders out of the profits and gains;

 

(b) any income of the said undertaking classifiable as ''Capital gains'' chargeable under the provisions of section 31;

 

(c) any income of the said undertaking resulting from disallowance made under section 30.

 

(11) Where any exemption is allowed under this section and in the course of making assessment, the Deputy Commissioner of Taxes is satisfied that any one or more of the conditions specified in this section are not fulfilled or any individual not being a Bangladeshi citizen is employed or allowed to work without prior approval of any competent authority of the Government for this purpose, the exemption shall stand withdrawn for the relevant assessment year and the Deputy Commissioner of Taxes shall determine the tax payable for such year.

 

 (12) Any such undertaking approved under this section may, not later than one year from the date of approval, apply in writing to the Board for the cancellation of such approval, and the Board may pass such order or orders thereon as it may deem fit.

 

 (13) Notwithstanding anything contained in this section, the Board may, in the public interest, cancel or suspend fully or partially any exemption allowed under this section.

 

 (14) The Board may make rules regulating the procedure for the grant of approval under sub-section (6), review under sub-section (7), furnish information regarding payment of other taxes by the said undertaking, and take such other measures connected therewith or incidental to the operation of this section as it may deem fit.

 

Explanation.- For the purpose of this section set-up means completion of establishment of the industry referred to in this section.]

Exemption from tax of newly established physical infrastructure facility set up between the period of July, 2011 and350[June,351[2019]], etc, in certain cases.

352[46C.353[(1) Subject to the provisions of this Ordinance, income, profits and gains under section 28 from physical infrastructure facility, hereinafter referred to as the said facility, set up in Bangladesh between the first day of July, 2011 and the thirtieth day of June, 354[2019] (both days inclusive) shall be exempted from the tax payable under this Ordinance for ten years beginning with the month of commencement of commercial operation, and at the rate, specified below:

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 

Period of Exemption

Rate of Exemption

For the first first and second year)

100% of income

For the third year)

80% of income

For the fourth year)

70% of income

For the fifth year)

60% of income

For the sixth year)

50% of income

For the seventh year)

40% of income

For the eight year)

30% of income

For the ninth year)

20% of income

For the tenth year)

10% of income

 
 

]

 

2) For the purpose of this section, "physical infrastructure facility"

 

means,-

 

(a) deep sea port;

 

(b) elevated expressway;

 

(c) export processing zone;

 

(d) flyover;

 

(e) gas pipe line,

 

(f) Hi-tech park;

 

(g) Information and Communication Technology (ICT) village or software technology zone;

 

(h) Information Technology (IT) park;

 

(i) large water treatment plant and supply through pipe line;

 

(j) Liquefied Natural Gas (LNG) terminal and transmission line;

 

(k) mono-rail;

 

(l) rapid transit;

 

(m) renewable energy (e.g energy saving bulb, solar energy plant, windmill);

 

(n) sea or river port;

 

(o) 355[toll road or bridge];

 

(p) underground rail;

 

(q) waste treatment plant; or

 

(r) any other category of physical infrastructure facility as the Government may, by notification in the official Gazette, specify.

 

(3) The exemption under sub-section (1) shall apply to the said facility if it fulfils the following conditions, namely:-

 

(a) that the said facility is owned and managed by-

 

(i) a body corporate established by or under any law for the time being in force with its head office in Bangladesh; or

 

(ii) a company as defined in কোম্পানী আইন, ১৯৯৪ (১৯৯৪ সনের ১৮ নং আইন) with its registered office in Bangladesh and having a subscribed and paid up capital of not less than two million taka on the date of commencement of commercial operation;

 

(b) that thirty percent of the exempted income under subsection (1) is invested in the said facility or in any new physical infrastructure facility during the period of exemption or within one year from the end of the period to which the exemption under that sub-section relates and in addition to that, another ten percent of the exempted income under sub-section (1) is invested in each year before the expiry of three months from the end of the income year in the purchase of shares of a company listed with any stock exchange, failing which the income so exempted shall, notwithstanding the provisions of this Ordinance, be subject to tax in the assessment year for which the exemption was allowed:

 

Provided that the quantum of investment referred to in this clause shall be reduced by the amount of dividend, if any, declared by the company enjoying tax exemption under this section:

 
 

(c) that the said facility is approved, and during the relevant income year, stands approved by the Board for the purposes of this section;

 

(d) that application in the prescribed form for approval for the purposes of this section, as verified in the prescribed manner, is made to the Board within six months from the end of the month of commencement of commercial operation;

 

(e) that the said facility maintains books of accounts on a regular basis and submits return of its income as per provisions of section 75 of this Ordinance.

 

(4) The Board shall give its decision on an application made under clause (d) of sub-section (3) within forty five days from the date of receipt of the application by the Board, failing which the facility shall be deemed to have been approved by the Board for the purposes of this section:

 

Provided that the Board shall not reject any application made under this section unless the applicant is given a reasonable opportunity of being heard.

 

(5) The Board may, on an application of any person aggrieved by any decision or order passed under sub-section (4), if the application is made within four months of the receipt of such decision or order, review the previous decision, order or orders and

 

pass such order in relation thereto as it thinks fit.

 

(6) The income, profits and gains of the facility to which this section applies shall be computed in the same manner as is applicable to income chargeable under the head "Income from business or profession":

 

Provided that in respect of depreciation, only the allowances for normal depreciation specified in paragraph 3 of the Third Schedule shall be allowed.

 

(7) The income, profits and gains of the facility to which this section applies shall be computed separately from other income, profits and gains of the assessee, if any, and where the assessee sustains a loss from such facility it shall be carried forward and set

 

off against the profits and gains of the said facility for the next year and where it cannot be wholly set off, the amount of the loss not so set off, shall be carried forward for the following year and so on, but no loss shall be carried forward beyond the period specified by the Board in the order issued under sub-section (4) or (5).

 

(8) Unless otherwise specified by the Government, nothing contained in this section shall be so construed as to exempt the following from tax chargeable under this section :-

 

(a) any dividend paid, credited or distributed or deemed to have been paid, credited or distributed by a company to its share-holders out of the profits and gains;

 

(b) any income of the said facility classifiable as "Capital gains" chargeable under the provisions of section 31;

 

(c) any income of the said facility resulting from disallowance made under section 30.

 

(9) Where any exemption is allowed under this section and in the course of making assessment, the Deputy Commissioner of Taxes is satisfied that any one or more of the conditions specified in this section are not fulfilled 356[or any individual not being a Bangladeshi citizen is employed or allowed to work without prior approval of the Board of Investment or any competent authority of the Government, as the case may be, for this purpose], the exemption shall stand withdrawn for the relevant assessment year and the Deputy Commissioner of Taxes shall determine the tax payable for such year.

 

(10) Any such facility approved under this section may, not later than one year from the date of approval, apply in writing to the Board for the cancellation of such approval, and the Board may pass such order or orders thereon as it may deem fit.

 

(11) Notwithstanding anything contained in this section, the Board may, in the public interest, cancel or suspend fully or partially any exemption allowed under this section.

 

(12) The Board may make rules regulating the procedure for the grant of approval under sub-section (4), review under sub-section (5), furnish information regarding payment of other taxes by the said facility, and take such other measures connected therewith or incidental to the operation of this section as it may deem fit.]

 
Exemption from tax of newly established physical infrastructure facility set up between the period of July, 2019 and June, 2024, etc. in certain cases

357[46CC.   (1) Subject to the provisions of this Ordinance, income, profits and gains under section 28 from physical infrastructure facility, hereinafter referred to as the said facility, set up in Bangladesh between the first day of July, 2019 and the thirtieth day of June, 2024 (both days inclusive) shall be exempted from the tax payable under this Ordinance for ten years beginning with the month of commencement of commercial operation, and at the rate, specified below:

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 

Period of Exemption

 
 

Rate of Exemption

 
 

For the first and second year

 
 

90% of income

 
 

For the third year

 
 

80% of income

 
 

For the fourth year

 
 

70% of income

 
 

For the fifth year

 
 

60% of income

 
 

For the sixth year

 
 

50% of income

 
 

For the seventh year

 
 

40% of income

 
 

For the eighth year

 
 

30% of income

 
 

For the ninth year

 
 

20% of income

 
 

For the tenth year

 
 

10% of income.

 
 

 (2) For the purpose of this section, "physical infrastructure facility" means,-

 

(i) deep sea port;

 

(ii) elevated expressway;

 

(iii) export processing zone;

 

(iv) flyover;

 

(v) gas pipe line;

 

(vi) Hi-tech park;

 

(vii) Information and Communication Technology (ICT) village or software technology zone;

 

(viii) Information Technology (IT) park;

 

(ix) large water treatment plant and supply through pipe line;

 

(x) Liquefied Natural Gas (LNG) terminal and transmission line;

 

(xi) mobile phone tower or tower sharing infrastructure;

 

(xii) mono-rail;

 

(xiii) rapid transit;

 

(xiv) renewable energy (e.g solar energy plant, windmill);

 

(xv) sea or river port;

 

(xvi) toll road or bridge;

 

(xvii) underground rail;

 

(xviii) waste treatment plant; or

 

(xix) any other category of physical infrastructure facility as the Government may, by notification in the official Gazette, specify.

 

(3) The exemption under sub-section (1) shall apply to the said facility if it fulfils the following conditions, namely:¾

 

                       (a)   that the said facility is owned and managed by¾