BDO Tax Handbook 2009-2010

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O ctober 2009
B angladesh
T ax H andbook
2009-2010
Bangladesh Tax Handbook

2009-2010
Foreword
Baizid Md. Faiaz, MBA

Editor
Advisory Board:
Nurul Haque, FCA
Badrul Ahsan, FCA
Fazle R M Hasan, FCA
Faruk U. Ahammed, FCA
Humayan Kabir, ACA
The National Budget of Bangladesh for the year (Fiscal

Year) 2009-2010 was presented by the honorable
Finance Minister Mr. Abul Maal Abdul Muhith before the
legislators in the Parliament. On 30 June 2009 the
finance bill was approved by the parliament and it has
been effective from 01 July 2009.
We have attempted to summarize the salient features of
the new Finance Act 2009 and basic taxation laws/rules
for the benefit of our clients, business houses and
potential investors. This publication has been prepared
for general guidance on matters of interest only, and
does not constitute professional advice.
The information contained in this handbook is based on
taxation laws/rules, but not intended to be a
comprehensive guide. We have given our every effort to
ensure correctness of the information. However, readers
should always seek specific advice before acting on the
information provided in the tax handbook. For further
information and assistance you may contact our office.
JHK Windcel, Western Block, Level 4, KA-90 Pragoti Saroni (Bishwa Road), Dhaka-1229, Bangladesh
Phone: +880-2-884 0533, Fax : +880-2-986 2819, E-mail: info@bcs-bd.com, Web: www.bcs-bd.com
All right reserved

No part of this publication may be reproduced, stored in a retrieval system, or
transmitted in any form or by any means, electronic, mechanical, photocopying
recording, or otherwise without prior written permission of the Publisher.
Index
Particulars
Changes in Taxation Laws 2009-2010
Income Tax
Value Added Tax
Summary in Taxation Laws 2009-2010
Income Tax
Definitions
Income Tax Authorities
Appellate Tribunal
Heads of Income
Income Deemed to Accrue or Arise in Bangladesh
Deemed Income
Scope of Total Income
Charge of Additional Tax
Charge of Excess Profit Tax
Income Exemption Limit
Personal Tax Rate Structure
Tax Rebate for assesses paying tax at the highest rate of 25%
Minimum Tax (Individual)
Incidence of Tax on Non-Resident
Special Tax Treatment for Investments in New Industry / Infrastructural Facility
Special Tax Treatment for Investments in BMRE of existing industry
Special Tax Treatment for Investments in Stocks & Shares
Special Tax Treatment for Investments in House Property
Income fully Exempted from Tax subject to prescribed conditions and limitations
Investment Allowance for Tax Rebate
Income from Salary
Income from House Property
Income from Interest on Securities
Income from Business or Profession
Rates of Corporate Tax are as follows:
Allowable Deductions on income from Business or Profession
Normal Depreciation Allowance
Initial depreciation
Accelerated Depreciation
Deductions are NOT admissible in certain circumstances
Capital Gains
Exemption of Capital Gains from tax
Capital Gain Tax
Income from Other Sources
Set-Off of Losses
Carry forward of loss
Carry forward of Depreciation Allowance
Withholding Tax / Tax Deducted at Source (TDS)
Procedure of deduction or collection of tax at source
Tax Holiday for newly established industrial undertaking, Tourist Industry and Physical Infrastructure facility
Tax Holiday for Hospitals
New List of eligible sectors for Tax Holiday
Advance Payment of Tax
Payment on the Basis of Return
Mode of payment of Tax by assessee
Filing of Return of Income and Statement
Assessments
Final Discharge of Tax Liability
Avoidance of Double Taxation
Relief in respect of Foreign Income
Value Added Tax
Deduction of VAT at source
Gift Tax
Gift Tax
Exemption from Gift Tax
Provisions of the Gift Act shall NOT apply to following gifts made by
Return of Gift Tax
Rates of Gift Tax
Page nos.
5-12
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68
Major Changes in
Bangladesh Taxation Laws
2009-2010
Income Tax
Value Added Tax
JHK Windcel, Western Block, Level 4

KA-90 Pragoti Saroni (Bishwa Road),
Dhaka-1229, Bangladesh
Phone: +880-2-884 0533, Fax : +880-2-986 2819
E-mail: info@bcs-bd.com, Web: www.bcs-bd.com
1.
Tax Exemption Limit:

The ceiling of minimum tax exempted income for the individual assessee has been remained
same as Taka 165,000, while this limit for the individual female, persons aged 65 years (earlier
70) & more has been Taka 180,000. Limit for disabled assessee has been enhanced from
Taka 180,000 to Taka 2,00,000 with effect from Financial Year 2008-2009 (Assessment Year
2009-2010).
2.
Personal Tax Rate Structure:

The 5 tier Income slabs and Tax rates for individual assessee (including Non-resident
Bangladeshi) remain same for the Income Year 2008-2009 (Assessment Year 2009-2010) as per
following table:
Income Year 2008-2009
(Assessment Year 2009-2010)
Income Slabs
i.
3.

Tax Rates
On the first Taka 165,000

of total income for Male
Nil

of total income for Female,
persons aged 65 & above
On the first Taka 200,000 of
total income for Disabled
assessees
Income Slabs
i.
Tax Rates

Nil
Nil

Nil
Nil
On the first Taka180,000 of

assessees
Nil
On the next Taka 275,000 of

total income
10%
ii. On the next Taka 275,000

of total income
10%
ii.
iii. On the next Taka 325,000

of total income
15%

of total income
15%
iv. On the next Taka 375,000

of total income
20%

of total income
20%
v. On the balance of total

income
25%
v.
On the balance of total income
25%
Non-Resident (Foreign) assessee
25%
Income Tax
25%
Minimum Tax: Individuals
Tk. 2,000
Minimum Tax: Individuals Tk. 2,000
Minimum Tax (Company)
Tk. 5,000
N/A
N/A
Minimum Tax (Individual):

Minimum tax for individual assessees has been remained same as Taka 2,000, whose taxable
income exceeding exemption limit of Taka 165,000 or Taka 180,000 or Taka 200,000 or Taka
215,000 or Taka 230,000 or Taka 250,000 (as the case may be). If minimum tax becomes less
than Taka 2,000 or negative after adjusting Investment Tax Credit, individual assessees have to
pay Taka 2,000 as minimum tax.
Bangladesh Tax Handbook 2009-2010
Income Tax
Minimum tax exempted income for female, persons aged 65 years & more (earlier 70) and
disabled assessees having only agricultural income has been Taka 230,000 and 250,000
respectively while for other assesees this limit is Taka 215,000.
04. Minimum Tax for Companies:
Minimum Tax for Companies has been fixed at Taka 5,000 irrespective of profit or loss.
5.
Investment Allowance for Tax Credit: [Section: 44]

Maximum ceiling for Investment Allowance has been enhanced from Taka 500,000 to Taka
1,000,000, subject to maximum of 25% of the total income, excluding employers contribution
to recognized PF & interest thereon, and actual investment made by assessee, whichever is
lower.
Tax Rebate @ 10% on Investment, whichever is lower among the respective three above
alternatives, shall be allowed.
06. Reduction in Tax Rate of Banks, Financial Institutions & Insurance Companies:
Corporate Tax rate for Banks, Financial Institutions & Insurance Companies has been
reduced to 42.5% from 45%.
07. Special Tax Treatment for Investments in New Industry / Infrastructural Facility
(u/s 19A):
No question as to the source of investment will be asked if money is invested in a company
for setting up new industry or physical infrastructural facility between 01 July 2009 and 30
June 2010 by paying tax @ 10% before submission of the tax return. In this regard, a
declaration under Rule 25AA shall have to be furnished. New industries include:
Textiles
IT enabled services
Light engineering Agro processing industry
Spinning
Computer hardware
Melamine
Agricultural machinery
Textile machinery Drugs and Pharmaceuticals
Plastic products
Shrimp processing industry
Garments
Chemicals and
Pharmaceuticals
Ceramics
Milk processing industry
Leather goods
Basic raw materials of

drugs
Sanitary ware
Toys
Insecticide, pesticide
Furniture
Petro chemicals
Tour operators
Cosmetics and toiletries
Tourism industry
Fertilizer
Foot wear
Basic chemicals and dyes
Recycling industry Herbal medicine
Jute goods producing

industry
Energy saving bulb
Steel
industry
MS rod & CI sheet Diamond cutting industry
Accumulator & battery
MS billet
industry
Any other industry as may
Boilers
be approved by Govt.
Ship building
Compressors
Physical Infrastructure Facilities will include River or sea-port; container terminals;

internal container depot; container freight station, Liquefied National Gas (LNG) terminal &
transmission line; gas pipe line; flyover; elevated road; mono-rail; underground rail;
telecommunication other than mobile phone; large water treatment plant & supply through
pipe line; waste treatment plant; solar energy plant and any other category of industry as the
government may by notification in the official gazette specify.
08. Declaration on Investments in New Industry / Infrastructural Facility (Rule 25AA):
A declaration in the prescribed format shall have to be furnished by the person investing in a
company for setting up new industry or physical infrastructural facility by paying tax @ 10%
u/s 19A:
Income Tax
Declaration under section 19A for Special tax treatment:

The declaration to be furnished as required under section 19A of the Income tax
Ordinance, 1984 shall be in the following manner:(1)
Name and address of the assessee:________________________________________
(2)
TIN : __________________________
(3) Name of the (a) Circle: ____________________ (b) Taxes Zone: __________________
(4)
Name of the industrial undertaking in which the investment is made/to be made ______
(5)
Source(s) of Investment (in figures): __________ (in words) _____________________
(6) Probable date of completion of investment ___________________________________

(7) Tax paid:
(a) Amount (in figures)_____________ (in words)_____________________________
(b) Challan/Pay-order
No.:___________________________________________________
Bank:____________________________________ Date:________________________
(8) Number of employees to be employed in the industrial undertaking in which the
investment is made/to be made___________________________________________
I solemnly declare that to the best of my knowledge and belief the information given above is
correct and complete.
Name and signature of the assessee
Date: ______________
Income Tax
09. Special Tax Treatment for Investments in BMRE of existing industry (u/s 19AA):
No question as to the source of investment will be raised if money is invested by a
person in the expansion or balancing, modernization, renovation and expansion of an
existing industry between 01 July 2009 and 30 June 2010 by paying tax @ 10% of the sum
invested before submission of the tax return.
10. Special Tax Treatment for Investments in Stocks & Shares (u/s 19AAA):
No question as to the source of investment will be raised if money is invested
(individuals, firm, association, private company) in the purchase of Stocks and Shares of
any listed company in Bangladesh between 01 July 2009 and 30 June 2010 by paying tax @
10% on the invested amount before submission of the tax return. Provided that such
investment shall not be withdrawn or transferred for any other purpose within 2 years from
the date of purchase. Also, this will not be applicable where concealment of income
has been detected or proceedings u/s 93 have been initiated prior to payment of tax.
11.
Special Tax Treatment for Investments in House Property (u/s 19BBBB):

No question shall be raised as to the source of investment if money is invested by any
person during the period between 01 July 2009 and 30 June 2010 in the construction or
purchase of any building or apartment by paying tax before the assessment is completed at
the following rate:.
Sl.
a
Area
Area Plinth Area of flat/house
Tax Rate
Gulshan, Banani, Baridhara,

DOHS, Dhanmondi, Lalmatia,
Uttara, Bashundhara, Dhaka
Cantonment, Motijheel, Dilkusha,
Kawranbazar and Khulshi &
Patchlise of Chittagong.
Upto 100 Sq. meter
Per SqM TK. 800
More than 100 but not

exceeding 200 Sq. meter
Per SqM Tk. 1,000
More than 200 Sq. meter
Per SqM Tk. 1,500
Area other than specified in (a)
Upto 100 Sq. meter
Per SqM Tk. 400

Per SqM Tk. 600
Per SqM Tk. 1,000
12. Computer / Laptop to consider as Investment (Sixth Schedule, Part-B, Para 23):
Purchase of one computer or one laptop by an individual assessee shall qualify for
investment allowance, subject ot maximum Taka 100,000 for one toptop and Taka 50,000 for
one desktop computer.
13. Normal Depreciation Allowance on Bangladeshi Software (Third Schedule):
Normal Depreciation Allowance on Bangladeshi made Computer Software has been allowed
@ 50% { Para 3, Sl (3) (2) (b) ((vi)}.
14.
Change of Rate of Withholding Tax (TDS):

Sl
Head of withholding
Withholding rate/ rates of tax
Compensation against acquisition

of property (sec-52 C)
2% of the amount of such

compensations
Foreign technician serving in

diamond cutting industries (Sec52O)
5% (Final settlement u/s 82C)
NA
Shipping Business of a resident

(Sec-53AA)
5% of the total freight in

Bangladesh.
5% of the total
freight received or
receivable in or out
of Bangladesh.
3% of the total freight for

services rendered between two
or more foreign countries
4
Collectiuon of tax from certain

items (Sec-53BB)
Member of stock exchange (Sec53BBB)
Last year
6% of the amount of
such compensations
Deduction from export cash

subsidy (Sec-53DD)
TDS 0.25% on Export proceed

from knit wear, woven
garments, terry towel, jute
goods, frozen food, vegetables,
leather goods, packed food
0.025%
Income Tax
TDS 0.25% on
Export of knitwear
and woven
garments
0.015%
withdrawn
15. Tax Holiday for Housing Income (Sixth Schedule, Part-A, Para 38):
Any income derived from any building situated in any area of Bangladesh (other than areas of city
corporation, Cantonment board, Tongi Upazila, Naryangonj Paurashava, Gazipur Paurashava
and any Paurashava under Dhaka district), not less than five storied having at least ten flats,
constructed at any time between 01 July 2009 and 30 June 2014 for ten years from the date of
completion of construction of the building has been declared tax free.
16. Income Exempted on Interest / Profit from Pensioners Savings Certificate (Sixth
Schedule, Part- A, Para 41):
Any income received by an assessee as interest or profit from Pensioners Savings
Certificate is declared tax free.
17. Payment of Tax for new TIN (u/s 184 B & Rule 64B ):
New Tax registration and certificate will be issued on payment of tax of Tk. 1,000.
18.
Tax Holiday for Power Generation Companies (SRO 188/Ain/tax/2009 dated 01 July 2009):
Power Generation Companies commencing commercial production by 30 June 2012 shall
enjoy following benefits:
a. Tax holiday on the Income of the company for next 15 years from the date of
commercial production.
b.
No tax on the Income of Expatriates working for the company for 3 years from the date
of their arrival.
Income Tax
c. Interest on foreign loan.
d. Exemption of Royalty, Technical Know-how and Technical Fee payable by the company.
e. Exemption of tax on Capital Gain arisen by transfer of company's shares.
19. Tax at reduced rate for certain Industries (SRO 172-Ain/Ttax/2009 dated 30th June 2009):
Tax at concessional rate shall be applied on the income of newly established industries to be
set up between 01 July 2009 and 30 June 2012. The rate will vary from location to
location for newly established industries:
Division
Dhaka and Chittagong (except Rangamati,
Bandarban, Khagrachari)
Rajshahi, Khulna, Barishal, Sylhet including

Rangamati, Bandarban, Khagrachari
Years
Tax rate
1st and 2nd year
5%
3rd and 4th year
10%
5th year
15%
1st ,2nd & 3rd year
5%
4th , 5th & 6th year
10%
7th year
15%
3
3
Companies must be incorporated under Companies Act, 1994

Applicable for selected class of industries
This facility will not be applicable for any extension unit
Cannot enjoy accelerated depreciation
Must submit annual income tax return timely alongwith audited financial statements
20. Tax on Motor Vehicles owners (SRO 187/Ain/tax/2009 dated 01 July 2009):
Imposed Tax on the owners of Motor Vehicle is payable at the time of registration or renewal
of fitness at the following rate annually:
10
Type of Vehicles
Income Tax per Vehicle
Car upto 1500 CC
Tk. 3,000
Car upto 2000 CC
Tk. 4,000
Car over 2000 CC
Tk. 7,000
Jeep upto 2800 CC
Tk. 6,000
Jeep over 2800 CC
Tk. 8,000
Micro Bus
Tk. 3,000
Paid tax will be adjusted with the tax payable by the assessee on his/her total income
This tax is not applicable for vehicle owners being government & semigovernment organizations, autonomous bodies and diplomatic missions.
21. Tax on Water Transport Vehicles (passenger) and Cargo Vessels, Costars or Dump Barge, etc.
(SRO 173-Ttax/2009 dated 30th June 2009): Imposed Tax on Water Transport Vehicles
(passenger) and Cargo Vessels, Costars or Dumpbarge, etc is payable at the time of
Registration or renewal of Survey Certificate at the following rates on the basis of its capacity:
Type of Vessels / Cargo vessels (not older
than 10 years)
Income Tax per Vessel
For Passenger Vessel
Tk. 50 per passenger capacity
Cargo Vessels or Costars
Tk. 75 per gross ton capacity
Dump Barge
Type of Vessels / Cargo vessels

(older than 10 years)
Income Tax per Vessel
For Passenger Vessel
Cargo Vessels or Costars
Dump Barge
Value Added Tax
Tk. 25 per passenger capacity
This tax is not applicable for Oil Tankers.
22. Enhancement of Allowable Limit of Royalty, Technical Knowhow / Service / Assistance Fees
(u/s 30h):
Allowable limit of Royalty, Technical services fees, technical know how fee, technical
assistance fee has been enhanced to 8% of the profit, in place of 5%.
23. Special Incentive for investment in business or profession [U/S 82 BB(4) & (5)]:
No question as to source of investment made by a new assessee deriving income from new
business or profession shall be raised, if he shows income at least 25% of the capital
invested and pays tax before filing return. The initial investment or part thereof shall not be
transferred or lent out in any manner within five years from the end of assessment year.
24. Revisional Power of Commissioner (u/s 121A):
The Commissioner of Taxes has been empowered to make a revision of the order passed by
his subordinate, on application by the assessee within 60 days paying undisputed amount of
tax if no appeal has been filed or decision is pending with other authority, and pass an Order
thereon, as he thinks fit.
25. Reduced Rate of payment of tax before filing Appeal against the Order of Appellate
Joint Commissioner (u/s 158):
Provision for payment of tax before an Appeal is filed against the Order of Appellate Joint
Commissioner or Commissioner (Appeal) has been reduced to 5%, in place of 10% (u/s
158). However, assessee has to pay tax @ 10% of the difference between tax as per Order of
Appellate Joint Commissioner or Commissioner (Appeal) and Appellate Tribunal (u/s 160).
11
Income Tax
26.
Requirement of TIN Certificate (u/s 184 A):

A TIN certificate has been made compulsory in the following cases:
a.
Submission and authorization of any plan for construction of any house property by the
RAJUK, RDA, CDA, KDA [u/s184A (o)]
b.
Issuance of Drug License [u/s184A (o)]
27. Mode of payment of Tax by assessee : (Rule 26A)

All payments of tax shall be made by pay order or demand draft or account payee cheque of
a scheduled bank issued in favour of concerned DCT subject to any payment does not
exceed Taka 10,000 (Previous Taka 5,000) made through treasury challan.
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12
Value Added Tax

1. VAT Impossed on House Rent (SRO # 105-Ain/2009/513)
Vat @ 15% has been introduced on any floor space, establishment, furniture, fixtures and
fittings used for commercial purpose.
2. Determination of tariff value for VAT
a. Biscuit produced in mechanized system is valued Taka 60 per kg for ordinary biscuit.
b. Biscuit produced in mechanized systems is valued Taka 80 per kg for chocolate or
cream biscuit.
3. Relieve from scope of VAT (SRO # 182 Ain/2009/535, dated 30 June 2009)
a. Refrigerator and Freezer producers will get exemption upto 30.06.2010 subject to having:
3 Poly urethane foaming plant
3 Prowder coating plant
3 Injection molding machine
3 ETP plant
3 Thermoforming plant
3 Gasket making plant and
3 Packing unit
4.
5.
6.
Value Added Tax
b. Motor bike producers will get exemption upto 30.06.2010 subject to having:
3 Powder coating plant
3 Injection molding machine
3 ETP Plant
3 Computerized testing section
3 Power press and
3 Hydraulic press machine
Enhancement of Area Regarding Turnover Tax & Cottage Industry:
a. Turnover Tax @ 4% if annual turnover of taxable goods or services is less than Taka
4,000,000 (Previous Taka 2,400,000);
b. Investment of Cottage Industry does not exceed Taka 2,500,000 (Earlier 1,500,000) and
corresponding annual turnover does not exceed Taka 4,000,000 (Earlier 2,400,000);
Scope of VAT (SRO # 179 Ain/2009/532-Mushak, dated 30.06.09)
3 Furniture sales centre
3 At production stage @ 4.5%
3 At trading stage @ 1.5% subject to having the treasury challan for payment at 4.5%
SRO # 176 Ais/2009/529-Mushak
Furniture sales centre means the place of production, repair and trade of own
production or furniture produced from other.
Others:
a. Cottage industry may involve with sub contract for production of local brand subject to
declaration of price to the VAT divisional officer. (SRO # 181-Ain/2009/534)
b. Registration for Taxable goods or Services must have at least annual turnover Taka
4,000,000; (Previous 2,400,000)
c. ATV (Advance Trade VAT is 2.25% (earlier 1.5%)
13
JHK Windcel, Western Block, Level 4,

KA-90 Pragoti Saroni (Bishwa Road),
Dhaka-1229, Bangladesh
Phone: +880-2-884 0533, Fax : +880-2-986 2819,
E-mail: info@bcs-bd.com, Web: www.bcs-bd.com
Summary in Taxation Laws

2009-2010
Income Tax
Value Added Tax
Gift Tax
Income Tax
1.
Definitions:
a.
Assessee [Section: 2(7)]: Assessee means a person by whom any tax or other sum of
money is payable under Income Tax Ordinance 1984.
b.
Person [Section: 2(46)]: Person includes an individual, a firm, an association of

persons, a Hindu undivided family, a local authority, a company and every other artificial
juridical person.
c.
Income [Section: 2(34)]: Income means any sum of income or gain from whatsoever
source derived, or accruing or arising or received or deemed to be accrue or arise or to
be received under any provision of IT Ordinance 1984
d.
Tax [Section: 2(62)]: Tax means the income tax payable under the Income Tax
Ordinance 1984 and include any additional tax, excess profit tax, penalty, interest, fee or
other charge leviable or payable under the IT Ordinance 1984.
e.
Income Year [Section: 2(35)]: Income Year means the financial year immediately
preceding the assessment year or when accounts are closed on a date within the
financial year, the twelve months ending on the date on which accounts are closed
f.
Assessment Year [Section: 2(9)]: Assessment Year means the period of twelve months
beginning from first day of July of every year. This is the immediate following financial
year of Income Year. Examples of Accounting Year, Income Year and Assessment year:
Accounting Period / Year
Income Year Assessment Year
Accounting Year: July 2008 to June 2009
2008-09
2009-10
Accounting Year: January 2008 to December 2008
2008-09
2009-10
Accounting Year: April 2007 to March 2008
2007-08
2008-09
Accounting Year: October 2007 to September 2008
2008-09
2009-10
Accounting Year: August 2007 to July 2008
2008-09
2009-10
g.
Annual Value [Section: 2(3)]: Annual value means the sum arising from letting out any
property and related furniture, fixture and fittings or any sum received as Annual Rent
which ever is higher.
h.
Basis of Residence [Section: 2(55)]:

i.
Individual: An individual will be Resident:

if he stays in Bangladesh for a period of or for the periods all together at least
182 days or more in the income year or
if he stays in Bangladesh for a period of or for the periods all together at least 90
days or more in the income year and 365 days or more during the immediate
four preceding years of income year.
ii.
16
Company: The company will be resident if the management of its affairs is situated
wholly in Bangladesh in the income year.
Income Tax
iii. Hindu Undivided Family, Firm, Other Association of Persons: They will be
resident if its control and management of affairs is situated wholly or partly in
Bangladesh in the income year.
i.
Non-resident [Section: 2(42)]: Non-resident means a person who is not a resident.
j.
Perquisites [Section 2(45), 30(e)]: Perquisite limit Taka 200,000. Anything paid in
excess of allowable perquisite limit is taxed in the hands of employer.
k.
2.
Salaries [Section 2(58) and 18]: Salary includes:

i. any wages;
ii. any annuity, pension or gratuity;
iii. any fee, commission, allowance, perquisites or profit in lieu of, or in addition to,
salary or wages;
iv. any advance of salary;
v. any leave encashment;
Income Tax Authorities [Section 3]:

The
3
3
3
3
3
3
3
3
3
3
3
3
3
Hierarchy of Incone Tax Authorities; namelyNational Board of Revenue (NBR)

Director General of Inspection (Taxes)
Commissioner of Taxes (Appeals)
Commissioner of Taxes (LTU )
Director General (Training)
Director General (CIC)
Commissioner of Taxes
Additional Commissioner of Taxes (ACT):
Appellate ACT or
Inspecting ACT
Joint Commissioner of Taxes (JCT)
Appellate JCT or
Inspecting JCT
Deputy Commissioner of Taxes (DCT)
Tax Recovery Offcer (TRO)
Assistant Commissioner of Taxes
Extra Assistant Commissioner of Taxes
Inspectors of Taxes
Perquisite means any payment made to an employee in the form cash or in any other
form excluding: basic salary festival bonus arrear salary advance salary
overtime leave encashment leave fare assistance incentive bonus maximum upto
10% of disclosed profit of relevant income year contribution to a recognized Provident
Fund, Pension Fund and Superannuation Fund.
17
Income Tax
3.
Appellate Tribunal [Section 11]:

Taxes Appellate Tribunal [TAT] consists of a president and other members appointed
by the Govt. A person shall not be appointed as a member unless-
4.
18
a.
He was or is a member or current charge of a member of the board.
b.
He was or is a Commissioner of Taxes.
c.
He is a CA and practice not less than 8 years.
d.
He is a CMA and practice not less than 8 years.
e.
He is an ITP and practice not less than 20 years.
f.
He is a legislative expert having not less than 8 years experience.
g.
He is an advocate and practice in any Income Tax office not less than 10 years.
Heads of Income [Section 20]:

a.
b.
c.
d.
e.
f.
g.
Salaries [Section 21];

Interest on Securities [Section 22 & 23];
Income from House Property [Section 24 & 25];
Agricultural Income [Section 26 & 27];
Income from Business or Profession [Section 28, 29 & 30];
Capital Gains [Section 31 & 32];
Income from Other Sources [Section 33 & 34];
Income Deemed to Accrue or Arise in Bangladesh [Section 18]:

The following income shall be deemed to accrue or arise in Bangladesh, namely:
a. Any income which falls under the head Salaries, wherever paid, if [Section 18(1)]:
it is earned in Bangladesh; or
it is paid by Bangladesh Government or local authority in the service of such
government or authority;
b. Any income accruing or arising, whether directly or indirectly, through or from [Section 18(2)]:
any business connection in Bangladesh;
any property, asset, right, other source of income in Bangladesh;
transfer of capital assets in Bangladesh;
c. Any dividend paid outside Bangladesh by a Bangladeshi company [Section 18(3)]
d. Any income by way of interest payable [Section 18(4)]:
by the government; or
by a person who is resident / non-resident in Bangladesh;
e. Any income by way of fees for technical services payable [Section 18(5)]:
f. Any income by way of royalty payable [Section 18(6)]:
Income Tax
6
Deemed Income: [Section 19]
Unexplained Cash credit - Income from Other Source [Section 19(1)]
ii
iii
Unrecorded investment or possession of bullion, jewellery etc. - Income from Other

Source [Section 19(2)]
Unexplained expenditure - Income from Other Source [Section 19(3)]
iv
Unrecorded investment - Income from Other Source [Section 19(4)]
Ownership of any money, bullion etc. - Income from Other Source [Section 19(5)]
vi
Income received from discontinued business - Income from Business or Profession

[Section 19(6)]
vii
Receipt of Dividend - Income from Other Source [Section 19(7)]
viii
Difference between the purchase price and fair market value - Income from Other
Source [Section 19(8)]
ix
Salami or Premium - Income from Other Source [Section 19(9)]
Goodwill, compensation or damages, etc. - Income from Other Source [Section 19(10)]
xi
Cancellation of indebtedness - Income from Other Source [Section 19(11)]
xii
Managing Agency Commission - Income from Other Source [Section 19(12)]
xiii
Lotteries, crossword puzzles etc. - Income from Other Source [Section 19(13)]
xiv
Income from Insurance Business - Income from Business or Profession [Section 19(14)]
xv
Receipt back of loss, bad debt or expenditure and unpaid trading liability etc. Income from Business or Profession [Section 19(15)]
xvi
Income from sale of depreciated assets having been used for the purpose of any
business or profession - Income from Business or Profession [Section 19(16)]
xvii
Income from sale of depreciated assets having been used for agricultural purpose Income from Agriculture [Section 19(17)]
Unexplained cash credits, investments, possession of bullion, unpaid trading liabilities/ loan
etc. will be treated as deemed income, which are mentioned below in brief with relevant
heads of income and respective sub-section:
xviii Income from receipt of insurance, salvage or compensation moneys in respect of

assets having been used for the purpose of any business or profession - Income
from Business or Profession [Section 19(18)]
xix
Income from receipt of insurance, salvage or compensation moneys in respect of

assets having been used in agriculture - Income from Agriculture [Section 19(19)]
xx
Income from sale of assets of capital nature - Income from Business or Profession
[Section 19(20)]
xxi
Unpaid loan Taka 100,000 (earlier Taka 50,000) is to be recognized as income immediately
after expiry of 3 years of loan taken. Income from Other Source [Section 19(21)]
19
Income Tax
xxii
Un-adjustable security money taken from tenant - Income from House Property
[Section 19(22)]
xxiii
Income from transfer of export quota by Garments Industry - Income from Business
or Profession [Section 19(23)]
xxiv Investment by a private limited company or a public limited company in its equity
received from share holder or director not being received by cross cheque - Income
from Other Source [Section 19(24)]
7.
Scope of Total Income [Section 17]
The total income of any income year of any person includes:
8.
Resident
Non-Resident
All income from whatever sources including

received or deemed to be received in
Bangladesh; accrue or arises or deemed to
accrue or arises in Bangladesh; or accrue or
arises outside Bangladesh
All income from whatever sources including

received or deemed to be received in
Bangladesh; accrue or arises or deemed to
accrue or arises in Bangladesh
Charge of Additional Tax [Section 16B]:

If a publicly traded company (other than banking or insurance company) does not issue,
declare or distribute dividend or bonus share equivalent to at least 15% of its paid up capital
within 6 months following its income year, it will be charged 5% additional tax on undistributed
profit in addition to tax payable under IT Ordinance 1984. Here undistributed profit means
accumulated profit including free reserve.
9.
Charge of Excess Profit Tax [Section 16C]:

If a banking company operating under Banking Companies Act 1991 shows a profit
exceeding 50% of the aggregate sum of capital and reserve, the bank shall pay @ 15% tax of
such excess amount. Such tax is payable in addition to tax payable under IT Ordinance 1984.
10. Income Exemption Limit:

Tax exemption income limit of individual assesses is Taka 165,000 for male, while this limit for
female, persons aged 65 (earlier 70) years & above has been fixed at Taka 180,000 and for
disabled assesses this limit ennanced from Taka 180,000 to Taka 200,000 with effect from
Income Year 2008-2009 (Assessment year 2009-2010).
11. Personal Tax Rate Structure:
Taxable income slab and tax rates have been changed for personal income tax. The Five-tier
taxable income slabs and tax rates for individual assessees (including Non-resident
Bangladeshi) applicable for the assessment year 2008-2009 and 2009-2010 are as follows:
20
Income Tax
Income Slabs
i.

Tax Rates

Nill

On the first Taka 200,000 of
assessees
Income Slabs
i.
Tax Rates

Nill
Nill

Nill
Nill
On the first Taka180,000 of

assessees
Nill
On the next Taka 275,000 of

total income
10%
ii. On the next Taka 275,000

of total income
10%
ii.

of total income
15%

of total income
15%

of total income
20%

of total income
20%
v. On the balance of total

income
25%
v.
On the balance of total income
25%
25%
25%
Minimum Tax: Individuals
Tk. 2,000
Minimum Tax: Individuals Tk. 2,000
Minimum Tax (Company)
Tk. 5000
N/A
N/A
12. Tax Rebate for assesses paying tax at the highest rate of 25%
Individual assesses paid tax @ 25% during the assessment year 2008-2009 with declaration
of more than 10% higher income in 2009-2010 will get 10% tax rebate on tax attributable to
that additional higher income declared in 2009-2010 assessment year.
13

Minimum Tax (Individual):

Minimum tax for individual assessees has been remained same as Taka 2,000, whose income
exceeding exemption limit of Taka 165,000 or Taka 180,000 or Taka 200,000 or Taka 215,000 or
Taka 230,000 or Taka 250,000 (as the case may be). If minimum tax becomes less than Taka
2,000 or negative after adjusting Investment Tax Credit, individual assessees have to pay Taka
2,000 as minimum tax.
Minimum tax exempted income for female, persons aged 65 (earlier 70) years & more and
disabled assessees having only agricultural income has been enhanced from Taka 230,000
and Taka 250,000 respectively while for other assesees this limit is Taka 215,000.
14. Incidence of Tax on Non-Resident:

a.
A person who is a non-resident is liable to tax on the incomes, profits and gains which
are received or deemed to have been received or are deemed to accrue or arise to him
in Bangladesh.
21
Income Tax
b.
c.
d.
A non-resident assessee is not entitled to any sort of allowance and relief as are
admissible to a resident assessee for the purpose of tax rebate;
A non-resident assessee (other than Bangladeshi non-resident) is liable to tax on his
total income @ 25%.
A Bangladeshi non-resident is subject to tax at normal rate, as applicable for a resident
assessee.
15. Special Tax Treatment for Investments in New Industry / Infrastructural Facility (u/s 19A):
No question as to the source of investment will be asked if money is invested in a company

for setting up new industry or physical infrastructural facility between 01 July 2009 and 30
June 2010 by paying tax @ 10% before submission of the tax return. In this regard, a
declaration under Rule 25AA shall have to be furnished. New industries include:
Textiles
IT enabled services
Light engineering Agro processing industry
Spinning
computer hardware
Melamine
Agricultural machinery
Textile machinery drugs and Pharmaceuticals Plastic products
Shrimp processing industry
Garments
Chemicals and
pharmaceutical
Ceramics
Milk processing industry
Leather goods
Basic raw materials of

drugs
Sanitary ware
Jute goods producing ind.
Toys
Insecticide, pesticide
Steel
Furniture
Petro chemicals
Tour operators
Cosmetics and toiletries
Tourism industry
Fertilizer
Foot wear
Basic chemicals and dyes
Recycling industry Herbal medicine
Energy saving bulb

industry
MS rod & CI sheet Diamond cutting industry
Accumulator & battery
MS billet
industry
Any other industry as may
Boilers
be approved by Govt.
Ship building
Compressors
16. Special Tax Treatment for Investments in BMRE of existing industry (u/s 19AA):
No question as to the source of investment will be raised if money is invested by a
person in the expansion or balancing, modernization, renovation and expansion of an
existing industry between 01 July 2009 and 30 June 2010 by paying tax @ 10% of the sum
invested before submission of the tax return.
17. Special Tax Treatment for Investments in Stocks & Shares (u/s 19AAA):
No question as to the source of investment will be raised if money is invested (individuals,
firm, association, private company) in the purchase of Stocks and Shares of any listed company
in Bangladesh between 01 July 2009 and 30 June 2010 by paying tax @ 10% on the invested
22
Income Tax
amount before submission of the tax return. Provided that such investment shall not be withdrawn
or transferred for any other purpose within 2 years from the date of purchase. Also, this will
not be applicable where concealment of income has been detected or proceedings u/s 93 have
been initiated prior to payment of tax.
18.
Special Tax Treatment for Investments in House Property (u/s 19BBBB):

No question shall be raised as to the source of investment if money is invested by any
person during the period between 01 July 2009 and 30 June 2010 in the construction or
purchase of any building or apartment by paying tax before the assessment is completed at
the following rate:.
19
Area
Area Plinth Area of flat/house
Tax Rate
Gulshan, Banani, Baridhara,

DOHS, Dhanmondi, Lalmatia,
Uttara, Bashundhara, Dhaka
Cantonment, Motijheel, Dilkusha,
Kawranbazar and Khulshi &
Patchlise of Chittagong.
Upto 100 Sq. meter
Per SqM TK. 800

Per SqM Tk. 1,000
Per SqM Tk. 1,500
Area other than specified in (a)
Upto 100 Sq. meter
Per SqM Tk. 400

Per SqM Tk. 600
Per SqM Tk. 1000
Income fully Exempted from Tax subject to prescribed conditions and limitations
[Section 44(1) and Part A of Sixth Schedule]:
Certain incomes are totally exempted from tax and they are not includable with other income
even for rate purpose. Income specified in Part-A of the Sixth Schedule (Exclusions from Total
Income) of the Income Tax Ordinance 1984 are exempt and excluded from the computation of
total income subject to limits, conditions and qualifications laid down therein:
i.
Income from property held under Trust but shall not apply to NGOs registered with
NGO Affairs Bureau [Para # 1]
ii.
Any income derived from micro credit operations by NGOs registered with NGOAB
[Para # 1A]
iii.
Income of a religious or charitable institution derived from voluntary contributions. [Para # 2]
iv.
Income of Local Government [Para # 3]
v.
Income of Provident Fund and other Funds [Para # 4]
Sl
23
Income Tax
vi.
Traveling Allowances, etc. (to meet expenses wholly and necessarily incurred in
performance of the duties of an office or employment of profit) incurred [Para # 5]
vii.
Income of Trustees on behalf of any recognized fund [Para # 6]
viii.
Income of the personnel of the foreign missions, not being a citizen of Bangladesh
[Para # 7]
ix.
Pension [Para # 8]
x.
Interest on government securities maximum upto Taka 5,000 [Para # 12]
xi.
xii.
Interest on Debentures approved by SEC upto Taka 20,000 including exemption of

interest on Govt. Securities of Taka 5000 [Para # 13]
Share of Capital Gains of a Partner of a Firm [Para # 18]
xiii.
Income of a member of Hindu Undivided Family [Para # 19]
xiv.
Gratuity [Para # 20]
xv.
Any payment received from Provident Fund and other Funds (PF, WPPF and
approved superannuation fund) [Para # 21]
xvi.
Income from dividend of a mutual fund or a unit fund upto taka 25,000 [Para # 22A]
xvii.
Interest on tax-free Government Securities [Para # 24]
xviii. Interest on the balance in a Recognized Provident Fund [Para # 25]

xix.
Payment received on voluntary retirement [Para # 26]
xx.
Income of indigenous Hillman [Para # 27]
xxi.
Income from export business [Para # 28]
xxii.
Income from agriculture upto Taka 50,000 [Para # 29]
xxiii. Income of Mutual Fund [Para # 30]

xxiv. Capital Gains from Machinery or Plant used in business or profession [Para # 31A]
xxv.
Income from Savings Instruments upto Taka 150,000 [Para # 31B]
xxvi. Income from the business of Software Development and Information Technology
Enabled Services (ITES) [Para # 33]
xxvii. Income from fisheries, poultry, production & marketing of seeds, farming (cattle, dairy,
frog & mushroom), horticulture, floriculture and sericulture; if such income exceeds taka
150,000 and at least 10% of income invested in bond & govt. securities [Para # 34]
xxviii. Income from the export of handicrafts [Para # 35]
xxix. Any amount paid by govt. as tax on behalf of Petroleum Exploration Company under
Production Sharing Contract (PSC) [Para # 36]
xxx
24
Income from educational activities of private Agricultural College and University

[Para # 37]
Income Tax
Any income derived from any building situated in any area of Bangladesh (other than areas of
city corporation, Cantonment board, Tongi Upazila, Naryangonj Paurashava, Gazipur
Paurashava and any Paurashava under Dhaka district), not less than five storied having at
least ten flats, constructed at any time between 01 July 2009 and 30 June 2014 for ten years
from the date of completion of construction of the building has been declared tax free.
xxxi
xxxii Income from any Small and Medium Enterprise (SME) having annual turnover not more
than Taka 2,400,000 [Para # 39]
xxxiii. Income from Zero Coupon Bond [Para # 40]
xxxiv. Any income received by an assessee as interest or profit from pensioners saving
certificate [Para # 41]
Investment Allowance for Tax Rebate [Section 44 (2) & (3) and Part B of Sixth Schedule]:
a.
Maximum ceiling of Investment Allowance: Maximum ceiling for Investment

Allowance is Taka 1,000,000, subject to maximum of 25% of the total income excluding
employers contribution to recognized PF & Interest thereon.
b.
Tax Rebate: Tax Rebate @ 10% of the eligible investment shall be allowed as Rebate.
c.
Investments eligible for Tax Rebate:

i)
Life insurance premium paid by an individual [Para # 1]
ii)
Life insurance premium paid by Hindu Undivided Family [Para # 2]
iii)
Contribution to Provident Fund and Other Funds [Para # 3, 4, 5 & 6]
iv)
Investment in Stocks and Shares [Para # 8]
v)
Investment in Debentures or Debenture-Stocks [Para # 9]
vi)
Investment in Unit Certificate etc [Para # 10]
vii)
Contribution in any Deposit Pension Scheme (DPS) [Para # 11]
20
viii) Donation to a charitable Hospital [Para # 11A]

ix)
Donation to organization for the welfare of the retarded people [Para # 11B]
x)
Donation to Zakat Fund [Para # 13]
xi)
Contribution to Benevolent Fund and Group Insurance Scheme [Para # 17]
xii)
Donation of Aga Khan Development Network [Para # 21]
xiii) Donation to philanthropic or educational institution [Para # 22]

xiv) Any sum invested in the purchase of one computer or one laptop by an individual assessee
subject to maximum Taka 100,000 for laptop and Taka 50,000 for desktop. [Para # 23]
21. Income from Salary [Section 21]:
Any income classifiable as salaries irrespective of its place of payment shall be deemed to be
income accruing or arising income in Bangladesh if it is earned in Bangladesh or it is paid by
the government or local authority in Bangladesh to a citizen in Bangladesh.
Salary once included in any year on due basis or advance payment basis is not includible in
the income of any other year.
25
Income Tax
i.
Income classified under the head Salaries: Salaries include the followingany salary due from an employer to the assessee in the income year whether paid or not;
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;
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;
ii.
Perquisites, allowances and benefits includible as income of Salaried Persons:

Extent of perquisites, etc. includible as income under the head salary has been
prescribed in rule 33A to 33J. Basic salary for the purpose of determination of value of
perquisites, allowances and benefits, means the pay and allowances payable monthly or
otherwise but does not include:
dearness allowance or dearness pay unless it includes in the computation of

superannuation or retirement benefits;
employers contribution to a recognized provident fund or a fund to which Provident
Fund Act 1925 applies and the interest thereon;
allowances which are exempt from the payment of tax;
allowances, perquisites, annuities and benefits as referred to sub rule 1 of rule-33;
A share-holder being director of more than one company shall be entitled to the benefit
under rule-33 for one company only.
iii. House rent allowance receivable in cash [Rule # 33A]: House rent allowance in
excess of Taka 15,000 per month or 50% of basic salary or, whichever is less, shall be
included in income.
iv. Rent free accommodation [Rule # 33B]: The rental value of the accommodation or
25% of basic salary, whichever is less, shall be included in income.
v. Conveyance allowance receivable in cash with no conveyance facility [Rule #
33C]: Allowable amount Taka 24,000 per annum the allowance so receivable in excess
of Taka 24,000 per annum shall be included in income.
vi. Conveyance provided exclusively for personal or private use [Rule # 33D]: An
amount equal to 7.5% of basic salary shall be included in income.
vii. Additional conveyance allowance [Rule # 33E]: The whole amount shall be included in income.
viii. Free or concessional passage for travel abroad or within Bangladesh [Rule # 33G]:
Where free or concessional passage for travel abroad or within Bangladesh is provided
by the employer to an employee (including the members of his household and
dependents) shall be included in the income of the employee:
Where the passage is provided in accordance with the terms of employment:
An amount equal to the sum by which the cash payments, if any, made by employer
exceeds the actual expenditure incurred by the employee;
Where the passage is not in accordance with the terms of employment: The
whole of the amount paid in cash and if not paid in cash, the amount which would
have been expended by the employee if not provided by the employer;
26
Where free concessional passage for travel abroad is availed more than once
in two years: The whole of the amount paid in cash, if any, for such additional
passage. If no cash payment is made, the amount which would have been
expended for this passage if not provided by the employer;
Where the transport is provided free of cost or at a confessional rate: By an
undertaking engaged in the transport of passengers or the carriage of goods of an
employee of the undertaking in any conveyance owned or charted by the
undertaking for the purpose of the transport of passengers, nothing shall be added
in his income;
ix. Entertainment allowance [Rule # 33H]: The whole amount shall be included in income
except for free tea, coffee, beverages or the like thereof provided at the office premises
during the course of work.
x. Medical expenses [Rule # 33I]: Receipts / receivable from employer in excess of
actual expenditure shall be included in the income of the assessee.
xi. Other benefits [Rule # 33J]: Equivalent amount shall be included in income.
xii. Allowable exemptions on the income of Sponsor / Shareholder Directors [Rule # 33(2)
(b)]: As per SRO 207-Ain/2005 dated 06.07.2005, a shareholder, being director of more than
one company, shall be entitled to the benefits under rule # 33 for one company only.
22. Income from House Property [Section 24 & 25]:
a. Income from house property whether used for commercial or residential purposes is
taxable on the basis of its annual value. The value determined by the tax authority u/s2(3) will be treated as annual value.
b.
Deductions allowable in the determination of income from house property: The

following deductions are allowable in determining the net income:
i)
Maintenance allowances: (25% of annual value in case it is used for residential

purposes, and 30% of annual value in case it is used for commercial purpose)
ii)
Insurance premium
iii)
Interest on mortgage or other capital charges
iv)
Any tax not being a charge leviable on annual basis
v)
Ground rent
Income Tax
vi) Land development tax

vii) Interest payable on capital borrowed for the purpose of acquisition, construction,
reconstruction, repair or renovation of the house property; subject to owners self
occupied portion for which interest on borrowed capital not exceeding Taka 2,000,000.
viii) Proportionate vacancy allowances
ix) Interest payable during construction period to be allowed in 3 subsequent equal
installments.
Interest or annual charge payable outside Bangladesh shall not be allowed as deduction on
which tax has not been paid or deducted at source.
27
Income Tax
23. Income from Interest on Securities [Section 22 & 23]:
Incomes classifiable under the head Interest on Securities are:
A.
Interest receivable by the assessee on any security of the government or any security
approved by the government;
B.
Interest receivable by him on debenture or other securities of money issued by or on

behalf of a local authority or company;
C.
Deductions permissible in the determination of income from interest on securities are:

i. Commission or charges deducted from interest by a bank realizing the interest on
behalf of the assessee;
ii. Interest payable on money borrowed for the purpose of investment in the securities;
iii. Interest on Debentures approved by SEC upto Taka 20,000 including exemption of
interest on Govt. Securities of Taka 5,000; [Sixth Schedule, Para # 13]
Provided that allowance or deduction on account of interest or commission in respect of
or allocable to the tax-free government securities shall not be allowed. Deduction will
also not be allowed in respect of interest payable outside Bangladesh on which tax has
not been paid or deducted.
24. Income from Business or Profession [Section 28]:
Income from business or profession includes the following:
i.
profits and gains of any business or profession;
ii.
income of trade or professional association derived on account of specific services

performed for its members;
value of any benefit or perquisite arising from business or exercise of profession;
iii.
iv.
receipt back of loss, bad debt or expenditure and unpaid trading liability as referred to
section 19 (15);
v.
income from sale of asset of depreciated asset as referred to section 19 (16);
vi.
income from receipt of insurance, salvage or compensation money as referred to

section 19 (18);
vii. income from sale of asset of capital nature as referred to section 19 (20);
viii. income from transfer of export quota as referred to section 19 (23).
25. Rates of Corporate Tax are as follows:
Irrespective of profit or loss all companies have to pay Taka 5,000 as minimum Tax.
SL.
NO.
Assessees
i.
Publicly traded Companies (other than

Banks, Insurance & Financial Institutions):
Normal Tax Rate (paying Dividend 10% or
more)
28
New Rate
AY 2009-10
Previous Rate
AY 2008-09
27.5%
27.5%
Income Tax
ii.
Assessees
New Rate
AY 2009-10
Previous Rate
AY 2008-09
Rebate @ 10% on applicable tax in case

where declared dividend is more than 20%
10%
10%
Additional Tax, if declared dividend or

bonus share rate is less than 15%
[section: 16B]
5% on
undistributed
profit
5% on
undistributed
profit
Companies declaring dividend less then 10% or

dividend not paid within the time fixed by SEC
37.5%
37.5%
Banks,
Insurance
Institutions:
and
Financial
Corporate Tax
iii.
iv.
42.5%
Excess Profit Tax (banks only): Profit in excess
15%
50% of Capital+ Reserve [section: 16C]
(on excess profit)
Companies not publicly traded
37.5%
Mobile Operator Company:
If the company is converted into publicly
traded company through at least 10%
share for Initial Public Offering (IPO)
Subject to not more than 5% of pre IPO
placement;
If not converted into a publicly traded
company with 10% share for IPO;
45%
15%
(on excess profit)
37.5%
35%
35%
45%
45%
v.
Private University: Income accrued from private

universities approved by University Grant
Commission and other universities which are not
public universities shall pay tax (other than Medical,
Dental, Engineering and Agricultural University).
15%
15%
vi.
Company engaged in Diamond cutting and

Polishing industry
15%
15%
vii.
Readymade Export oriented Garments

Industries
10%
10%
viii.
Companies which manufacture of yarn

related production of fabrics, dying,
finishing and covering of yarn
15%
15%
ix.
x.
Textile Industries
15%
15%
Jute Industries
15%
15%
xi.
Industries set up between July 2002 and

June 2005 and also not applying for tax
holiday (This rate will continue for five years)
20%
20%
SL.
NO.
29
Income Tax
SL.
NO.
Assessees
xii.
Tax on Income Accrued from Research

Institute under Trust Act.
xiii.
Payment of Dividend: Payment of Dividend

by companies formed under Company Act.
1994
or
by
foreign
companies
(FED/702/2006/5743 and Finance Ordinance
2008) to:
Non Resident Assessee: Other than

non-resident
Bangladeshi:
Company shareholders of tax treaty
country with more than 10% total
shareholdings;
Company shareholders of tax treaty
countriy holding less than 10% of
total shares of the company;
Company shareholders of non tax
treaty countries;
Remittance of Profit to/by a Foreign
Company
Person or Individual;
Resident Assessee: Including nonresident Bangladeshi:
Company Shareholders;
Individual;
xiv.
New Rate
AY 2009-10
Previous Rate
AY 2008-09
15%
15%
10 %
10 %
20%
15%
20%
15%
20%
15%
25%
25%
20%
15%
10%
10%
15%
15%
(Concessional
rate 10% has
been withdrawn)
Tax in respect of Capital Gain:

In Case of Company:
Schedule, Para # 2(a)]
[Second
Capital gain will be taxed as a block of

income separate from other income of the
assessee company at flat rate;
In Case of a person other than Company:
[Second Schedule, Para # 2(b)]
At applicable
At applicable
Where the capital gain arises as result
rate on total
rate on total
of a disposal after not more than 5
income including income including
years from the date of acquisition;
capital gain
capital gain
30
SL.
NO.
Assessees
of a disposal after 5 years from the
date of acquisition;
xv.
xvi.
xvii.
Income accrued outside Bangladesh to any

of her citizen, if such income is brought
into Bangladesh.
New Rate
AY 2009-10
Previous Rate
AY 2008-09
At the rate
applicable on
total income
including said
income
OR
@ 15% on the
capital gain
whichever is
lower
At the rate
applicable on
total income
including said
income
OR
@ 15% on the
capital gain
whichever is
lower
Nil
Nil
(SROAin/IT/2004,
dated 13.09.04
(SROAin/IT/2004,
dated 13.09.04
Nil
Income from business of software and IT
Enabled Services (ITES) including IT (6th ScheduleSupport & Software maintenance services, Part A, Para 33)
data entry, data processing, call centre,
BPO Services, etc.
Capital gain arising out of transfer of govt.
securities and stock & shares of public
companies listed with Stock Exchanges
[Section 32(7)]
Nil
(6th SchedulePart A, Para 33)
Nil
Nil
Income Tax
26. Allowable Deductions on income from Business or Profession [Section 29(1)]:

The allowable deductions which have been specifically mentioned are the following:
i.
Rent for the business premises [Para # 1(i)]
ii.
Repairs to hired business premises [Para # 1(ii)]
iii.
Bank interest paid or any profit shared with a bank run on Islamic principles in
respect of capital borrowed for the purpose of business or profession [Para # 1(iii)]
iv.
v.
Share of profit paid by a bank run on Islamic principles [Para # 1(iv)]
vi.
vii.
Repairs to own buildings, plants, machinery, furniture etc. [Para # 1(vi)
An amount not exceeding 5% of the profit transferred to Special Reserve by

financial institutions approved by the Government [Para # 1(v)]
Insurance premium for insurance against risk of damage etc. of buildings plant etc.
used in business or profession [Para # 1(vii)]
31
Income Tax
viii.
Depreciation of building, machinery, plant or furniture being owned by the

assessee and used for business or profession; the allowances are admissible
under Third Schedule [Para # 1(viii)]
ix.
Investment allowance for a passenger vessel or a fishing trawler, which is entitled

to special depreciation is allowable at 20% of the original cost subject to stipulated
conditions (Third Schedule, Para # 8) [Para # 1(ix)]
x.
Obsolescence allowance for building, machinery or plant, which has been

discarded, demolished or destroyed, under the stated circumstances and to the
prescribed extent (Third Schedule, Para # 10) [Para # 1(xi)]
xi.
Obsolescence allowance and allowance on account of death or useless animals;

[Para # 1(xii)]
xii.
Land development tax or rent, local rate, etc. [Para # 1(xiii)]
xiii.
Bonus paid to employees including festival bonus [Para # 1(xiv)]
xiv.
The amount of bad debt, which is established to have become irrecoverable, under
the stated circumstances [Para # 1(xv)]
xv.
The amount of bad debt written off as irrecoverable but deduction not allowed on
the ground that it was not then irrecoverable, the amount which was established to
be irrecoverable [Para # 1(xvi)]
xvi.
The amount for bad debt having been irrecoverable in an earlier year, is allowable
for the earlier year under the stated circumstances and with the consent of the
assessee [Para # 1(xvii)]
xvii.
Provision for bad and doubtful debt and interest thereon made by a commercial
bank including the Bangladesh Krishi Bank, Rajshahi Krishi Unnayan Bank and
Karmosangsthan Bank for a sum equal to 1% of the outstanding loan including
interest thereon or the amount of actual provision, whichever is less, subject to the
specified conditions, allowable during the assessment years 2001-2002,20022003,2003-2004 and 2004-2005, 2005-06 and 2006-07;
If any amount out of the provision for bad and doubtful debt and interest thereon,
which has been allowed, is ultimately recovered, the amount so recovered shall be
deemed to be profit of the year in which it is recovered [Para # 1(xviiiaa)]
32
xviii.
Any expenditure, not being capital expenditure, laid out or expected on scientific
research related to the business [Para # 1(xix)]
xix.
Any expenditure of a capital nature laid out or expended on scientific research

related to the business subject to the stipulated conditions [Para # 1(xx)]
xx.
Any sum paid to scientific research institute etc. subject to the stipulated conditions
[Para # 1(xxi)]
xxi.
Any sum, not being of capital nature laid out or expended on any educational
institute or hospital established for the benefit of employees subject to the
stipulated condition [Para # 1(xxii)]
Handholding of Payroll
functions
Salary Surveys / Pay
Restructuring
Headhunting/HR Outsourcing/
Recruitment and work Permit
for Expatriates
Ou
rV
alu
eA
dde
d Se
r vices
Employees' Provident Fund &

Gratuity Fund Accounting functions
Employees and Corporate taxation
matters and US Citizens tax return filing
Handholding of Accounting functions
Transaction / Payment Processing
Design and development of Financial systems
and Manuals
IT Audit / Compliance Audit
Business Advisory Services on Corporate Tax,
Accounting and related matters
Due Diligence Review, Financial Modeling,
Financial Reviews and Marger/Acquisition
Implementation of Fixed Asset Management System
Design and Implementation of Software like TaxTool, HR/
Administration, Paypack, Asset, and Benipack
Imparting Training on basic Accounting and Computer systems

Handholding of Company Secretarial Functions and formation of Company, Branch
and Liaison Office
Income Tax
xxii.
Expenditure (including capital expenditure) incurred on any educational institution or

hospital established for benefit of employees and their dependents is deductible
provided no charge is made for the services rendered by such hospital or institution.
Expenditure incurred on the construction, maintenance or running of any institute for
the training of industrial workers will be similarly deductible [Para # 1(xxiii)]
xxiii.
Any expenditure laid out or expended on the training of citizens of Bangladesh in

connection with a scheme approved by the National Board of Revenue [Para # 1(xxiv)]
xxiv.
Expenses incurred in connection with visits abroad in a Trade Delegation

sponsored by Government [Para # 1(xxv)]
xxv.
Subscription paid to a registered trade organization or to a recognized professional

institution is allowable expenditure for the purpose of computation of income from
business [Para # 1(xxvi)]
xxvi.
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 [Para # 1(xxvii)]
xxvii.
Allowance in respect of expenditure on publicity and advertisement [Section 30,

Para # f(iii)]
xxviii.
Any allowance in respect of expenditure on entertainment not in excess of the

amount prescribed in this behalf, Ceiling of admissible expenditure has been
prescribed in Rule 65 of Income Tax Rules, 1984 [Section 30, Para # f(i)]
On the first Taka 1,000,000 of income from business or profession: 4%
On the balance income
xxix.
: 2%
Foreign travel expenses for holidaying and recreation incurred by business houses on
account of their employees and their dependants not exceeding the amount prescribed in
this behalf under Rules 65A of the Income Tax Rules, 1984 [Section 30, Para # f(ii)]
The amount has been restricted upto 3 months basic salary or three-fourth of the
actual expenditure whichever is less, not oftener than once in every 2 years;
subject to sum exceeding taka 10,000 shall not be allowed as deduction unless
such payment is made through bank.
xxx
Allowable expenditure on distribution of Free-Sample {(Rule: 65C), (Section 30,

Para # f(iv)}
In respect of industry other than pharmaceutical industry:
Turnover upto Taka 5 crore
: 1.50%
Turnover exceeding Taka 5 crore but not exceeding Taka 10 crore : 0.75%
Turnover exceeding Taka 10 crore
: 0.375%
In respect of pharmaceutical industry:
Turnover upto Taka 5 crore
: 2.0%
Turnover exceeding Taka 5 crore but not exceeding Taka 10 crore : 1.0%
Turnover exceeding Taka 10 crore
: 0.50%
34
Income Tax
xxx
Head Office Expenses for a Company not incorporated in Bangladesh, allowable

upto 10% the Profit (Section 30g)
Technical Assistance Fee / Royalty allowable upto 5% of the profit (Section 30h)
Incentive Bonus allowable upto 10% of the disclosed net profit (Section 30j)
27. Normal Depreciation Allowance (Third Schedule, Para # 3): [section: 29(1) (viii) & (ix)]
i.
ii.
iii.
Rate/percentage of Remarks
the written down
value except as
otherwise indicated
a) Building (general)
10%
b) Factory building
20%
Furniture and fittings
10%
Machinery and plant:

a) General rate
20%
b) Special ratesShips1) Ocean-going ships (new)
12%
The allowance is to
be calculated on
the original cost
2) Ocean-going ships (Second

hand) age at the time of purchase
Less than 10 years
10 years or more
12%
24%
3) Inland ships including steamers,

motor vessels, iron or steel flats
for cargo, wooden cargo boats,
motor launches and speed boats.
24%
1) Batteries, X-Ray and electrictherapeutic apparatus and

accessories thereto.
20%
2) Machinery used in the production

and exhibition of cinematographic
films
20%
3) Motor vehicles, not plying for hire
20%
4) Motor vehicles plying for hire
24%
5) Computer & Computer Equipments

6) Bangladeshi made computer software
30%
50%
1) Professional and reference books
30%
SL. Class of Assets

NO.
35
Income Tax
SL. Class of Assets
NO.
Rate/percentage of Remarks
the written down
value except as
otherwise indicated
2) Aircraft, aero-engines and aerial

photographic apparatus
30%
3) Moulds used in the manufacture

of glass or plastic goods or
concrete pipe.
30%
Mineral oil concerns

1) Below ground installations
30%
2) Above ground installations, that

is to say, portable boilers, drilling
tools, well-head tanks and rigs.
30%
In case of motor vehicles, being passenger vehicles or sedan cars, not plying for hire cost for
the purpose of depreciation is restricted to Taka 2,000,000.
28
Initial depreciation: [Third Schedule, Para # 5A]

Where any building has been newly constructed or any machinery or plant has been in
Bangladesh after 30th June 2002, an amount by way of initial depreciation allowance in
respect of the year of construction or installation or the year in which such building,
machinery or plant is used by the assessee for the first time for the purpose of his business or
profession or the year in which commercial production is commenced, whichever is later,
shall be allowed at the following rates:
In the case of building - 10% of the cost;
In the case of machinery or plant other than ships or motor vehicles not plying for hire 25% of the cost;
29. Accelerated Depreciation: [Third Schedule, Para # 7 & 7A]

In the case of any machinery or plant (other than office appliance and road transport vehicles)
which not having been previously used in Bangladesh, has been or is used in an industrial
undertaking set up in Bangladesh between the first day of July, 1977 and the thirtieth day of
June 2010 (both days inclusive) accelerated depreciation allowance shall be allowed and
computed as follows:
For the first year in which the undertaking 50% of the actual cost of plant and machinery
to the assessee
starts commercial production
30% of the actual cost of plant and machinery
For the next following second year
to the assessee
For the next following third year
36
20% of the actual cost of plant and machinery to

the assessee
Income Tax
The assets enjoying accelerated depreciation will not be eligible for any other depreciation
under the Income Tax Ordinance.
Accelerated depreciation is also allowable on machinery and plant other than office
appliances and road transport vehicles which having not being previously used in
Bangladesh, has been or is used in the expansion unit of any existing undertaking or in
the treatment and disposal of toxic and environmentally hazardous wastes or in the
collection or processing of biodegradable waste or in the research and development in
any industrial undertaking owned by a company. In this case accelerated depreciation is
allowed at 80% for 1st year (starts commercial production or operation) and 20% for the
next following year [Para # 7A (1)].
30. Deductions are NOT admissible in certain circumstances: [Section 30]
The following expenditures are not admissible deductions in the determination on income
from business or profession:
i.
Payment of salaries if tax is not deducted at the time of payment and paid thereon in
accordance with section 50 [Para # 30(a)]
ii. Any payment made by an assessee to any person if tax thereon has not been deducted
and credited in accordance with Chapter VII and VAT thereon has not been collected or
deducted and credited in accordance with VAT Act. 1991 [Para # 30(aa)]
iii. Payment of interest, salary, commission or remuneration 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 [Para # 30(b)]
iv.
Brokerage or commission paid to a non-resident if tax has not been deducted there
from under section 56 [Para # 30(c)]
v.
Payment to a provident or other fund unless effective arrangement has been made for
deduction of tax at source while making the payments from the fund which are taxable
under the head Salaries [Para # 30(d)]
vi.
Amount of perquisites or other benefits paid, as defined under Section 2(45), to any
employee in excess of Taka 200,000 [Para # 30(e)]
The undertaking must fulfill all the prescribed conditions and apply to Board in the prescribed
manner for approval for the purpose of deprecation of this category within six months from
the end of the month of commencement of commercial production. Board is to give decision
on the application within 45 days [Section 46A (3) or 46B (6)].
Provided that this ceiling shall not be applicable to an employer where perquisites
were paid to an employee in pursuance of any government decision to implement the
recommendation of a Wage Board constituted by the government;
vii. The amount of expenditure in excess of the prescribed rates and as is not, in the
case of sales and services liable to excise duty, supported by excise stamp or seal in
respect of the following items [Para # 30(f)]
37
Income Tax
Entertainment (Rule # 65)
Foreign travels of employees and their dependants for holidaying and recreation
(Rule # 65A)
Distribution of free samples (Rule # 65C)
viii. Any expenditure exceeding 10% of the profit under the head office expenses by a
company not incorporated in Bangladesh under Companies Act 1994 [Para # 30(g)]
ix.
Any payment by way of royalty, technical services fee, technical know how fee or
technical assistance fee exceeding 8% of the profit [Para # 30(h)]
x.
Any payment by way of salary or remuneration made otherwise than by crossed

cheque or bank transfer by a person to any employee having gross monthly salary of
Taka 15,000 or more [Para # 30(i)]
xi.
Any expenditure by way of incentive bonus exceeding 10% of the disclosed net profit
[Para # 30(j)]
xii. Any expenditure by way of overseas traveling exceeding 1% of the disclosed

turnover [Para # 30(k)]
31. Capital Gains: [Section 31]
Any gains arising from transfer of a capital asset (both movable and immovable) as defined in
Section 2(15) of the Income Tax Ordinance is chargeable to income tax in accordance with
the Second Schedule, Para # 2 of the Income Tax Ordinance, 1984 which prescribes rates
of income tax in certain special cases;
In determination of the gain on transfer of any expenditure incurred solely in connection with
transfer of the capital asset and the cost of acquisition including expenditure, if any, incurred
for the improvement of asset are deductible from the sale value. In case of acquisition of
asset:
i.
ii.
38
Events
Value of cost capital assets
By purchase the actual cost of

the asset;
Actual cost of the previous owner as reduced

by depreciation allowance;
Property acquired by gift,

bequest or will or under a
transfer on a trust or distribution
of capital asset on liquidation of
company or dissolution of a firm
or association of persons;
Where actual cost of the previous owner as

reduced by depreciation allowance. Where
actual cost to the previous owner can not be
ascertained, fair market value of assets on the
date on which it became the property of
previous owner, shall be taken to be the cost
of acquisition in the hand of present owner;
Income Tax
32. Exemption of Capital Gains from tax: [Section 32]
Capital gains or portion thereof arising out of transfer of certain capital assets are exempted
from the income tax under certain circumstances and upon fulfillment of certain conditions.
Following are the cases of full or partial exemptions:
i. Transfer of capital asset used in the business with following rules: [Section 32(5)]
A declaration shall have to be made before the assessment is made;
A new capital asset for the purpose of business or profession has to be purchased
within 1 year before or after the date of transfer;
When capital gain is equal or less than the cost of new asset, no tax shall be
charged on the capital gain;
ii. Capital gain arising out of transfer of Government Securities and Stocks &
Shares of public companies listed with a stock exchange in Bangladesh is exempted
from tax [Section 32(7)]
iii. Transfer of Buildings and Lands to a new company for setting up an industry and
the whole amount of capital gain arising out of such transfer is invested in the equity of
the said company, the capital gain shall not be charged to tax as income of the year of
transfer [Section 32(10)]
iv. Transfer of Capital Asset of a firm to a new company: Capital gain arising from
transfer of capital asset of a firm to a new company registered under companies Act
1994 and the whole amount of capital gain is invested in the equity of the said company
by the partners of the firm, then the capital gain shall not be charged to tax as income
of the year of transfer [Section 32(11)]
v. Transfer of Stocks and Shares of a public company by a non-resident: Capital
gain arising in the hand of a non-resident from transfer of stocks or shares of a listed
company is exempted from tax provided such assessee is entitled to similar exemption
in the country in which he is a resident [Section 31]
When capital gain is greater than the cost of new asset, capital gain upto the extent of
cost of acquisition of new asset shall be exempted and balance shall be charged to tax;
33. Capital Gain Tax: [Second Schedule]

Assessee
New Rate
AY 2009-10
Previous Rate
AY 2008-09
15%
15%
Tax in respect of Capital Gain:

In Case of Company: [Second
Schedule, Para # 2(a)]
Capital gain will be taxed as a block of
income separate from other income of the
assessee company at flat rate
39
Income Tax
Assessee
New Rate
AY 2009-10
Previous Rate
AY 2008-09
In Case of a person other than Company: Applicable rate on

Applicable rate on
[Second Schedule, Para # 2(b)]
total income including total income including
capital gain
capital gain
of a disposal after not more than 5
Tax payable at the
Tax payable at the
years from the date of acquisition
rate applicable on
rate applicable on
Where the capital gain arises as total income including total income including
result of a disposal after 5 years
said income OR
said income OR
from the date of acquisition;
@ 15% on the capital
@ 15% on the capital
gain whichever is lower
gain whichever is lower
34. Income from Other Sources: [Section 33]

Following income of an assessee is assessable under the Income from Other Sources:
a.
b.
c.
d.
e.
f.
Dividend;
Interest;
Royalties and Technical Services;
Income from letting of machinery, plant, furniture, building etc;
Deemed Income [Section 19 (1, 2, 3, 4, 5, 7, 8, 9, 10, 11, 12, 13, 21 & 24)]
Income of any kind which is not classifiable under any other heads specified in Section 20
35. Set-Off of Losses: [Section 37]

Whenever an assessee sustains a loss in any year under any of the following heads of income,
such as, property, interest on securities, business or profession, agricultural income and other
sources, he is entitled to set-off the loss so sustained against his income, profits or gains under any
other head in that year. Any speculative transactions undertaken by an assessee should be treated
as a distinct and separate business and any loss incurred in those transactions should be set-off
only against the income, profits or gains of that business. Loss on Capital Gains can not be set-off
against income from any other head. Such loss can be set-off only against the Capital Gains. Any
loss from Business or Profession shall not be set off against income from House Property in the
year such loss crop up.
36. Carry forward of loss: [Section 38]
Whenever an assessee sustains any loss under the head Business or Profession not being
loss from speculation business and the loss cannot wholly be set-off against income under
any other head i.e. salary, property, agricultural income, interest on securities and income
from other sources, such unadjusted loss shall be carried forward to the following year to be
set-off against the profits and gains of the same business or profession. The only exception in
this regard is that the loss sustained in speculative business shall be carried forward to be
set-off only against speculative profits, if any, of the following year. Loss cannot be carried
forward for more than six successive assessment years.
40
Income Tax
37. Carry forward of Depreciation Allowance: [Section 42(6)]
Depreciation allowance which cannot be given full effect of, in any year, because of there
being no profits or of inadequate profits, unadjusted allowances or portion thereof as the case
may be, shall be carried forward to the next year or so on for succeeding years and be part of
allowance for that year.
While setting-off loss on account of depreciation allowance, effect shall first be given to
business loss (Section 38) including loss from speculation business (Section 39).
38. Withholding Tax / Tax Deducted at Source (TDS): [Section 50, 51, 52, 53, 54, 55, 56 &
62A, Eight Schedule]
All taxes deducted or collected in accordance with the section 48 to 74, shall be paid to
the credit of govt. within 3 weeks from the date of such deduction or collection [Rule:13]
Supply of goods or execution of contracts (u/s-52)

Professional or technical service tee (u/s-52A)
House property (u/s-53A)
Commission or fees (u/s-53E)
For the above four cases, cheque equivalent to deducted amount needs to be issued in
favor of concerned DCT and send to the person [u/s-2(46)] from whom tax has
been deducted subject to production of counter foil of treasury challan. Provided that if the
person is not resident in Bangladesh, exception will not be applicable.
SL. Section
No. / Rule #
Particulars
Salaries and benefits:

On first Taka 165,000 (Male Assessee);
On first Taka 180,000 (Female Assessee);
On first Taka 180,000 (Assessee aged 65 & more);
On first Taka 200,000 (Disabled Assessee);
On next Taka 275,000;
On the rest of the balance;
50
50A
Discount of the real value of Bangladesh Bank bills;

3 Individual;
3 Company;
51
Interest on securities excluding treasury bond or

treasury bill issued by the government;
Rate of
deduction (%)
And all taxes deducted or collected shall be deposited to Bangladesh Bank or Sonali
Bank, except deduction from [Rule:14] -
Nil
Nil
Nil
Nil
10
15
20
25
27.5 or 37.5 or 42.5
or 45 whichever is
applicable
10
41
Income Tax
SL.
No.
4
Section
/ Rule #
52 &
Rule16
Particulars
In case of Supply of goods or execution of
contracts / subcontracts:
Where the cumulative

exceed Taka 100,000;
42
Rate of
deduction (%)
payment does not

Nil
Where the cumulative payment exceeds Taka

100,000 but does not exceed Taka 500,000;

500,000 but does not exceed Taka 1,500,000;
2.5

1,500,000 but does not exceed Taka 2,500,000;
3.5

2,500,000;
In the case of supplied by oil marketing

company:
Where the payment does not exceed Taka
200,000;
Where the payment exceeds Taka 200,000;
Nil
0.75
52(1) &
Rule 17
Indenting Commission;
3.5
52A(1)
Shipping Agency Commission;

Fees for services rendered by Doctors, Accountants,
Engineers & Consultants;
5
10
52A(2)
Royalty or Technical Know How Fee;
10
52A(3)
Professional or Technical Services;
10
52AA
Payments on certain services like stevedoring

agency, private security service agency; Subject to
Private Security Service TDS @ 1.125% (tax @
7.5% of 15% profit) on bill amount;
7.5
10 52AAA
Commissioner shall collect for commission

receivable by clearing and forwarding agents;
7.5
11 52B
Collection of tax from Cigarette Manufacturers;
12 52C
Compensation against Acquisition of Property;
13 52D
Interest on savings instruments;
Income Tax
Section
/ Rule #
Particulars
(Rate shall be applicable for savings certificate
purchased on 1st January, 2004 or thereafter whose
interest/profit accrued on 1st January, 2007 or
thereafter);
14 52F
Collection of the from brick manufacturers (at the

time of permission for manufacture of bricks):
for one section brick field;
for one and half section brick field;
for two section brick field;
Rate of
deduction (%)
10
Tk. 10,000
Tk. 12,000
Tk. 18,000
15 52 I
Commission of Letters of Credit;
16 52K
Collection of tax by City Corporation at the time of

Renewal of Trade License;
17 52L
Collection of tax on account of Trustee Fee;
10
18 52M
Collection of from freight forward agency commission;
7.5
19. 52N
Rental Power Company
20 52O
Collection of tax for making payments or giving credit to

a foreign technician serving in a diamond cutting
industry
21 53 & Rule
17A
Collection of tax from Importers and Exporters. The

Board shall specify from whom collection to be made;
22 53A & Rule

17B
Payment of rent to Landlord:
Monthly rent upto Taka 20,000;
Monthly rent from Taka 20,001 to Taka 40,000;
Monthly rent exceeds Taka 40,000;
23
53AA
24
10
25
26
53B &
Rule 17C
53BB
53BBB
Collection of tax from shipping business of a resident;

and 3% of freight received or receivable between two
or more foreign countries
Export of Manpower (Service charges);
Collection of tax from export of knitwear and woven garments;
Collection of tax from Member of stock exchanges;
0.25
0.025
27
53BBBB
Collection of tax from export of any goods except

knitwear and woven garments;
0.25
28
53C &
Rule 17D
Collection of tax on sale price of goods or property

sold by public auction;
5
Tk. 500 per
trade license
Nil
3
5
SL.
No.
43
Income Tax
SL.
No.
Section
/ Rule #
Particulars
Rate of
deduction (%)
29
53CC
Deduction or collection of tax at source from courier

business of a non resident;
7.5
30
53D &
Rule 17E
Payment to actors and actress; Subject to such

payment exceeds taka 36,000 in the aggregate in
any income year;
31
53E
Commission, discount or fees on account of

marketing or distribution of goods;
7.5
32
53EE
Commission or remuneration paid to agent or

representative of a foreign buyer as per terms of L/C
or under any other instructions;
33
53F
Interest on Savings and Fixed Deposits or any term

deposit maintained with schedule bank including a
corporation, bank or by way of profit on term
deposits, financial institutions, leasing company or
housing company;
10
34
53FF
Rule 17I
Collection of tax from persons engaged in real

estate or land development business:
Tk 250 per
sq. meter
3 in case of building or apartment;

3 in case of land:
u
Situated in city Corporation pourashava

or cantonment, board and 5% to be
effective upto 31 August 2009.
2% of deed
value
Situated outside of above 3 jurisdictions

and 5% to be effective upto 31 Aug.2009.
1% of deed
value
35 53G
Payment of insurance commission;
36 53GG
Payment of fees / remuneration to surveyor of

General Insurance Company;
37 53H
Collection of tax on transfer, etc. of property;
38 53 I
Interest on deposit of Post Office Savings Bank

Account, deductible only when total interest
exceeds Tk. 150,000 and TDS applicable only on
the interest in excess of Tk. 150,000
10
39 53J & Rule

17BB
Payment of rental value of vacant land or plant or

machinery:
3 Monthly rent upto Taka 15,000;
44
7.5
Nil
Income Tax
Section
/ Rule #
Particulars
Rate of
deduction (%)
Monthly rent from Taka 15,001 to Taka 30,000;

Monthly rent exceeds Taka 30,000;
40 53K
Advertising bill of newspaper or magazine or private

television channel;
41 54
Deduction from Dividends:

Company beneficiary for non-tax treaty
countries;
Company beneficiary for tax treaty countries;

Company beneficiary for tax treaty countries
3
5
3
20
10
having less than 10% shareholding
20
Resident Company with more than 10%

shareholding;
20
Individual: Resident
10
42 55 &
Rule 17I
Income from lottery, etc.
43 56
Deduction from Income of non-residents:
Applicable rate or
20% whichever is
lower
Company;
Rate applicable
to company i.e.
37.5%
Person other company & non resident Bangladeshi;

Non resident Bangladeshi;
25
SL.
No.
At applicable
Rate for resident
individual
39. Procedure of deduction or collection of tax at source

[Section:62A,Eight Schedule]
Tax deduction or collection at source, procedures and specified rates are described
and if any discrepancy arise, Eight sehedule shall prevail as:SL.
No.
1
Head of
withholding
Salaries
[section-50]
Withholding
authority
Any person
responsible for
making such
payment.
Withholding rate
/rates of tax
Limitation
Average of the rates

applicable to the
estimated total
income of the payee
under this head.
45
Income Tax
SL.
No.
Head of
withholding
Discount on the
real value of
Bangladesh Bank
bills.
[section-50A]
Any person
responsible for
making such
payment .
Maximum rate.
Interest on
securities
[section-51]
Any person
responsible for
issuing any
security.
10%
Payment to
contractors and
sub-contractors
[Section-52]
[Rule-16]
Any person
responsible for
making such
payment.
Withholding
authority
Withholding rate
/rates of tax
Limitation
This shall not apply

to the Treasury
bond or Treasury
bill issued by the
Government or to
any payment on
account of interest
payable on
debentures issued
by or on behalf of a
local authority or
company.
- Upto Tk. 100,000-Nil.

- From Tk. 100,001 to
Tk 500,000 - @1%
- From Tk. 500,001 to
Tk.1,500,000 - @
2.5%
- From Tk.1,500,001
to Tk. 2,500,000 @3.5%
- where the payment
exceeds Tk.
2,500,000 - @4%
Tax at source will

not be withheld
for items
prescribed in rule
17A.
In case of oil
supplied by oil
marketing companies
upto Tk. 200,000-Nil,
where the payment
exceeds Tk. 200,000 0.75%
5
46
Payment on
indenting
commission or
shipping agency
commission.
[Section -52,
Rule-17]
Any person
responsible for
making such
payment .
On indenting
commission-@3.5%
On shipping
agency
commission-@5%.
Income Tax
Head of
withholding
Withholding
authority
Withholding rate
/rates of tax
Fees for Doctors

[section-52A(1)]
The principal
officer of a
company or the
chief executive of
any NGO or trust
responsible for
making such
payment .
10%
Royalty or
technical know how fee
[section-52A(2)
The government
or any other
authority,
corporation or
body or any
company or any
banking company
or any insurance
company or any
co-opera tive bank
or any NGO
responsible for
making such
payment.
10%
Fees for
professional or
technical services
[section -52A(3)]
Do
10 %
Payment of
certain services
like stevedoring
agency , private
security service
[section -52AA]
The government or
any other authority
,corporation or
body or any
company or any
banking company
or any insurance
company or any
co-operative bank
or any NGO
responsible for
paying any
commission to a
stevedoring agency
or making any
payment to a
private security
service .
7.5%
Limitation
Person certified by
NBR having non
assessable income
or person having
income exempted
from tax.
SL.
No.
47
Income Tax
SL.
No.
Head of
withholding
Withholding
authority
10 Clearing and
Commissioner of
forwarding agents customs
[section-52AAA]
48
Withholding rate
/rates of tax
7.5%
11 Cigarettes
manufacturing
[section-52B]
Any person
responsible for
selling banderols
to any
manufacturer of
cigarettes.
6% of the value
of the banderols
12 Compensation
against
acquisition of
property
[section-52C]
Any person
responsible for
payment of such
compensation.
2% of the amount
of such
compensation .
13 Interest on saving Any person

instruments
responsible for
making such
[section-52D]
payment .
Limitation
10%
- No deduction to be
made if the total
amount of interest
does not exceed
Tk.150,000/- during
the income year.
- Such deductions
shall not be
considered as final
discharge of tax
liability.
- A rate of 5% shall
apply on interest
of any amount of
the saving
instrument
purchased before
January 1, 2004.
- No deduction to be
made if the saving
instrument is
purchased by any
approved
superannuation /
pension / gratuity
fund or any
recognized
provident fund or
any workers profit
participation fund.
Income Tax
Head of
withholding
Withholding
authority
Withholding rate
/rates of tax
14 Brick
Manufacturer
[section-52F]
Any person
responsible for
issuing any
permission or
renewal of
permission for
manufacture of
bricks.
15 Commission of
letter of credit
[section -521]
Any person
responsible for
opening letter of
credit .
5%
16 Renewal of trade
license by city
corporation or
paurashava
[section-52K]
City Corporation or
Paurashava.
Tk. 500/- for each

trade license.
17 Trustee fees
[section -52L]
Any person
responsible for
making such
payment .
10%
18 Freight forward
agency
commission
[section-52M]
Any person
responsible for
making such
payment .
7.5%
19 Rental Power
Company
[section -52N]
Bangladesh Power
Development
Board during
payment to any
power generation
company against
power purchase
within three years
from its
commencement.
20 Foreign technician Employer.

serving in diamond
cutting industries
[section-52O]
Limitation
Tk. 10,000/- for

one section brick
field ,Tk. 12,000/for one and half
section brick field
Tk.18,000/- for two
section brick field .
SL.
No.
4%
5%
This rate is for 3

years from the
appointment of such
foreign technician
and appointment to
be completed by 30
June 2010
49
Income Tax
SL.
No.
Head of
withholding
Withholding
authority
21 Importer
[section-53 and
rule 17A]
The commissioner
of customs
22 House property
[section-53A and
rule 17B]
The Government or
any authority,
corporation or body
or any company or
any banking
company or any cooperative bank or
any NGO run or
supported by any
foreign donation or
any university or
medical college or
dental college or
engineering college
as tenant
Up to Taka 20,000
per month [p.m]-Nil
23 Shipping business
of a resident
[section -53AA]
Commissioner of
Customs or any
other authority duly
authorised
5% of total freight
received or
receivable in or out
of Bangladesh
24 Export of
manpower
[section -53B and
rule 17C]
The Director
General, Bureau of
Manpower,
Employment and
Training
25 Export of Knitwear Bank

and woven
garments, terry
towel, jute goods,
frozen food
vegetables, leather
goods, packed
food [section 53BB]
50
Withholding rate
/rates of tax
Limitation
3%
This does not apply

if the owner of
house property is
From Taka 20,000 to given a certificate
Taka 40,000 p.m.-3% by the DCT
regarding not
having any
More than Taka
assessable income
40,000 p.m.-5%
during the year or is
having income
otherwise exempted
from payment of
income tax.
3% of total freight
received or
receivable from
services rendered
beween two or more
foreign countries.
10%
0.25% of the total

export proceeds.
No deduction or
deduction at a
reduced rate to be
made if an exporter
produces certificate
from NBR regarding
having fully or partly
exempted income.
Income Tax
Head of
withholding
26 Member of Stock
Exchanges
[section-53BBB]
Withholding
authority
Withholding rate
/rates of tax
The chief Executive

Officer of stock
exchange
0.025%
27 Export or any
Bank
goods except
knitwear and
woven garments.
terry towel, jute
goods, frozen food
vegetables, leather
goods, packed
food
[section-53BBBB]
0.25% of the total

export proceeds.
28 Goods or property
sold by public
auction
[section-53C and
rule 17D]
Any person making

sale.
5% of sale price
29 Courier business
of a non-resident
[section-53CC]
Any person being a 7.5% on the amount

company working
of service charge
as local agent of a
accrued.
non-resident courier
company
30 Payment to actors
and actresses
[section-53D and
rule 17E]
The person
producing the film
5%
31 Commission,
discount or fees
[section-53E]
Any person being a

corporation,
body including a
company making
such payment.
7.5%
Limitation
No deduction or
deduction at a
reduced rate to be
made if an exporter
produces certificate
from NBR regarding
having fully or partly
exempted income.
SL.
No.
Payment needs to
exceed thirty six
thousand taka in
the aggregate in
any income year.
51
Income Tax
SL.
No.
Head of
withholding
Withholding
authority
Withholding rate
/rates of tax
32 Commission or
remuneration paid
to agent of foreign
buyer [section 53EE]
Bank
4%
33 Interest on saving
deposits end fixed
deposits
[section -53F]
Any person
responsible for
making such
payment
10%
34 Real estate or land

development
business
[section -53FF]
Any person
responsible for
registering any
document for
transfer or any
land or building
or apartment.
Tk. 250 per square

meter for building
or apartment.
5% of the deed
value for upto
August 31, 2009
and 2% of deed
value from
September 01, 2009
in case of property
situated in any
city corporation,
paurashava or
cantonment board.
Limitation

on the amount of
interest of shares of
profit arising out of
any deposit pension
scheme sponsored
by the government
or by a schedule
bank with prior
approval of the
Government
1% of deed value
from 01September,
2009 in case
property situated
in places other
than any city
corporation,
paurashava or
cantonment board.
52
Income Tax
Head of
withholding
Withholding
authority
35 Insurance
commission
[section-53G]
Any person
responsible
for paying
such
commission
to a resident.
36 Fees of surveyors
of general
insurance
company
[section-53GG]
Any person
responsible foraying
such fees to a
resident.
37 Transfer of
property
[section-53H]
Any person
responsible for
registering any
document of a
person.
Withholding rate
/rates of tax
3%
7.5%
5% of deed value
upto 31 August 2009
and 2% of deed
value from 1st
September 2009 in
case of property
situated
in any city
corporation,
paurashava or
cantonment board
1% of deed value
from 1st
September 2009
in case of
property situated
in areas other
than any city
corporation,
paurashava or
cantonment
board.
Limitation

to sale by a bank or
a financial
institution as a
mortgagee
empowered to sell;
mortgagee of any
property to the
BHBFC; mortgagee
to any bank of any
property; transfer of
any agricultural land
in Bangladesh
except land situated
in any area
mentioned in
paragraph [i] or [ii],
of sub- clause [c] or
clause [ 15] of
section 2; transfer
of any non
agricultural
land valued at a
sum not exceeding
one lakh taka
situated outside the
jurisdiction of any
city corporation
paurashava or
cantonment board
SL.
No.
53
Income Tax
SL.
No.
54
Head of
withholding
Withholding
authority
38 Interest on
deposit of post
office savings
bank account
[section -53I]
Any person
responsible for
making such
payment.
39 Rental value of
vacant land or
plant or
machinery
[section -53J]
[rule 17BB]
The
Government or
any authority,
corporation or
body including
its units, or any
NGO, any
university or
medical college
dental college,
engineering
college
responsible for
making such
payment.
40 Advertisement of
newspaper or
magazine or
private television
channel
[section -53K]
The Government or
any other authority,
corporation or body
or any company or
any banking
company or any
insurance company
or any cooperative
bank or any NGO or
any university
medical college or
dental college or
engineering college
responsible for
making such
payment
Withholding rate
/rates of tax
10%
Limitation
This shall not
apply if the total
amount of
interest does not
exceed Tk.
1,50,000/- and
to such payee or
class of payees
as specfied by
the Board.
- Up Tk. 15,000/per month - Nil.

- From Tk.15,001/to Tk. 30,000/- per
month-3%.
- More than Tk.
30,000-per month5%.
3%
Income Tax
Head of
withholding
41 Dividends
[section-54]
Withholding
authority
The
principal
officer of a
company.
Withholding rate
/rates of tax
Limitation
- Resident/nonresident
Bangladeshi
company 20%.
If the DCT
certifies,
deduction in
this regard may
not be made or
- Resident/nonmade at a rate
resident Bangladeshi less than the
person other than
maximum rate.
company 10%.
- Non-resident (other
than Bangladeshi
non-resident) person
other than a
company 25%.
42 Income from
Lottery
[section-55]
Any person
responsible for
making such
payment.
43 Income of non
residents
[section-56]
Any person
responsible
for making such
payment.
20%
- Non-resident
company at the rate
applicable to a
company.
- Non-resident nonBangladeshi person
other than a
company 25%.
- Non-resident
Bangladeshi person
at the rate
applicable to a
resident.
SL.
No.
40. Tax Holiday for newly established industrial undertaking, Tourist Industry and
Physical Infrastructure facility set-up between the period of July, 2008 to June,
2011 etc. in certain cases: [Section 46B]
A.
Condition for Tax Holiday:
Period of tax holiday has been further extended for 3 years beyond 30th June, 2008 in
respect of industrial undertaking, tourist industry and physical infrastructure facility
subject to following conditions:
55
Income Tax
i.
ii.
The undertaking is set up in Bangladesh between 1st July, 2008 and 30th June 2011;
The undertaking is managed either by (i) a body corporate established by or under an
act of Parliament having head office in Bangladesh or (ii) a company defined under
companies Act 1913 or 1994 having subscribed & paid up capital of not less than Taka
1,000,000 on the date of commencement of commercial production;
iii.
The undertaking is engaged in: [Section 46(B), Para # 2]
iv.
The Industrial Undertaking in the production of textile, jute, high value garments
(overcoats, jackets & suits), pharmaceuticals, melamine, plastic, ceramics, sanitary,
steel, fertilizer, computer and agriculture machinery etc;
Providing on commercial basis, physical infrastructure facilities;
Tourist industry as defined in the explanation to Section 46;
30% of the tax exempted income to be invested in the same undertaking or for a new
industry during the period of exemption or within one year of expiring tax holiday period.
An additional 10% profit has to be invested each year within 3 months of closing the
income year by purchasing shares of listed companies in Bangladesh;
Provided that the purchase of shares of a listed company except ready made
garments industry and if 40% of income re-invested between 01 July 2008 and
30 June 2011 in the said or new industrial undertaking during the period or
within one year from end of the period.
v.
The undertaking is not formed by splitting up or by reconstruction or reconstitution of an

existing business or by transfer to a new business of any machinery or plant used in
Bangladesh at any time before commencement of the new business;
vi.
An application shall be filed with the Board for approval of the undertaking within 6
months from the end of the month of commencement of commercial production or
operation, and the undertaking must be approved by the Board;
B.
Period of Exemption: [Section 46(B), Para # 1]

If the said undertaking is set-up in Dhaka and Chittagong divisions, excluding the hill
districts of Rangamati, Bandarban, and Khagrachari; for a period of 5 years beginning
with the month of commencement of commercial production or operation;
Period of Exemption
Rate of Exemption
For the first two years (1st and 2nd year);
100% of Income
For the next two years (3rd and 4th year);
50% of Income
For the last one years (5th year);
25% of Income
If the said undertaking is set-up in Rajshahi, Khulna and Barisal divisions, and hill
districts of Rangamati, Bandarban, and Khagrachari; for a period of 7 years beginning
with the month of commencement of commercial production or operation;
56
Income Tax
C.
Rate of Exemption
100% of Income
50% of Income
25% of Income
Computation of Tax Holiday Income

a. The profit and gain shall be computed under the head income from business or
profession (section 28)
b. Loss sustained in a tax holiday undertaking shall not be set off against profits of
taxable units. Loss shall be carried forward to be set off against income from same
undertaking in the following years, but not beyond tax holiday period;
c. Only normal depreciation allowance, if any, shall be allowed;
d. Any dividend distributed by a tax-holiday company to its shareholders out of its
exempted profit shall not be exempt from tax;
e. Capital gains earned by tax holiday undertaking shall not be exempt from tax;
Income of the said undertaking resulting from disallowance made under section 30
shall not be exempted from tax;
41. Tax Holiday for Hospitals: [SRO 204-Ain/IT/2005 dated 6th July 2005]
a. A newly established private hospital will be eligible for exemption of income for another 5
years subject to the following conditions:
b.
c.
d.
e.
f.
The hospital is owned by a company registered under the Companies Act 1913 or 1994;
The hospital is established between the period 1st July 1999 to 1st July 2008 in the
private sector;
The hospital is housed in a building constructed on the companys own land;
The hospital has number of beds (i) 200 beds in case of general hospital (ii) 50 beds in
case of specialized hospital for heart, kidney and cancer patients;
10% of the beds must be kept reserved for treatment of poor free of charge;
Period of Exemption
For the first three years (1st, 2nd & 3rd year);
For the next three years (4th, 5th & 6th year);
For the last one year (7thyear);
42. New List of eligible sectors for Tax Holiday: [Section 46B]
i. Industrial Undrtaking
a. Textile;
b Jute goods;
c. High Value Readymade Garments (overcoat, jackets, suits);
d.
e.
f.
g.
h.
i.
j.
Pharmaceuticals;
Melamine;
Plastic products;
Ceramics & sanitary ware;
Steel from iron ore;
Sanitary ware;
MS Rod & CI Sheet;
57
Income Tax
ii.
k. Fertilizer;
l. Insecticide & pesticide;
m. Computer hardware;
n. Residential hotel having facility of three star or more;
o. Petro chemicals;
p. Basic raw materials of drugs, chemicals & Pharmaceuticals;
q. Agricultural machine;
r. Boilers & compressors;
s. Textile machinery;
Physical Infrastructure Facility:
a. Sea or river port;
b. Container terminals, internal container depot (ICD) & container freight station (CFS);
c. LNG terminal and transmission line;
d. CNG terminal and transmission line;
e. Gas pipe line;
f. Flyover;
g. Mono-rail & underground rail;
h Telecommunication other than mobile phone
i. Large water treatment plant & supply through pipe line;
j. Waste treatment plant;
k. Solar energy plant;
l. Export processing zone;
And any other category of industrial including as the government may be notification in
to official Gazette specify.
iii.
Tourism Industry:
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.
43. Advance Payment of Tax: [Section 64]
The ceiling of the amount of income for payment advance tax is taka 300,000; [Section 64]
The new assesses have been exempted from the payment of advance tax unless their
income exceeds taka 300,000; [Section 68]
Advance tax is payable by an assessee during each financial year if the latest assessed income
(assessment completed either on regular or provisional basis before the fifteenth May of the year)
exceeds Taka 300,000. Advance tax is payable in four equal installments on 15th September, 15th
December, 15th March and 15th June. If one estimates that ones income during any financial year
will be less than the last assessed income, one may submit an estimate of income of ones own
and that the tax paid on the basis of the estimate does not fall short of 75% of the tax payable on
regular assessment. Because, if the tax paid falls short he is liable for interest. [Section 73]
58
Income Tax
44A. Payment on the Basis of Return: [Section 74(1)]
Every person who is required to file a return under Sections 75, 77, 78, 89 (2), 91 (3) & 93 (1)
shall, on or before the date on which he files the return, pay the amount of tax payable by him
on the basis of such return as reduced by the amount of any tax deducted from this income or
paid by him.
44B. Mode of payment of Tax by assessee(rule-26A)
All payments of Tax U/S-64,70,73,74,82D,83(2),84,89(3),107(2)(a),120,121(4)(a),123129,135(2),137(1),154(1),158(5),160(1) and any other payments shall be made by pay
order or demand draft or account payee cheque of scheduled bank in favor of concerned
DCT.
45. Filing of Return of Income and Statement: [Section 75, 76, 77 & 78]
Every person whose total income during an income year exceeds the exemption limit i.e. the
maximum amount which is not chargeable to tax and every person whatever his income in
the income year who was assessed to tax for any year within three years preceding that year,
shall furnish a return setting forth therein (along with such other particulars as may be
prescribed) his total income and total income during the income year.
Every company shall file a return of its income or the income of any other person for whom
the company is assessable, on or before the date specified.
Where a person is not required to file a return under sub-section 1 of section 75, he is to file a
return if he:
a.
resides in a city corporation or pourashava, or divisional head quarters or district head

quarters and fulfils any of the following conditions:
i.
owns a more than one story building with an area of more than 1,600 sft;
ii.
owns a motor car;
Provided that payment does not exceed Taka 10,000 can be made through treasury
challan.
iii. subscribes a telephone;

iv. is a member of club registered under VAT Act 1991;
b.
runs a business or profession with trade license from a city corporation or pourashava,
union parishad and operates a bank account;
c.
is registered with a recognized professional body as a doctor, dentist, ITP, CA, CMA,
engineer, architect, surveyor or any similar profession.
d.
member of a club or a trade association;
e.
is a candidate for an office of pourashava or a city corporation or a member of a parliament;
f.
participant in a tender floated by government, semi-government, autonomous body or

local authority;
g.
has a tax payers identification number in accordance with the provision of section 184A;
59
Income Tax
Every individual shall furnish, along with the return or the certificate, as the case may be,
a statement in the prescribed form and verified in the prescribed manner giving
particulars of the total assets and liabilities of himself, his spouse and his minor children
and dependants. He shall also furnish particulars of his personal and family expenditure
as per proforma determined by the board to be called life-style as per rule 25A. In the
case of a company the return will be accompanied by a statement of accounts audited
by a chartered accountancy firm.
46. Assessments:
i.
Assessment on Correct Return: [Section 82]

Where a return or a revised return has been filed under Chapter VIII and the Deputy
Commissioner of Taxes is satisfied, without requiring the presence of the assessee or the
production of any evidence, that the return is correct and complete, he shall assess the total
income and determine the tax payable by him on the basis of such return and communicate
the assessment order to the assessee within thirty days next following: Provided that-
Such return shall be filed on or before the date as specified in clause (c) of sub
section (2) of section 75;
The amount of tax payable shall be paid on or before the date on which the return is
filed; and
Such return does not show any loss or lesser income than the last assessed
ii.
income, or assessment on the basis of such return does not result in refund;
Universal Self Assessment [Section 82 BB]
Where an assessee furnish a correct and complete return of income, the DCT shall
receive such return himself or cause to be received by any other official and issue a
receipt of such return and, the receipt shall be deemed to be an order of
assessment for the assessment year for which the return is filed.
A return shall be taken to be complete, if it is filed in accordance with the provisions

of sub-section (2) of section 75
The amount of tax payable shall be paid on or before the date on which the return is
filed in accordance with section 74.
The Board or any authority authorized by the Board may select a number of such
returns filed may refer to the DCT for the purpose of audit to make the assessment
under section 83 or 84.
No question as to the source of investment made by a new assessee
deriving income from business or profession shall be raised , if he shows

income at least not less than 25% of the capital invested in business or
profession and pays tax on such income before filling of income.
The initial capital investment or any fraction thereof shall not be transferred
in any - manner or lent out within 5 years from the end of the assessment
year in respect of which assesses return of income has been filed under
this section.
60
Income Tax
iii.
Final Settlement of Tax Liability: [Section 82C]

The settled liability scheme under section 82C was introduced in 1998. Certain
incomes/receipts are treated as income under the scheme and taxes are collected or
deducted at source from such incomes/receipts. Taxes deducted or collected at source
are treated as final settlement of tax liability on the deemed income under the scheme.
Following classes of incomes/receipts are referred to under the settled liability scheme
in respect of which tax has been deducted or collected at source:
1. Supply of goods or execution of contract on which tax is deductible u/s. 52;
2. Manufacture of cigarettes u/s. 52B;
3. Shipping business of a resident on which tax is collectible under section 53AA;
6. Income from courier business of a non resident under section 53CC;

7. Import of Goods u/s.53 not being goods imported by any industrial undertaking as
raw materials for its own consumption;
8. Value of the property from which tax is collectible u/s. 53H;
9. Interest on savings instruments on which tax is deductible u/s. 52D;
10. Amount on account of winnings referred to in section 19(13) on which tax is
deductible under section 55;
11. Export of manpower on which tax is deductible under section 53B;
12. Remuneration or reward, whether by way of commission or payable to an insurance
agent, on which tax is deductible under section 53G;
13. Auction purchase on which-tax is collectible under section 53C;
14. Payment on account of survey by surveyor of a general insurance company under
section 53GG;
4. Real estate or land development business u/s 53FF;

5. Transaction by a member of a stock exchange for which tax is collectible under
section 53BBB;
15. Payment of royalty, technical know-how fee, for which tax is deductible under
section 52A(2);
16. Commission from clearing & forwarding under section 52AAA;
17. Export of certain items under section 53BB;
18. Salaries of a foreign technician serving in a diamond cutting industry [Section 52O];
The above rules shall NOT apply to:
The provisions of sub-section (1) of section 82C shall not apply in the case of
supply of goods or execution of contract as mentioned in clause (a), with respect to
a contractor of an oil company or a sub-contractor to the contractor of an oil & gas
company as referred to in Rule-39 of the I.T. Rules;
The provision of sub-section (1) shall not apply in the case of deduction of tax from
sale proceeds of building or lands as mentioned in clause (d) with respect to any
investment made under sub-section (10) of section 32;
61
Income Tax
An assessee shall not be allowed to take into account the full amount of income or
receipts from which tax has been deducted or collected and considered as settled
liability in explaining the nature and source- of any sum, investment, money, valuable
articles, excess amount or expenditure referred to in section 19. The income on
payments or receipts represented by the tax deducted at source can only be allowed as
a source of fund for explaining any investment, etc;
47. Final Discharge of Tax Liability [Section 82C (4)]
Incomes referred hereinunder in respect of which tax have been deducted or collected at
source, at rates specified below, shall be deemed to be the final discharge of Tax Liability:
SL
Description
TDS u/s
Rates
01
Supply of goods and execution of contract, including

indenting commission, shipping commission, etc
52
(Rule 16)
Slab
02
Manufacture of Cigarette
52B
6%
03
Import of Goods
53
3%
04
Transfer of Property under Registration Act 1908
53H
5%
05
Interest on Savings Instruments
52D
10%
06
Income from Lottery
55
20%
07
Export of Manpower
53B
10%
08
Insurance Commission Income
53G
7.5%
09
Public Auction Purchase
53C
7.5%
10
Fees of Surveyors of General Insurance Co.
53GG
7.5%
11
Royalty and Technical Know-how Fee
52 A(2)
10%
12
Commission of Clearing & Forwarding Agency
52AAA
7.5%
13
Income from Shipping Business
53AA
5%
14
Transfer of Property
53FF
Flat 250 sft

Land 5%
15
Commission of Members of Stock Exchanges
53BBB
0.025%
16
Courier Business of non-residents
53CC
7.5%
17
Export of certain Items
53BB
0.25%
18
Salary of Foreign Technician engaged in Diamond Cutting
52O
5%
iv.
62
Assessment on the basis of Report of a Chartered Accountant: [Section 83AAA]

Where a return or a revised return filed by a company is reasonable believed to be
incorrect or incomplete, the Board may appoint a registered Chartered Accountant to
examine the accounts of that assessee.
Income Tax
The Chartered Accountant shall exercise the powers and functions of the DCT and after
examining the accounts shall submit a report to the Board in writing. The Board shall
forthwith forward the report to the Deputy Commissioner of Taxes and the Deputy
Commissioner of Taxes after giving an opportunity to the assessee shall make the
assessment on the basis of the report of the chartered Accountant and on the basis of
the other evidences within thirty days after completion of hearing or consideration as the
case may be and communicate the order within thirty days from the date of such order.
Assessment and computation of Income of Contractor of an Oil company (Rule 39)
1. Any person/company who resides out of Bangladesh and carries on business in
Bangladesh under an agreement as a contractor to an oil company or as a
subcontractor to the contractor to an oil company engaged in Petroleum Operations
in Bangladesh for exploration and development of oil & gas may exercise an option
for ascertainment of income, profits and gains from the operation of drilling of oil,
geophysical survey, marine seismic survey, shallow water seismic survey and other
activities relating to petroleum operations, under Rule 39.
In such case his income, profits and gains derived from such operations shall,
subject to the provision of this rule, be deemed to be an amount equivalent to 10%
of the gross earrings from such operations provided that:
_ such option shall be exercised before the 30th day of September of the year
of assessment in which such person is assessable for the first time in
Bangladesh.
_ the option once exercised shall be treated as final and shall be applicable to all
assessments thereafter.
2. For the purposes of the Rule 39:
a. The expression income, profits and gains shall mean the net income,
profits and gains determined after considering all expenses, allowances and
depreciation as allowed for the purposes of sections 28, 29 and 30 of the
Ordinance;
v.
b. the expression gross earnings shall include the total value of all fees,
moneys, income, compensations or reimbursable costs as stipulated in the
agreement with the oil company, or in the agreement with the contractor to the oil
company (whether in cash or in kind and whether received or not) derived from the
operations referred to in sub-rule by the person but excluding the amount of tax, if any,
paid or payable on behalf of the said persons, as reduced by the following amounts(i)
amount constituting compensations or reimbursements exclusively for

expenditures effected by the said person for the purchase of equipments
for the oil company, which are, in fact, not his responsibility; and
(ii)
amount constituting compensations or reimbursements exclusively for

expenditures effected by the said person for the purpose of transporting or
moving, drilling and other equipments into and out of Bangladesh
63
Income Tax
vi.
Spot Assessment u/s 82D and Rule 38B;
vii. Provisional Assessment u/s 81;

viii. Best Judgement Assessment u/s 84;
ix.
Assessment in the case of discontinued business u/s 89;
x.
Assessment in the case of Deceased Persons u/s 92;
xi.
Assessment in the case of departure from Bangladesh u/s 91;
xii. Assessment in the case of Minors, Lunatics, Idiots, Beneficiaries of any Trust, etc. u/s 95;
xiii. Assessment of Co-operative Societies u/s 47;
48. Avoidance of Double Taxation: [Section 144]
64
The Government of Bangladesh may enter into an agreement with the Government of other
countries for the avoidance of double taxation and prevention of fiscal evasion with respect to taxes
on income leviable under the Ordinance and also under corresponding law of the other country.
Under the agreement, each dominion determines the total income of an assessee in the ordinary
way under its own laws but in respect of the source of income or categories of transactions, as
specified in the agreement, it is entitled to retain tax on such portion of the income there from as is
calculated according to the percentage as embodied in the agreement.
At present, Government of Bangladesh has entered into agreement for the avoidance of
double taxation with the following 28 countries: U.K, Singapore, Sweden, South Korea,
Canada, Romania, Pakistan, Sri Lanka, France, Malaysia, Japan, India, Netherlands,
Germany, Italy, Denmark, China, Belgium, Poland, Thailand, Philippines, Vietnam,
Norway, Turkey, USA, Indonesia, switzerland and Oman.
49. Relief in respect of Foreign Income: [Section 145]
Where there is no reciprocal arrangement for avoidance of double taxation, relief is available in
respect of doubly taxed income. If any person who is resident in Bangladesh during any year can
prove to the satisfaction of the Deputy Commissioner of Taxes that he paid income tax in respect of
any income arising outside Bangladesh, he shall be entitled to deduction from Bangladesh income
tax payable by him of a sum equal to the tax calculated on the double taxed income at the
Bangladesh rate of tax or at the rate of tax of the foreign country , whichever is the lower.
Value Added Tax

50. Deduction of VAT at source:
The authority for deducting VAT at source has been given to the Government, SemiGovernment, Autonomous Organizations, Non-Government Organizations (NGOs), Bank,
Insurance or Limited Company. The services on which deduction at source applicable are
listed below: [ Note : VDS shall be deposited to govt. Exchequr within 2 months of
deduction or collection. u/s-6 (4C) of VAT Act 1991]
Service
Code #
Service Provider
Rate of
Deduction
( %)
S 003
S 003.10
Motor Garage & Workshop;
4.5
S 003.20
Dockyard;
4.5
S 004
S 004.00
Construction Works/Firms ( Builders);
4.5
S 007
S 007.00
Advertisement Organisation:
Govt., Semi-Govt., Autonomous Body, Nationalised
Bank and Insurance Sector;
15
Private Organisation, Non-Govt. Sangstha (NGO),

Private Bank & Insurance, Limited Company, Any
Sangstha and Person;
Others
15
4.5
15
S 008
S 008.10
Printing Press if value of material included;

Printing Press if value of material not included;
S 009
S 009.00
Auction;
15
S 010
S 010.10
Land Development Organization;
1.5
S 010
S 010.20
Building Construction Organization;
1.5
S 015
S 015.00
Freight Forwards;
15
S 018
S 018.00
Film Studio;
15
S 019
S 019.00
Photo Grapher;
4.5
S 020
S 020.00
Survey Sangstha;
15
S 023
S 023.20
Film Distributor;
15
S 024
S 024.00
Sales Centre of Furniture:
3 At the time of production;

3 At the time of marketing subject to treasury
4.5
1.5
15
challan for 4.5% at production stage ;
S 026
S 026.00
Goldsmith, Silversmith and Gold & Silver trader;
S 028
S 029
S 028.00
S 029.10
Courier & EMS Service;

Medical Centre;
Head #
4.5
2.25
65
Value Added Tax
Head #
66
S 029
S 029
S 031
S 032
S 033
Service
Code #
S 029.20
S 029.30
S 031.00
S 032.00
S 033.00
S 034
S 036
S 036
S 037
S 040
S 044
S 045
S 048
S 034.00
S 036.10
S 036.20
S 037.00
S 040.00
S 044.00
S 045.00
S 048.00
S 049
S 050
S 051
S 053
S 056
S 057
S 059
S 060
S 061
S 062
S 063
S 064
S 064
S 065
S 066
S 067
S 068
S 069
S 070
-
S 049.00
S 050.00
S 051.00
S 053.00
S 056.00
S 057.00
S 059.00
S 060.00
S 061.00
S 062.00
S 063.00
S 064.10
S 064.20
S 065.00
S 066.00
S 067.00
S 068.00
S 069.00
S 070.00
-
Service Provider
Dental Clinic;
Pathological Laboratory;
Repairing or Servicing of Taxable goods;
Consultancy firm and Supervisory firm;
Rental value of commercially used floor space,
estiblishment, furniture, fixures and fitings
Audit and Accounting Firm;
Air-Conditioned Bus Service;
Air-Conditioned Launce Service;
Procurement Provider;
Security Service Provider;
Specialized Doctors;
Legal Advisors;
Transport Contractor:
3 For carrying petrol and related goods;
3 Others;
Transport Fare or Rent-a-car;
Architect, Interior Designer or decorator;
Engineering Firms;
Participant of Board Meeting;
Banking and non-banking service provider;
Electricity Supplier;
Glass Sheet Manufacturer;
Buyer of Auction Goods;
Credit Card Supplying organization;
Money Changer;
Air Conditioned Tailoring Shop;
Amusement and Theme Park;
Picnic Spot and Shooting spot;
House clearing and Maintenance organization;
Lottery ticket seller;
Immigration Advisor;
Coaching Centre;
English Medium School;
Private Medical and Engineering College;
Advance Trade VAT (ATV)
Rate of
Deduction (%)
2.25
2.25
15
4.5
15
4.5
5.0025
4.5
2.25
4.5
4.5
4.5
2.25
4.5
4.5
4.5
15
15
15
5.0025
15
1.5
15
15
4.5
4.5
4.5
2.25
15
4.5
4.5
4.5
4.5
2.25
Gift Tax
51
Gift Tax:
The gift tax is leviable on gift made in any financial year on and from the 1st day of July 1990
at the prescribed in the schedule [u/s-3]. Gift means the transfer by one person to another of
any existing immovable or moveable property made voluntarily and without consideration of
any money or money's worth Sec 2 (d), The Gift Tax Act 1990;
The value of property under gift other than cash shall be the value which, in the opinion of the
Deputy Commissioner of Taxes, it would fetch if sold in the open market on the date of gift.
When a property is not saleable in the open market and its value cannot be determined
according to the rules prescribed for the purpose. Methods of valuation of gift have been
provided in the section 5 of the Gift Tax Act 1990.
52. Exemption from Gift Tax: [Section 4]
1)
of property situated outside Bangladesh;
2)
to the Government or any local authority;
3)
to the following funds or institutions, for charitable purpose:

(i) any University established under the law in force in Bangladesh or any educational
institution including polytechnic institute, recognized by the Education Board or
recognized or run by the Government;
(ii) any hospital recognized or run by the Government or any local authority or any
hospital aided by the Government or any Local Authority;
(iii) any flood or disaster management fund established or approved by the Government;
(iv) such institutions or funds for religious or charitable purposes, not being a private
religious institution or fund which does not ensure for the benefit of the public, as
are established in Bangladesh and approved by the Government for such purposes
or to any institution established for religious or charitable purposes and registered
under any law for the time being in force, upto 20% of the total income determined
for the concerned year or Tk. 100,000 whichever is less;
Gift tax shall not be charged under the Act in respect of the following gifts made by any
person:
4) to dependent relative upto Tk. 20,000 on the occasion of his/her marriage;

5) by way of payment of policy of insurance or annuity for any person (other than
wife/spouse) dependent upon him for support and maintenance upto Tk. 20,000;
6)
under a will;
7) under contemplation of death;

8)
to sons, daughters, father, mother, his or her spouse, own brothers and sisters;
In addition to the above exemptions, gifts made in any financial year up to value of Tk.
20,000 are exempt from gift tax. The Government may by notification exempt any class
of gift or any class of person from gift tax.
67
Gift Tax
53. Provisions of the Gift Act shall NOT apply to following gifts made by: [Section 20]
1)
a body corporate established or constituted by or under any law
2)
any institution or fund, income whereof is exempt from income tax under paragraph 1
and 2 of Part A of the Sixth Schedule of the Income Tax Ordinance 1984;
54. Return of Gift Tax: [Section 7]

Every person who had made taxable gift during any financial year of an amount as to render
him liable to gift tax under the gift tax act shall before the fifteenth day of September of the
corresponding assessment year furnish to the Deputy Commissioner of Taxes a return in the
prescribed form and in the prescribed manner. Tax on the basis of the return is payable on or
before the date on which such return is furnished.
55. Rates of Gift Tax [Section 3]:
68
Particulars (Slab Amount of Taxable Gifts)
Percentage Rate (%)
On the first Tk. 500,000 of the value of all taxable gifts;
On the next Tk. 1,000,000 of the value of all taxable gifts;
10
On the next Tk. 2,000,000 of the value of all taxable gifts;
15
On the balance of the value of all taxable gifts;
20

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Accounting, Payroll, Employees Benefits Management,

Bangladesh Tax Handbook

Baizid Md. Faiaz, MBA

The National Budget of Bangladesh for the year (Fiscal

All right reserved

JHK Windcel, Western Block, Level 4

Tax Exemption Limit:

Personal Tax Rate Structure:

Income Year 2007-2008

On the first Taka 165,000

On the first Taka 180,000

On the first Taka 165,000

On the first Taka 180,000

On the first Taka180,000 of

On the next Taka 275,000 of

ii. On the next Taka 275,000

iii. On the next Taka 325,000

iii. On the next Taka 325,000

iv. On the next Taka 375,000

iv. On the next Taka 375,000

v. On the balance of total

On the balance of total income

Non-Resident (Foreign) assessee

Non-Resident (Foreign) assessee

Changes in Taxation Laws 2009-2010

Minimum Tax: Individuals

Minimum Tax: Individuals Tk. 2,000

Minimum Tax (Company)

Minimum Tax (Individual):

Bangladesh Tax Handbook 2009-2010

Changes in Taxation Laws 2009-2010

Investment Allowance for Tax Credit: [Section: 44]

Light engineering Agro processing industry

Textile machinery Drugs and Pharmaceuticals

Shrimp processing industry

Milk processing industry

Basic raw materials of

Cosmetics and toiletries

Basic chemicals and dyes

Recycling industry Herbal medicine

Jute goods producing

Physical Infrastructure Facilities will include River or sea-port; container terminals;

Changes in Taxation Laws 2009-2010

Declaration under section 19A for Special tax treatment:

Name and address of the assessee:________________________________________

Source(s) of Investment (in figures): __________ (in words) _____________________

(6) Probable date of completion of investment ___________________________________

Bangladesh Tax Handbook 2009-2010

Changes in Taxation Laws 2009-2010

Special Tax Treatment for Investments in House Property (u/s 19BBBB):

Area Plinth Area of flat/house

Gulshan, Banani, Baridhara,

Upto 100 Sq. meter

Per SqM TK. 800

More than 100 but not

Per SqM Tk. 1,000

More than 200 Sq. meter

Per SqM Tk. 1,500

Area other than specified in (a)

Upto 100 Sq. meter

Per SqM Tk. 400

More than 100 but not

Source(s) of Investment (in figures): (in words) ___________