07. payment of tax before assessment ICAB, KL, Study Manual

Taxation-l StudyManual
Chapter 7
Payment of tax before assessment
Contents
Introduction
Examination context
7.t-_lh6m;; subiCfiJaeauliion ii iource
__
7.3-trrne t-imit fof Payment of Tai DiauliedirSorlicL
7.4 , Mannei of Pitnena oT Tt Daauaiaaai $urct-
75 lssuanc$feerrincat,tlotTtf;i$urca
7r-nate$iTDs ---
i 7.7 i Other lssues relating to TDS
I Advance Payment of Tax
ffi;iaad;atdtm;nioTtax
7.-eomputat'ron oGdarte ta;--- --_
f imlnsdidenfiGAtane-e tax
--*--
advance tax
:7.12 i Advance payment oftax by new assesses
i l.l3 : Failure to pay installments i
7l?---te'adf 'rntereai6iEilwelopi/ia-van-cJtax
-l5leaed'rroi;avarrce6 ----l
:,
I tf intereJt payaure uy Governnieirron dxless paymenr or aduinie rii -]-7.n - GEE;t p*aF66by the iiselsee on ienlien-y in ptmail of ;dVanie tax-
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=2. te- eiymlni6f tax on the uiiii ot 6ii,h- |
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@The Insdtute of Chanered Accountants of Bangladesh

Taxation-l Study Manual
c) As per SRO no. 216/AlN/lT/2005 dated 166 July, 2005, provision has been made for
exemption of Bangladeshi resident's income aftributable to software business upto 30'h
June, 2008. The person enioying the exemption will have to furnish income tax return
for every year of the exemption Period.
As per SRO No. 177ll.T/2002 dated 3'd July, 2002 provision has been made for taxing
the income of new industrial undertaking established during the period from l" July,
2002 to 30'h June, 2005 at the rate 20% on fulfillment of some conditions.
SRO no. 2 | 6-AlN/lT/2004 dated | 3'h July, 2004 : By this notification the Government has
exempted from income tax any income accrued outside Bangladesh to any Person
irrespective of his status as resident or non-resident if such income is brought into
Bangladesh under existing laws.
SRO no. 2 | 7-AlN/lT/2004 dated | 3'h July, 2004 : By this notification the Government has
exempted from income tax any income accrued outside Bangladesh to any person who
is resident in Bangladesh, but not a Bangladeshi citizen if such income is brought into
Bangladesh under existing laws.
sRo no. 200/-AlN/lT/2005 dated 06.07.2005 - Any person having not previously
declared any income can declare the same undisclosed income from other sources
during the period from 0l.O7.2OOS to 30.05.2006 on Payment of 7.5% tax thereon and
no question as to the source of money shall be raised. The declared income shall not be
added with any income from other sources Previously shown in the return and tax
thereon have been paid at normal rates in determination of total income declaring under
the Ordinance and the opportunity under this notification shall not constitute immunity
from action if any taken. previously under section 93 of the l.T. Ordinance. The
declaration has to be made in prescribed form.
Exemption on lncome from Fish Farming, Poultry Farming Duckery, Cactle Farming, Dairy
Farming, Frog Farming, Honiculture, cultivation of Mulberry, cocoon, Mushroom and
from Floriculture: S.R.O.309-/91 Dated 9 october l99 l;S.R.O. No.207-ll93 Dated 18
october 1993; S.R.O. 127-U2000 Dated ll May 2000; and S.R.o. 215/1Ti2003 Dated 20
July 2003, SRO 206/Ain/lt Dated 6th July 2005
(d)
(e)
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@The Institute of Chartered Accountants of Bangladesh
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lntroduction
Learning objectives
. Recognise different classes of income from where tax are deducted or collected at source.
. Mention the time limit and manner of payment of tax deducted at source.
. Explain the result of deduction or not deduction of ux at source where deduction is
required by law.
. Define the computation, estimation and payment procedures of advance tax.
. Mention the consequences of payment or not payment of advance tax.
Practical significance
There are two methods of collecting taxes, one is direct method and another is tax deducted at
source. The ordinary method of collection is direct collection of tax from the assessee.
Deduction of tax at source is provided for in cenain specified cases. The deducted tax shall be
credited accordingly with the final payment of tax. lf default is made in the deduction of taxes at
source, the tax may be collected from the assessee directly, and further the person who is liable
to deduct but has not deducred the tax under this section, may be held personally liable and
treated as an assessee in default in respect of the tax.
Depending on assessed or provisionally assessed income, an assessee may require to pay advance
tax. In some cases the new assessee also require to pay advance tax. The calculation of amount,
rate, esrimation and installment of advance tax are guided by the Ordinance. The assessee shall
get the credit of advance tax. In case of excess or deficit payment of advance tax an assessee may
receive or pay the inrerest from or to the Government. Tax paid in advance shall be adlusted at
the time of tax payment on the basis of the return.
Stop and think
There are so many sources where tax is required to be deducted or collected at the time of
payment. Do you think how both tax deducted at source and advance payment oftax are madel
Working context
In corporate sectors, normally there are many payments made every day where deduction of tax
ar source are required by tax law. In some cases the accountants are asking for advice on how
and when the deduction need to be done. The service for estimation and calculation of advance
tax also reguired by some assessee. Accountants can provide the service to their clients on tax
deduction at source and due paymenr of advance tax so that the clients can avoid any penalty for
non-compliance of tax law in this regard. .
Detailed knowledge about the payment of tax before assessment in compliance with tax law can
help accountants to support their clients significantly.
Syllabus links
You will also meet this area of taxation at application level and at case study in advanced stage.
@The lnstitute of Chanered Accountants of Bangladesh
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Examination context
Exam requirements
In the examinadon, candidates may be required to:
. ldentifr the classes of income from where tax are dedutted or colleced ar source.
. Recognise rhe different amounc and rates of tax deducted at source.
. ldentify the responsibiliry for deduction of tax ar source.
. Define the dme limit for paymenr of tax at source.
. Mention the manner of payment of tax deducted at source.
' Explain the result of deduction or not deducdon of tax at source where deduction is
required by law.
. Define the requirement ofadvance payment oftax.
' Demonstrate how the computation, estimation and payment procedures of advance tax are
made.
. Describe the consequences of payment or not payment of advance ta:<.
Question practice
For question practice on these topics go to the suggested answers covering this chapter.
Examiner's comments on how students tackle questions
Candidates need to remerhber the different amount and rates of tax deducted at source while
preparing for exam. In pracdcal problem at case study level both tax deduction at source and
calculation of advance tax may be asked.
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7.1
7.0 PAYMENT OF TAX BEFORE ASSESSMENT
Section Overview
) There are rwo merhods of collecting taxes, direct tax and tax deducted at source [IDS)
) There are many classes of income from where tax are deducted or collected at source.
t TDS shall be paid to the credit of the Government within three weeks from the date of such
deduction or collection.
) Rate of TDS are varied.
) The deducted tax shall be credited accordingly with the final payment of tax'
) An assessee may require to pay advance tax.
) The assessee shall get the credit for both TDS and advance tax
Deduction at Source and Advance Payment ofTax: Sec 48
(l) Notwithstanding that regular assessment in respect of any income is to be made later in
any assessment year, and without preludice to the charge and recovery of tax under the
Ordinance after such assessment, the tax on income shall be payable by deduction or
collection at source, or by way of advance payment, in accordance with the provisions of
this Chapter.
(2) any sum deducted or collected or paid by way of advance Paymeng in accordance with
the provisions of this chapter, shall for the purpose of computing the income of an
assessee. be deemed to be the income received and be treated as Payment of tax in due
time by the assessee.
Income Subiect to Deduction at Source: Sec 49
Tax payable under the Ordinance shall be deducted or collected at source in respect of the
following income, namely-
7.2
income, classifiable under the head 'Salaries'[Sec 49(l)(a)];
income from discount on the real value of Bangladesh Bank bills [Sec 49( | )(aa)];
income. classifiable under the head 'lnterest on securities'[Sec 49(l)(b)];
income derived on account of supply of goods, execution of contracts or services
rendered [Sec 49( I )(c)];
income derived by the importers and exPorters on account of import and expon of
goods [Sec a9(l)(d)];
income derived on account of indenting commission [Sec 49(l)(e)];
income derived on account of winnings from lottery or crossword puzzles, as referred
to in section l9 (13) [Sec a9(l)(f)];
any income chargeable under the Ordinance which is paid or payable to a non-resident
[sec ae( I )(g)];
income, classifiable under the head'lncome from house property'[Sec a9(l)(h)];
income derived on account of export of manpower [Sec 49( l)(i)];
income derived on account of purchase by public auction [Sec a9( | )(l)];
income derived on account of acting in films [Sec a9(l)(k)];
income derived on account of shipping agency commission [Sec a9(l)(m)];
income derived from commission, discount or fees payable to distributors for
distribution or marketing or manufactured goods [Sec a9(l)(n)];
income derived on account of interest on saving deposits' fixed deposits and share of
profits on term deposits [Sec a9( | )(o)];
(t)
(2)
(3)
(4)
(s)
(6)
(7)
(8)
(e)
(10)
(il)
(t 2)
(t 3)
(t4)
(ts)
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Taxation- | Study Manual
( t6)
( t7)
( t8)
(te)
income derived on account of insurance commission [Sec a9( l)(p)];
income, classifiable under the head 'Capital gains'[Sec 49(l)(q)];
income derived on account offees for professional or technical services[sec a9(l)(r)];
income derived on account of manufacture of cigarettes manually withouc any
mechanical aid whatsoever [Sec 49( l)(s)];
(20) income derived from compensation againsr acquisition of property [sec a9( l)(t)];
(2 | ) income derived on accounr of interest on saving instrumens [sec 49( | )(u)];
(22) income derived on accounr of running of brick field [Sec a9( 1,1(w)];
(23) income derived on accounr of services rendered by the doctors [sec a9(l)(x)];
(24) income derived on account of commission of lerter of credit [sec a9( l)(z)];
(25) income derived on account of survey by a surveyor of general insurance company [Sec
ae( | )(za)l;
(26) income derived on account of commission, remuneration or charges as a foreign
buyer's agent [Sec 49( | )(zc)];
(27) income from dividends[Sec a9( l)(zd)].
(28) income derived on account of rendering certain services (a9)(i)(ze);
(29) income derived on account of shipping business of a resident (a9)(i)(zf);
(30) income derived on accounr of business of real estate and land developer (a9xi)(zg);
(3 l) income derived by an exporter on account of export of any commodity (a9)(i)(zh);
(32) income derived by a member of a stock exchange on account of transaction of shares,
debentures, mutual funds, bonds or securities (a9)(i)(zi);
(33) income derived on account of courier business of a non-resident (a9)(i)(zl);
(34) on accoount of issuance or renewal of trade licence (49)(i)(zm);
(35) income derived on accounr of trusree fees (49)(i)(zn);
(36) income derived on account of freight forward agency commission (49)(i)(zo);
(37) income derived on accounr of rental power (49)(i)(zp);
(38) income derived on accounr of interest of post office savings Bank Account (a9)(t)(zq);
(39) income derived on account of rental value of vacant land or plant or machinery
(ae)(i)(zr);
(40) income derived on account of advertisement (49)(i)(zs);
(4 1) income derived by foreign technitian serving in a diamond cuting industry (a9)(i)(zQ;
(42) on account of issue of share at a premium (a9)(i)(zu);
(43) income derived from transfer of securities or mutual fund units by sponsor shareholders
of a company etc (49)(i)(zv).
Person Responsible for Tax Deduction at Source: Sec 49L3)
Tax to be deducted at source under section 49(l) in respect of any income shall be deducted in
accordance with the provisions of this chapter by the person responsible for making payment
which constitures the income of the payee. In terms of section 49(3), for the purpose of
Chapter Vll, 'person responsible for making payment', with its grammatical variations and
cognate expressions, means-
(a) in the case of payments constituting income classifiable under head. the 'salaries' not
being payment made by the Governmeng rhe employer himself or, if the employer is a
local authority, comPany or institution, such authority, company or institution, including
the principal officer thereof;
(b) in the case of payment constituting income classifiable under head 'lnterest on
securities' not being Payment made by or on behalf of the Governmeng the authority,
company or other institution issuing the security; and
tl*lIt/
@The Institute of Chanered Accountants of Bangladesh

in the case of payment of any other sum which constitutes an income of the payee
chargeable to tax under the Ordinance, the payer himself, or if the payer is a company
or other institution, such company or institution including the principal officer rhereof.
Time Limit for Payment of Tax Deducted at Source: Rule | 3
All sums deducted or collected in accordance with the provisions of Chapter Vll of the
Ordinance shall be paid to the credit of the Government within three weeks from the daie of
such deduction or collection by the person making the deduction or collection, as the case may
be. However, the Deputy Commissioner of Taxes may, in a special case and with the approval of
the Inspecting Additional Commissioner of Taxes or the Inspecting Joint Commissioner of taxes,
permit an employer to pay the tax deducted from any income chargeable under the head
"Salaries" quarterly on September 15. December 15, March l5 and June 15.
7.4 Manner of Payment of Tax Deducted at Source: Rule | 4
(a) Payments to suppliers and contractors: Rule | 4(2)
Notwithstanding an)'thint conained in rule l4(l) or rule 13, the person responsible for making
deduction, with respect to supply of goods or execution of contract under section 52, fees for
professional or technical services under section 52A, fees for services rendered by doctors under
section 52G, house property under 53A or commission or fees under section 53E of the
Ordinance, shall issue a Cheque equivalent to the amount of tax deducted ar source in favour of
the concerned Deputy Commissioner of Taxes and hand over the same to the person from whom
such tax has been deducted and such person shall deposit the Cheque through income tax challan
form to Bangladesh Bank or the Sonali Bank, as the case may be, and on production of the counrer
foil of the challan, he shall be entitled ro get his remaining dues on the concerned accounr;
(b) Payments to non-residene Rule | 4(3)
Where tax is deducted from payment made to a person who is not a resident in Bangladesh, the
person making such deduction shall deposit the deducted amount through challan to the
Bangladesh Bank or the Sonali Bank, as the case may be.
(c) Interest on saving deposits, fixed deposits and term deposits: Rule l7H
(l) For the purposes of making deduction of tax under section 53F of the Ordinance, each
branch of a scheduled bank including a co-operative bank shall deduct income tax on interest
or share of profit on saving deposits or fixed deposits or term deposits at the time of credit
or payment of the interest or the share of profit, whichever is earlier, and repon the total
amount of tax deducted to its head office.
(2) The head office of each such bank shall deposit the total amount of tax deducted by all its
branches in the Bangladesh Bank, in lump sum under the head of account l/l l4110000/01 l-
Income Tax - other than companies, giving particulars as "Deduction of income tax under
section 53F of the Income Tax Ordinance 1984".
(d) Transfer of property: Rule | 7l (2) to (5)
(a) The collection of tax mentioned in sub-rule (l) shall be made through Demand Draft.
Pay Order or Challan mentioning one of the following heads of accoung namelyi
a. ln the case of the district of Dhaka, the Companies, I l/ I 14 l/0000/010 | -lncom Tax-
Companiesl; and
(c)
7.3

Taxrtion-l Study Manual
b. In other cases, fl/l14l/0000/01 | l- Income Tax Other than Companies.]
(b) The person responsible for registration.of the document shall record on the ransfer
document the amount of the tax and the number and date of the Challan, Demand Draft or
Pay Order, as the case may be.
(c) The Challan, Demand Dnft or Pay Order shall be made in favour of or credited toi
(a) in the case of the district of Dhaka, the Commissioner of Taxes, Central Survey
Zone, Dhakq
(b) in the case of the district of Chittagong, the Commissioner of
Taxes, Taxes Zone-3, Chittagong,
(c) in the case of the district of Raishahi, the Commissioner of Taxes,
Taxes Zone, Raishahi;
(d) in the case of the district of Khulna, Bagerhat and Satkhira, the Commissioner of
Taxes, Taxes Zone, Khulna;
(") in case of other districts:
(D if there exists no taxes office, the Deputy commissioner of Taxes under
whose jurisdiction such district falls;
(ii) if there exiss only one taxes office, the Deputy commissioner of taxes of
that disricc
(iiD if there exists more than one taxes office, the Deputy Commissioner of
Taxes of Circle- | of that districc
(d) The Commissioner of Taxes and the Deputy Commissioner of Taxes concerned shall verify
the amounts of tax so collected with challans received by them from the Treasury Offices
concerned.
(e) Others: Rule l4(l)
The person responsible for making deduction or collection under Chapter Vll of the Ordinance
shall pay the amount of ux so deducted or collected to the credit of the Government by
remitring it wirhin the time specified in rule I 3 into the Bangladesh Bank or the Sonali Bank as
the case may be, accompanied by an income tax challan, blank copies of which can be had from
dre office of the Deputy Commissioner of Taxes for the purpose.
7,5 lssuance of Certificate for Tax at Source: Rule | 8
(a) Supply of goods or execution of contracts or (b) rent of house property or (c)
fees for professional ortechnical services [Rule l8(l)]:
All paying authoriries shall issue a certificate as required under section 58 of $e Ordinance to
the person from whom tax has been deducted under 49(l)(c) (h) or (r) of dte ordinance within
fifteen days of deduction.
(b) Others: Rule | 8(2)
Atl paying and collecting authorities responsible for making deduction or colhction of tax under
clnpter Vll of the Ordinance, except tax in respect of (a) supply of goods or execution of
conrracr or (b) rent of house property or (c) fees for professional or technical services, shall
furnish to rhe person from whom such deduction or collettion has been made a cenificate in the
prescribed form.
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@The Institute of Chanered Accounants of Bangladesh
I

(c) Deduction of Tax at Lesser Rate: Rule ll(l)
The application for a cenificate under section 5l (2) of the Ordinance for deduction at a lesser
rate shall be made in the prescribed form.
(d) Supply of Goods and Execution of Contracts: Second Proviso to Rule l6
Where the Board gives a certificate in writing in the application of any assessee or class of
assesses that total income of such assessee or class of assesses who is a recipient of any payment
will be less than the minimum liable to tax or will be liable to a rate of tax less than the rate
specified in the rule, the person responsible for paying any amount on account of the supply of
goods or execudon of contract shall, unless such cenificate is cancelled by the Board pay the
amount without deduction or deduct the tax at a rate less than the rate specified in this rule.
However, where the Board gives a permission in writing on the application of any person
responsible for paying any amount on account of the supply of goods or execution of contract
under any foreign aided project in Bangladesh, full payment of the bill may be made on
production of the copy of challan as proof of payment of tax deductible from such bill, under the
Third Proviso of Rule 16.
(e) lmporter: Proviso to Rule | 7a
Where tlre Board is satisfied that an imponer is not likely to have any taxable income during any
period or the income is otherwise exempted from payment of income tax under any provision of
the Ordinance, it may, on application by such imponer exempt such person from payqent of tax
for the period during which income of such imponer is not likely to be assessable or is
exempted from payment of tax.
(f) Income from House Property [Rule I la]:
The cenificate under section 53A (3) of the Ordinance shall be issued by the Deputy
Commissioner of Taxes in the prescribed form.

7.6 Rates of TDS as per 8th Schedule: Section 62A inserted by the FA 2009 and
substituted by FA 20 I 0
lrHE ETGHTH SCHEDULE
Deductions/Collections of tax at source
[See section 62AJ
st.
Head of
withholding
Withholding
authori9
Wathholdant
raterrates of tax
Limitation
Salaries [section-50] Any person
responsible for making
such payment
Averate ot the rates
applicable to the
estimated total income
of the payee under this
head
2. Discount on the real
value of Bangladesh
Bank bills. [section-
s0Al
Any person
such payment
Haxrmum rate
3. lnterest on securities
[section-5 | ]
Any person
responsible for issuing
any security
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 a
comPany
4. Payment to
contractors & sub-
contractors [section-
521 [rule -16]
Any Person
such payment
uPto I l( z,uu,uuu/-- Nrl.
From 2,00,001 to Tk.
5,00,000/- ----------t%
From 5,00,001 to Tk.
I s,00.000/-------2.5%
From 15,00,001 to Tk.
2s.00,000/-------3.5%
From 25,00,001 to Tk.
3,00,00,000 ---------4%
where the payment
exceeds Tk. 3,00,00,000
----------5%
in case of oil supplied by
oil marketing companies
upto Tk. 2,00,000---------
--- Nit
where the
payment exceed Tk
2,00,000--------- -4.7 5%
I ax at source
will not be
withheld for
items
prescribed in
rule l7A.
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Head of
withholding
Withholding
authority
vYathholding
rate/rates of tax Limitation
5. Payment on indentint
commission or
shipping agency
commission. [section-
52, rule-l7l
Any person
such Paymenc
on indenting commission
--------7.5%
on shipping agency
commission ----------5%
6. rees tor Uoctors
[section-52A( | )]
The principal officer of
a comPany or the
chief executive of any
NGO or trust
such payment
to%
Royalry or technical
knowhow fee
Isection-52A(2)]
I he 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
making such payment.
8. Fees tor professional
of technical services
[section -52A(3)]
Do t0% rerson
certified by
NBR having
non assessable
income or
person having
income
exempted form
tax
, Payment of certain
services like
stevedoring agency,
private security
service [section-
s2AAl
I ne government or
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.
t0. clearing and
forwarding agents
[section 52AAAI
Commissioner of
Customs
to%
qitarettes
manufacturing
[section 528]
Any person
responsible for selling
banderols to any
manufacturer of
ciEare$es.
6% of the value of the
banderols
tz. Compensation against
acquisition of
propert), [section
s2cl
Any person
responsible for
payment of such
comPensation
(a) 2% ofthe amount
of such
comPensation
against the
immovable propefty
situated within City

sl.
Head of
wlthholding
Withholding
authority
withholding
ratelrates of tax
Llmitation
Corporagon,
Paurashava or
Cantonment Board
(b) l% of the amount
of such
comPensation
against the
immovable proPerty
situated outside the
iurisdiction of CitY
Corporation,
Paurashava or
Cantonment Board
t3. nterest on savlnS
nstruments [section
52Dl
Any person
such payment
0% No deductton
o be made if
the saving
insrument is
purchased by
any approved
suPerannuation
fund of gratuity
fund or any
recognized
provident fund
or any
workers'profit
panicipation
fund.
No tax to be
deducted from
interest, of
Pensioner
Sanchayapatra
and Paribar
Sanchayapatra.
t4. Brick Manutacturer
[section 52F]
Any Person
responsible for issuing
any permission or
renewal of permission
for manufacture of
bricks
Tk. 30,000/- tor one
section brick field.
Tk.45,000/- for two
secdon brick field.
Tk. 60,000 for three
section brick field.
t5. Commission of letter
of credit [section 52]
Any person
responsible for
opening letter of
credit
5%
t6. Renewal of trade
license by City
Corporation or
Paurashave [section
s2Kl
City gorpora$on or
Paurashava.
Tk. 500/- for each trade
license.
17. Freight torward
agency commission
lsection 52Ml
Any person
such oayment
t5%
t8. Rental Power
Company [section
Bangladesh rower
Development Board
4%
@The Institute of Charcered Accountants of Bangladesh

st.
Head of
withholding
Withholding
authority
wrrnnordrng
rate/rates of tax
Limitation
s2NI dunng Payment to any
power generadon
company against
power purchase
within three years
from its
t9. Foreign technician
serving in diamond
cutting industries
[section 52O]
Employer This rate is for
3 years from
appointment of
such foreign
technician and
appointment to
be completed
by 30 June 20 | 0
20. lmporter [section 53] lhe Commassioner of
Customs
5%
2t. House properry
[section 53A] [rule
| 7Bl
I he Government or
any authoriry,
corPoration or body
or any comPany or
any banking company
or any co-oPerative
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 Tk. 20,000/- per
month [p.m.] ---nil
From Tk. 20,000/- to Tk.
40,000/- p.m.---3%
More than Tk. 4O,OOO/-
p.m. ----5%
I nts ooes not
apply if the
owner of house
ProPerty is
given a
cenificate by
the DCT
regarding not
having any
assessable
income during
the year or is
having income
otherwise
exempted from
payment of
income tax.
22- Shipping business ofa
resident [secdon
s3AAl
Customs or any orher
authority duly
authorized
5% of total freight
received or receivable in
or out of Bangladesh
3% of total freight
rdceived or receivable
from services rendered
between two or more
foreipn countries
73. tsxPort ot manPower
[section 538, rule-
rTcl
lhe director General,
Bureau of Manpower,
Employment and
Training
to%
24. Export of Knit-wear
and woven garrnenB,
terry towel, iute
goods, frozen food,
vegetables, leather
goods, packed food
[section 53BB]
0.50% of the total
export proceeds.
Nod deducflon
or deduction at
a reduced rate
to be mad if an
exPorter
produces
ceftificate from
NBR regarding
having fully or
Parrly
exempted
income.
@The Insdqre of Chartered Accountants of Bangladesh
t,*ILi/

f
1,
I
I
I
I
st.
Head of
withholdirtg
Withhblding
authorlty
'Yithholding
rate/rates oftax
Llmitation
25. rlember ol StocK
Exchanges [section
s3BBBl
The Chief Executive
Officer of stock
exchange.
0.05%
76. Export or any goods
except knit-wear and
woven garments,
terry towel, iute
goods, frozen food,
vegetables, leather
goods, packed food
[section 53BBBB]
Bank 0.50% of the total
export proceeds.
No. deduction
or deduction at
a reduced rate
to be made if
an exPofter
produces
certificate from
NBR regarding
having fully or
Partly
exempted
income.
27. Goods or ProPerty
sold by public auction
[section 53C] [rule
tTDl
Any person making
sale.
5% of sale price.
28. Courier business of
anon-resident
[section 53CC]
Any Person berng a
company working as
local agent of a non-
resident courier
com9any.
| 5% on the amount of
service charge accrued.
29. Payment to actors
and actresses [section
53Dl [rule l7E]
The person producing
the film
5% Payment needs
to exceed
thirty six
thousand taka
in the
atgregate in
any income
vear.
30 Commission, discount
or fees [section 53E]
Any person being a
corPoration, body
including a company
making such payment
7.5%
Jl. Commission or
remuneration Paid to
agent of foreign buyer
lsection 53EEl
Bank 7s%
37. Interest on saving
deposits and fixed
deposits [section 53F]
Any person
such payment
This shall not
apply on the
amount of
interest or
share of profit
arising out of
any deposit
pension
scheme
sponsored by
the
government or
by a schedule
bank with prior
approval of the
lovernment"
|

st.
Head of
withholding
wrtnnororng
authoriw
wrcnnotolng
rate/rates of tax
Limitation
55. Keal estate or land
development business
[section 53FF]
Any Person
responsible for
registering any
document for transfer
or any land or building
or aPaftment
(r, I K Z,UUU Per square
meter for building
or aParcment
situated at Gulshan
Model Town,
Bannani, Baridhara.
Defense Officers
Housing Society
(DoHS),
Dhanmondi
Residential Area,
Lalmatia Housing
Society, Uttara
Model Town.
Bashundhura
Residential Area,
Dhaka Cantonment
Area, otiieel
Commercial Area,
Dilkusha
Commercial Area,
Karwan Bazar
Commercial Area.
of Dhaka and
Khulshi Residental
Area Panchlaish
Residential Area and
Agrabad of
Chittagong.
(ii) Tk 800 hundred per
square meter where
the building of
apaftment is
situated in areas
other than areas
mentioned in sub-
clause (i)
2% of deed value from
September l,2009 in
case of property situated
in any city corporation,
paurashave or
cantonment board.
| % of deed value from
September l,2009 !n
case of property in
situated in places other
than any city
corpor:rtion, paurashava
or cantonment board.
34. lnsurance commission
[section 53G]
Any person
responsible for paying
such commission to a
resident
5%
35. rees ol surveyont ol
general insurance
company [section 53
GGl
Any Person
responsible for paying
such fees to resident
t5%

st.
Head of
ithholdinc
Withholding
authority
wrrnnororng
rate/rates oftax Limltatlon
36. Transfer of property
[section 53H]
Any person
responsible for
registering any
document of a Person
5% of deed value up to
3 l " Augus! 2009 and
2% ol deed value from
l" September, 2009 in
in ay city corporation,
paurashava or
cantonment board.
| % of deed value from
l"' September, 2009 in
in areas other than any
city corporation,
paurashave or
cantonment board.
I nrs snall not
apply to sale by
a bank or a
financial
institution as a
morrtatee
empowered to
sell; mortgagee
of any property
to the BHBFC,
mortSatee to
any bank of any
ProPeny,
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 fl 5l
of section 2;
rabfer of any
non agricultural
land valued at a
sum not
exceeding one
lakh taka,
situated
outside the
iurisdiction of
any city
corPoration,
paurashave or
cantonment
board.
37. Interest on deposit of
post office & saving
bank account [section
s3rl
Any person
such payment.
t0% I his shall not
apply if the
total amount of
inrerest is paid
to such payee
or class gf
Payees as
specified by the
Board.
38. Kental value ot vacant
land or plant or
machinery [section
53Jl [rule lTBB]
I-he Government or
any authority,
corPoration or body
including its units, the
activities or any NGO,
any university or
medical college, dental
college, engineering
college, responsible for
Up to Tk. 15,000/- per
month----- Nil
From Tk. 15,001/- to Tk.
30,000/- per month 3%
More than Tk. 30,000/-
Per month --:--57"
r'---t
| 1481
tt7
@The lnstitute of Chartered Accountants of Bangladesh

st.
Head of
withholding
,Yithholding
authority
wathholding
rate/rates of tax Limitation
5t. Advertisement of
newspaper of
magazine or private
television channel
[section 53K]
I he bovernment or
corPoration body or
any comPany or any
banking company or
any insurance
comPany or any
cooPerative bank or
any NGO or any
university or medical
college or dental
college or engineering
college responsible for
40 Collection of tax from
sale of share at a
premium over face
value [section 531]
Securities & Exchange
Commission
3%
gollection of tax from
transfer of shares by
the sponsor
shareholders of a
company listed on
stock exchange
[section 53Ml
5ecurities & Exchange
Commission
42. urvroends lsection
s4I
I ne pflnctpat otticer of
a comPany
Resident/non-resident
Bangladesh company-----
-_-__-----__---20%
Resident/non-resident
Bangladesh person other
than company ----lO%
Non-resident (other
than Bangladeshi non-
resident) person orher a
company ---25%
43. Income from lottery
[section 55]
Any person
such payment
zo%
44. Income ol non-
residents [section 56]
Any Person
such paymen!
Non resident company
at the rare applicable to
a comPany
Non-resident non-
Bangladeshi person
other than a company---
-25%
Non-resident
Bangladeshi person at
the rate applicable to a
residenc

Taxation- | StudY Manual
!
i
t
i
7.7 Other lssues relating to TDS
Consequences of Failure to Deduct. etc: Sec 57
WhereaPersonrequiredbyorundertheprovisionsofthisChaptertodeduct,co||ectorpayto
the credii of the Governr"nt o", and in the cases mentioned in section 54, tfe principal officer
and the conlpany of which he is the principal officer, fails to Pay the tax in accordance with the
provisions of this Chapter, he or it shall -
(") without prejudice to any other consequ€nces to which he or it may be liable, be deemed
to be an assessee in default in respect of the tax; and
(b) in addition to such tax, pay an amount at the rate of two percent Per month of such tax
for the period commen.in! on the date following the exPiry of.the time within which it is
to be paid under section 5i and ending on rhe date of the actual payment of the tax.
Where the Deputy commissioner of Taxes in the course of any proceedings under the
ordinance finds any person, required by or under the provisions of this chapter to deduct'
collect or pay to the credit of the Government tax, who has failed to deduct' collect or Pay the
tax in accordance with the Provisions of this chapter, shall, notwithstanding the provisions of
section | 37, take necessary action for realisation of such tax alongwith the additional amount
payable under clause (b) of sub-section (l) from the Person deemed to be an assesssee in default
under clause (a) of that sub-section
Certificate of Deduction etc., of Tax: Sec 58
Every person who deducts or collects tax as required by the provisions of this chapter shall' at
the time of making any payment in relation to which tax has been deducted or collected' furnish
to the person to or from whom such Payment or collection has been made, a certificate to the
effect that the tax has been deducted or collected specifying therein-
a) the amount deducted or collected ;
b) the rate at which deduction or collection has been made ; and
c) such other Particulars as may be prescribed'
I
Payment to Government of Tax Deducted: Sec 59
All sums deducted or collected as tax under the provisions of this Chapter shall be paid within
the prescribed time by the person making the deduction or collection to the credit of the
Government or as the Board may direct'
ttnauttrorizea OeOuction P
save as provided in the ordinancer no Person shall charge, withhold, deduct or collect any sum'
directly or indirectly as tax and where any sum is so charged withhold, deducted or collected' it
shall be paid in the manner provided in section - 59'
The power to levy tax by deduction or collection under this chapter shall be without preiudice
to any other mode of recovery.
r--l
l1s0l
| ,J/
|
I

Credit of Tax Deducted or Collected at Source: Sec 52
Any deduction or collection of tax made and paid to the account of the Government in
accordance with the provisions of this Chapter shall be treated as a paymenr of tax on behalf of
the person from whose income the deduction or collection was made, or of the owner of the
security or of the shareholder, as the case may be, and credit shall be given to him therefor on
the production of the certificate furnished under section - 58 in the assessmeng if any made for
the following year under the Ordinance :
Provided that, if such person or such owner obtains, in accordance with the provisions of the
Ordinance, a refund of any ponion of the tax so deducted, no credit shall be given for the
amount of such refund :
Provided further that where such person or owner is a person whose income is included under the
provisions of section 43 (4) or (5) or section 104 or 105 or 106 in the total income of another
penon, such other person shall be deemed to be the person or owner on whose behalf payment
has been made and to whom credit shall be given in the assessmenr for the following year.
Procedure of Deduction or Collection of Tax at Source: Sec 62A
Tax payable in respect of income under this lT Ordinance 1984 and deductable under Chapter
Vll of the Ordinance shall be paid, deducted or collected at source in the manner and as per
specifications laid down in the Eighth Schedule of the Ordinance:
Provided that in case of discrepancy, if any, provisions of Chapter Vll of the Ordinhnce shall
prevail.
Payment of Tax where no Deduction is Made: Sec 53
The tax under the Ordinance shall be payable by the assessee direct-
in any case where tax has not been deducted or collected as required by, and in accordance
with, the provisions of this Chapter ;
in any case where the amount deducted or collected is found, after regular assessment, to
be less than the tax due from the assessee, to the extent of deficiency ; and
(c) in the case of income in respect to which no provision has been made for deduction or
collection of tax under the provisions of this Chapter.
Self-Assessment Questio ns:
l. Discuss the various types of income from which tax is required to be deducted or
collected at source under the provisions of the Income Tax Ordinance 1984.
3. State the provisions regarding information to be furnished to the Tax Authorities in connection
with payment 6f salary, interest, dividend, collection of tax from property, payment to non-
resident, and other sources under the provisions of the Income Tax Ordinance 1984.
(a)
o)

l
7.8
Requirement to Pay Advance Payment of Tax: Sec 64
(l) Except as provided in section 64(2), tax shall be payable by an assessee during each
financial year by way of advance payment of tax, hereinafter referred to as 'advance tax',
in accordance with the provisions hereafter made in this Chapter, if the total income of
the assessee for the latest income year in respect of which he has been assessed by way
of regular assessmeng or has been provisionally assessed under the Ordinance, or the
lncome- tax Act. 1922 exceeds Tk 4'00'000.
(2) Nothing in secrion 64(l) shall apply to any income classifiable under the heads
'Agricultural income' and 'Capital gains' excluding gain from transfer of share of a
company listed with a stock exchange.
Computation of Advance Tax: Sec 65
(l) The amount of advance tax payable by an assessee in a financial year shall be the amount
equal to the tax payable on his total income of the latest income year as assessed on
regular basis or provisionally, as the case may be, as reduced by the amount of tax
required to be deducted or collected at source in accordance with the preceding
provisions of this Chapter.
(2) The tax payable under section 65(l) shall be calculated at the rates in force in respect of
the financial year referred therein.
7. | 0 lnstallments of Advance Tax: Sec 56
Advance tax shall be payable in four equal installments on the fifteenth day of September,
December, March and June of the financial year for which the tax is payable. However, if before
the fifteenth day of May of the year, an assessment of the assessee is completed in respect of an
income year, later than that on the basis of which the tax was computed under section 65, the
assessee shall pay in one installment on the specified date or in equal installments on the
specified dates, if more than one falling after the date of the said assessment, the tax computed
on the revised basis as reduced by the amount, if any, paid in accordance with the original
computadon.
7. | | Estimate of Advance Ta* Sec 67
(l) Where, an assessee who is required to pay advance tax under section 64 estimates, at
any time before the last instalment is due, that the tax payable by him for the relevant
assessment year is likely to be less than the amount of tax as computed under section
65, he may, after giving to the Deputy commissioner of Taxes an estimace of the tax
payable by him, pay such estimated amount of advance tax, as reduced by the amount, if
any, already paid, in equal installments on the due dates of Payment under section 65.
The assessee may furnish a revised estimate of such amount at any time before any time
before any of such installments become payable and may thereby adiust any excess or
deficiency, by reference to the amount already paid by him under this section' in any
subsequent installment or installments payable in such financial year.
7.12 Advance Payment of Tax by new Assessees: Sec 68
Any person who has not previously been assessed by way of regular assessment under the
Ordinance or the lncome Tax Acq 1922, shall before the fifteenth day ofJune in each financial
year, if his toral income, subiect to section 64 (2), of the period which would be the income year
ior the immediately following assessment year is likely to exceed Tk 4,00,000, send to the
Deputy Commissioner of Taxes an esdmate of his total income and advance tax payable by him
7.9
(2)
[att,__F
@The lnstitute of Chartered Accountants of Bangladesh

7.t3
7.14
calculated in the manner laid down in section 65 and shall pay such amount on such dates
specified in section 66 as have not expired by instalments *hi.h ."y be revised according to
section 67(2).
Failure to Pay tnstalments of Advance Tax: Sec 59
Where, an assessee who is required to pay advance tax fails to pay any installment of such tax, as
originallycomputed or, as the case may be, estimated, on the due-date, he shalt be deemed to be
an assessee in default in respect of such installment.
Levy of Interest for Failure to pay Advance Tax: Sec 70
Where, in respect of an assessee who is required to pay advance tax, it is found in the course of
regular assessment that advance tax has not been paid in accordance with the provisions of this
Chapter, there shall be added' without prejudice io the consequences of rhe assessee being in
default under section 69. to the tax as determined on rhe basis of such assessment, simple
interest thereon calculated at the rate and for the period specified in section 73.
7. I 5 Credit of Advance Tax: Sec 7 t
Any sum, other than a penalty or interest, paid by or recovered from an assessee as advance tax,
shall be treated as a Payment of tax in respecr of the income of the period which would be the
income year for an assessment for the year next following the year in which it was payable and
shall be given credit for in the assessrhent of tax payabre b/the assessee.
7-16 tnterest Payable by Government on Excess payment of Advance Tax: s€c 72
(l) The Government shall pay simple interestat l0% per annum on the amount by which the
aggregate sum of advance tax paid during a linancial year exceeds the amount of tax payable by
him as determined on regular
"rr"rr."ni
(2) The period for which interest under section 72(l) shall be first day ofJuly ofthe year of
assessment to the date of regular assessment in respect of the income of'that year or a period of
rvvo years from the said first day ofJuly, whichever is shorter.
7 ''7 Interest Payable by the Assessee on Deficiency in payment of Advance Tax: Sec 73
(l) Where' in any financial year, an assessee has paid advance 12x on the basic of his own
estimate and the advance ax so paid together with the tax deducted at source, if any ,
under this Chapter is less than seventy_five per ceng of the amount of tax payable by
him as determined on regular assessment, the assessee shall pay, in addition to the
balance of tax payable by him, simple interest at lo% per amount on the amounr by
which the tax so paid and deduction falls short ol75% of the assessed rax.
(2) The period for which interest under section 73(l) shall be payable shall be the period
from the first day of April of the year in which the advance tix was paid to the date of
regular assessment in resPect of the income of that year or a period of wo ygars from
the said first day of July whichever is shorter.
(3) Notwitlrstanding anything contained in sections 73(l) and (2) _
(a) where tax is paid under secdon 74, or
(b) provisional assessment has been made under section 8l but regular assessment
has not been made, the simple interest shall be calculated in accordance with
the following provisions-
(D up to the date on which tax under-secrion 74 or provisionafiy assessed,
was paid;
t;rtt lt'

Taxation-l StudY Manual
lr;I{
il
r{l
,l!
(4)
(ii) thereafter, such simple interest shall be calculated on the amount by which
the tax so paid falls short of the said assessed tax'
Where,asaresultofappeal,revisionorreference'theamountonwhichinterestwas
payable under secrion 73(l) has been reduced, the amount of interest payable shall be
reduced accordingly and the excess interest paid, if any, shall be refunded toSether with
the amount of tax that is refundable'
Iluslratlsnsi
Worked ExamPle 'l
X Ltd's assessment for the assessment year 2007-2008 was completed at income of Tk' 300'000'
The company's Return for the assessment year 2008-09 showing income at Tk' 500.000 remains
pending. i, ah" .ornp"ny liable to pay advance tax in respect of the assessmenr year 2009- | 0?
Answer
since the company's larest assessment for the assessment year 2007-08 did not exceed Tk'
3OO,OOO, the company is not liable to Pay any advance tax in respect of the assessment year
2009- | 0.
Ulqked-ExamPlc:Z
M Ltd's assessmenr for the assessment year 2005-06 was completed showing income of Tk'
4OO,O0O on 16.09.06. The company's
"rr"rrt"n.
for the assessment year 2006-07 was completed
showing income of Tk. 500,000 on l5'h May 2007. Determine the amount of income on which
the coripany is liable for payment of advance tax for the assessment year 2007-08.
Answer
Although latest assessmenr was completed for the assessment year 2006-07' but the date of
.o*pli.ion was nor before l5'h May 2007 of the-income year. Hence the comPany should pay
advance tax based on the toral income Tk. 4OO,OOO for the assessment year 2005-06 to comply
with the legal Provision.
Worked ExamPle -3
Miami ftd's latest assessment was completed at Tk. 9OO,O0O for the assessment year 2006-07 on
22.08.06. The company estimates that its income for the year ending 31" December, 2006 would
be less than the previous year's income. suggest the way on what income- the company should
payadvancetaxforitsincomere|atingtotheyearending3l..December,2005l.
Answer
Thecompanycanestimateitsincomeforthisyearandpayadvancetaxonthebasisofsuch
income by sending estimates to the DePuty commissioner of Taxes. The company should take
precautio; so tha-t advance taxes paid do'not fall short of the 75 Percent of the tax demand
determined as Per assessment to avoid levy of simple interest u/s73'
Worked ExamPle'4
Z Ltd, anewly formed comPany has never been previously assessed' ls the company liable to pay
"iuan.u
tax for the assessment year 20 | 0- | | ?'
Answer
lf the company estimates that its total income is likely to exceed Tk. 300-000 during this income
year, the company is required to pay advance tax in one instalment on | 5'h June 20 | 0 by sending
an estimate of its total income to the DePuty Commissioner of Taxes'
Worked ExamPle -5
xYz Ltd., a tea company, whose income was determined at Tk. 500'000 for the assessment year
2oo9-lo. ls the compani is required to pay advance tax in resPect of the assessment year 2010-
lll
I
I
r-'l
1154i

Answer
A-tea company's 40% income is business and 60% income is agricultural under Rule 31. No
1lvance tax is payable on agricultural income. Since business income of'the tea company is Tk.
200'000 (40%), the company is not liable to pay advance tax for the assessmenr year ZOtO-l l.
Worked Example.6
A Ltd paid excess advance tax of Tk. 500,000 than the tax demand as per assessment completed
on 30.08.2008 for the assessment year 20l0- | l.
B Ltd's short fall in payment of advance tax amounted to Tk. 500,000 as per assessment
completed on 30.08.2008 for the assessmenr year 20lO- | l.
Calculate the interest allowable and simple interest payable u/s 72 and 73 respectively.
Answer
Although both the assessments were completed on the same date and rate of interest is also
same ( I 0%), there is a difference in the calculation of interesq which is shown below:
a) lnterest allowable by the Govt. uls 72 = | 0% on Tk. 5O0,OOO from 0 1.07.08 to 30.08.08
=Tk 6,667
b) Simple interest payable to the Govc uls73 =107. on Tk. 500,000 from 01.07.07 to 30.08.08
=Tk 46,667
From the above examples, it is evident that there is a clear discrimination in allowing interest
payable by the government and simple interest chargeable by the Government. Because interest
is allowed from | 't July of the assessment year while simple interesr is charged from ll July of the
income year.
It is to be noted that if on appeal, a revised assessment is made and consequently tax demand is
reduced, fresh calculation of interest is required to be made.
Note:
Regarding charge of simple interest u/s 70 and 73 students should note thar assessees paying
advance tax on the basis of latest assessed income satislies the condition of payment of advance
tax- Those assesses who pay advance tax on the basis of estimates and if the advance tax
Payment is less than 75% of the tax demand, then simple interesr is payable on the difference
between tax demand and advance taxes paid.
7. | 8 Payment of Tax on the Basis of Return [See 74]
Every person who is required to file a return u/s 75, 77, 78, 89(21,9 | (3), or 93( | ) shall pay rhe
amount of tax payable on the basis of such return as reduced by the amount of any tax aeauctea
from his income u/s 48 and 64 on or before the return filed.
A person who without reasonable cause hils to pay tax as required under this section, shall be
deemed to be an assessee in default.
Self-Assessment Questio
l. Discuss briefly the provisions of the Income Tax Ordinance I 984 with regard to the following
G) The assessees who are required to make advance paymenc of tax and the nature of
incomes which are to be left out of consideration for this purpose;
(b) The basis on which advance payments of tax should be calculated for old assessees and
new assessees, and the due dates of payment thereof;
(c) The interest payable by Government on excess payment and interest chargeable to
assessee on shortfall, in respect of advance payment of ax.
9The Institute of Chanered Accounants of Bangladesh

Chapter 8
Return and Statement
lntroduction
Examination context
Topic List
T-ii::*:iT16rt'tur;i1t;;;;.,-" ---":-- " - -,
,
8.2 ; Form of submission of return of income :
i
6 f i siCniiuie ana v;iific;tiil;f return - i
g.4 - Ouediteoistiumisslonof returnof inioniltai--
i
fTs-f o6iffi ilfi; ue suffi ift ed ;lde" *ftffi tre ;etiffi if iiloffi
*- " * **-.*__-----___- -
I
, 8.9 i Statement of assets

07. payment of tax before assessment ICAB, KL, Study Manual

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07. payment of tax before assessment ICAB, KL, Study Manual