Income Tax at a Glance

Among direct taxes, income tax is one of the main sources of revenue. It is a progressive tax system. Income tax is imposed on
the basis of ability to pay. The more a taxpayer earns the more he should pay''- is the basic principle of charging income tax. It
aims at ensuring equity and social justice.

Income Tax Authorities:

Income Tax Authorities are :-

 National Board of Revenue,

 Director-General of Inspection (Tax),
 Commissioner of Taxes (Appeals),
 Commissioner of Taxes, Large Taxpayers' Unit (LTU),
 Director General (Training),
 Director General, Central Intelligence Cell (CIC),
 Commissioner of Taxes,
 Additional Commissioner of Taxes (Appeal/Inspecting),
 Joint Commissioner of Taxes(Appeal/Inspecting ),
 Deputy Commissioner of Taxes,
 Tax Recovery Officers,
 Assistant Commissioner of Taxes,
 Extra Assistant Commissioner of Taxes,
 Inspectors of Taxes.

Sources of Income:
For the purpose of computation of total income and charging tax thereon, sources of income can be classified into 7 categories,
which are as follows :
 Salaries
 Interest on securities
 Income from house property
 Income from agriculture
 Income from business or profession
 Capital gains
 Income from other sources.

Tax Rate (Assessment Year- 2010-2011) :

Other than Company :

For individuals (other than female taxpayers, senior taxpayers of 65 years and above and retarded taxpayers), tax payable for the

First 1,65,000/- Nil

Next 2,75,000/- 10%
Next 3,25,000/- 15%
Next 3,75,000/- 20%
Rest Amount 25%
For female taxpayers, senior taxpayers of age 65 years and above, tax payable for the

First 1,80,000/- Nil

Next 2,75,000/- 10%
Next 3,25,000/- 15%
Next 3,75,000/- 20%
Rest Amount 25%

For retarded taxpayers, tax payable for the

First 2,00,000/- Nil

Next 2,75,000/- 10%
Next 3,25,000/- 15%
Next 3,75,000/- 20%
Rest Amount 25%

Minimum tax for any individual assessee is Tk. 2,000

Non-resident Individual 25%

(other than non-resident Bangladeshi)

On Dividend income 20%

For Companies

Publicly Traded Company 27.5%

Non-publicly Traded Company 37.5%

Bank, Insurance & Financial Company 42.5%

Mobile Phone Operator Company 45%

Publicly Traded Mobile Operator Company 35%

If any publicly traded company (excluding Mobile Operator Company) declares more than 20% dividend, 10% rebate on total
tax allowed.

Tax Rebate for investment :

Rate of Rebate:

Amount of allowable investment is either actual investment in a year or up to 25% of total income or Tk. 10,00,000/-
whichever is less. Tax rebate amounts to 10% of allowable investment.

Types of investment qualified for the tax rebate are :-

 Life insurance premium ,

 Contribution to deferred annuity ,
 Contribution to Provident Fund to which Provident Fund Act, 1925 applies ,
 Self contribution and employer's contribution to Recognized Provident Fund ,
 Contribution to Super Annuation Fund ,
 Investment in approved debenture or debenture stock, Stocks or Shares ,
 Contribution to deposit pension scheme approved by the government,
 Contribution to Benevolent Fund and Group Insurance premium ,
  Contribution to Zakat Fund ,
 Donation to charitable hospital approved by National Board of Revenue ,
 Donation to philanthropic or educational institution approved by the Government ,
 Donation to socio-economic or cultural development institution established in Bangladesh by Aga Khan
Development Network ,
 Donation to ICDDR,B, Dhaka Community Hospital,
 Donation to philanthropic institution- CRP, Savar, Dhaka,
 Donation upto five lac to (1) Shishu Swasthya Foundation Hospital Mirpur, Shishu Hospital, Jessore and Hospital for
Sick Children, Satkhira run by Shishu Swasthya Foundation, Dhaka, (2) Diganta Memorial Cancer Hospital, Dhaka,
(3) The ENT and Head-Neck Cancer Foundation of Bangladesh, Dhaka; and (4) Jatiya Protibandhi Unnayan
Foundation, Mirpur, Dhaka;
 Asiatic Society of Bangladesh;
 Muktijudha Jadughar;

Who should submit Income Tax Return ?

 If total income of any individual (other than female taxpayers, senior taxpayers of 65 years and above and retarded
taxpayers) during the income year exceeds Tk 1,65,000/-.
 If total income of any female taxpayer, senior taxpayer of 65 years during the income year exceeds Tk 1,80,000/-
 If total income of any retarded taxpayer during the income year exceeds Tk 2,00,000/-.
 If any person was assessed for tax during any of the 3 years immediately preceding the income year.
 A person who lives in any city corporation/paurashava/divisional HQ/district HQ and owns a building of more than
one storied and having plinth area exceeding 1,600 sq. feet/owns motor car/owns membership of a club registered
under VAT Law.
 If any person subscribes a telephone.
 If any person runs a business or profession having trade license and operates a bank account.
 Any professional registered as doctor, lawyer, income tax practitioner, Chartered Accountant, Cost & Management
Accountant, Engineer, Architect and Surveyor etc.
 Member of a Chamber of Commerce and Industries or a trade Association.
 Any person who participates in a tender.
 A person who has a Taxpayer's Identification Number (TIN).
 Candidate for Union Parishad, Paurashava, City Corporation or Parliament elections.
 Any company registered under Companies Act, 1930 or ‡Kv¤• vbx AvBb, 1994

Time to Submit Income Tax Return:

For Company
By fifteenth day of July next following the income year or, where the fifteenth day of July falls before the expiry of six months
from the end of the income year, before the expiry of such six months.

For Other than Company

Unless the date is extended, by the thirtieth day of September next following the income year.

Consequences of Non-Submission of Return

 imposition of penalty amounting to 10% of tax on last assessed income subject to a minimum of Tk. 1,000/-
 In case of a continuing default a further penalty of Tk. 50/- for every day of delay.

Assessment Procedures :

 For a return submitted under normal scheme, assessment is made after hearing.
 For returns submitted under Universal Self Assessment Scheme, the acknowledgement slip is determined to be an
assessment order. Return filed under Universal Self Assessment is of course subject to audit.
Appeal against the order of DCT :
A taxpayer can file an appeal against DCT's order to the Commissioner (Appeals)/Additional or Joint Commissioner of Taxes
(Appeals), to the Taxes Appellate Tribunal against an Appeal order and to Commissioner of Taxes of the respective taxes Zone
for the revision of DCT's order.

Tax withholding functions :

In Bangladesh withholding taxes are usually termed as Tax deduction and collected at source. Under this system both private
and public limited companies or any other organization specified by law are legally authorized and bound to withhold taxes at
some point of making payment and to deposit the same to the Government Exchequer. The taxpayer receives a certificate from
the withholding authority and gets credits of tax against assessed tax on the basis of such certificate.

Heads of Income Subject to deduction or collection of income tax

at source with specified rates of deduction.

Table

Sl Head of Withholding authority Withholding rate/ rates of tax Limitation

withholding
1. Salaries [section-50] Any person responsible Average of the rates applicable
for making such to the estimated total income of
payment. the payee under this head.
2. Discount on the real Any person responsible Maximum rate
value of Bangladesh for making such
Bank bills. [section- payment.
50A]
3. Interest on securities Any person responsible 10% This shall not apply to the Treasury
[section-51] for issuing any security 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 Any person responsible Upto Tk. 2,00,000/--Nil.
contractors & sub- for making such
contractors [section- payment. From 2,00,001 to Tk 5,00,000/-
52] [rule-16] ------------1%

From 5,00,001 to Tk.

15,00,000/- ------- 2..5%
From 15,00,001 to Tk.
25,00,000/- ------- 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 -- Nil

where the
payment exceeds Tk 2,00,000 --
------ 0.75%
5. Payment on Any person responsible on indenting commission -------
indenting for making such ----------------7.5%
commission or payment.
shipping agency on shipping agency commission
commission. ---------5%
[section-52, rule-17]
6. Fees for Doctors The principal officer of 10%
[section-52A(1)] a company or the chief
executive of any NGO
or trust responsible for
 making such payment.
7. Royalty or technical The government or any 10%
know-how fee other authority,
[section-52A(2)] 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 for professional Do 10% Person certified by NBR having
of technical services non assessable income or person
[section-52A(3)] having income exempted from tax
9. Payment of certain The government or any 10%
services like other authority,
stevedoring agency, corporation or body or
private security any company or any
service banking company or any
[section-52AA] 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.
10. Clearing and Commissioner of 10%
forwarding agents Customs.
[section 52AAA]
11. Cigarettes Any person responsible 6% of the value of the banderols
manufacturing for selling banderols to
[section 52B] any manufacturer of
cigarettes.
12. Compensation Any person responsible (a). 2% of the amount of such
against acquisition for payment of such compensation against the
of property [section compensation immovable property situated
52C] within City Corporation,
Paurashava or Cantonment
Board
(b). 1% of the amount of such
compensation against the
immovable property situated
outside the jurisdiction of
City Corporation,
Paurashava or Cantonment
Board
13. Interest on saving Any person responsible 10% No deduction to be made if the
instruments [section for making such saving instrument is purchased by
52D] payment any approved superannuation fund
or pension fund of gratuity fund or
any recognized provident fund or
any workers' profit participation
fund.

No tax to be deducted from interest

of Pensioner Sanchayapatra and
Paribar Sanchayapatra.
14. Brick Any person responsible Tk.30,000/- for one section
Manufacturer for issuing any brick field.
[section 52F] permission or renewal
of permission for Tk. 45,000/- for two section
manufacture of bricks. brick field.

Tk. 60,000/- for three section

brick field.
15. Commission of letter Any person responsible 5%
of credit [section for opening letter of
 52I] credit.
16. Renewal of trade City Corporation or Tk. 500/- for each trade license.
license by City Paurashava.
Corporation or
Paurashava [section
52K]
17. Freight forward Any person responsible 15%
agency commission for making such
[section 52M] payment.
18. Rental Power Bangladesh Power 4%
Company Development Board
[section 52N] during payment to any
power generation
company against power
purchase within three
years from its
commencement.
19. Foreign technician Employer. 5% This rate is for 3 years from the
serving in diamond appointment of such foreign
cutting industries technician and appointment to be
[section 52O] completed by 30 June 2010.
20. Importer [section The Commissioner of 5% Tax at source will not be withheld
53] Customs. for items prescribed in rule 17A.
21. House property The Government or any Up to Tk. 20,000/- This does not apply if the owner of
[section 53A] [rule authority, corporation per month [p. m] ---- Nil house property is given a certificate
17B] or body or any by the DCT regarding not having
company or any From Tk 20,001/- to Tk. any assessable income during the
banking company or 40,000/- p.m. -------3% year or is having income otherwise
any co-operative bank exempted from payment of income
or any NGO run or More than Tk 40,000/- p.m.--- tax.
supported by any 5%
foreign donation or any
university or medical
college or dental
college or engineering
college as tenant.
22. Shipping business of Commissioner of 5% of total freight received or
a resident [section Customs or any other receivable in or out of
53AA] authority duly Bangladesh.
authorised.
3% of total freight received or
receivable from services
rendered between two or more
foreign countries.
23. Export of manpower The Director General, 10%
[section 53B, rule- Bureau of Manpower,
17C] Employment and
Training.
24. Export of Knit-wear Bank. 0.50% of the total export No deduction or deduction at a
and woven proceeds. reduced rate to be made if an
garments, terry exporter produces certificate from
towel, jute goods, NBR regarding having fully or
frozen food, partly exempted income.
vegetables, leather
goods, packed food
[section 53BB]
25. Member of Stock The Chief Executive 0.05%
Exchanges [section Officer of stock
53BBB] exchange.
26. Export or any goods Bank. 0.50% of the total export No deduction or deduction at a
except knit-wear proceeds. reduced rate to be made if an
and woven exporter produces certificate from
garments, terry NBR regarding having fully or
towel, jute goods , partly exempted income.
frozen food,
vegetables, leather
goods, packed food
[section 53BBBB]
27. Goods or property Any person making 5% of sale price.
 sold by public sale.
auction [section53C]
[rule 17D]
28. Courier business of a Any person being a 15% on the amount of service
non-resident [section company working as charge accrued.
53CC] local agent of a non-
resident courier
company.
29. Payment to actors The person producing 5% Payment needs to exceed thirty six
and actresses the film. thousand taka in the aggregate in
[section 53D] [rule any income year.
17E]
30. Commission, Any person being a 7.5%
discount or fees corporation, body
[section 53E] including a company
making such payment.
31. Commission or Bank. 7.5%
remuneration paid to
agent of foreign
buyer
[section 53EE]
32. Interest on saving Any person responsible 10% This shall not apply on the amount
deposits and fixed for making such of interest or share of profit arising
deposits payment. out of any deposit pension scheme
[section 53F] sponsored by the government or by
a schedule bank with prior approval
of the Government.
33. Real estate or land Any person responsible In case of Building/Apartment:
development for registering any (i) Tk. 2,000 per square meter for
business document for transfer building or apartment
[section 53FF] of any land or building situated at Gulshan Model
or apartment. Town, Banani, Baridhara,
Defense Officers Housing
Society (DOHS),
Dhanmondi Residential
Area, Lalmatia Housing
Society, Uttara Model
Town, Bashundhara
Residential Area, Dhaka
Cantonment Area, Motijeel
Commercial Area, Dilkusha
Commercial Area, Karwan
Bazar Commercial Area of
Dhaka and Khulshi
Residential Area,
Panchlaish Residential
Area and Agrabad of
Chittagong;

(ii) Tk. 800 per square meter

where the building or
apartment is situated in
areas other than areas
mentioned in sub-clause (i)

In case of Land:

2% of deed value in case of

property situated in any city
corporation, paurashava or
cantonment board.

1% of deed value in case of

property situated in places other
than any city corporation,
paurashava or cantonment board.
34. Insurance Any person responsible 5%
commission for paying such
 [section 53G] commission to a
resident.
35. Fees of surveyors of Any person responsible 15%
general insurance for paying such fees to
company resident
[section 53GG]
36. Transfer of property Any person responsible 2% of deed value in case of This shall not apply to sale by a
[section 53H] for registering any property situated in any city bank or a financial institution as a
document of a person. corporation, paurashava or mortgagee empowered to sell;
cantonment board. mortgagee of any property to the
BHBFC; mortgagee to any bank of
1% of deed value in case of any property; transfer of any
property situated in areas other agricultural land in Bangladesh
than any city corporation, except land situated in any area
paurashava or cantonment mentioned in paragraph [i] or [ii],
board. of sub-clause [c] or clause [15] of
section 2;
37. Interest on deposit of Any person responsible 10% This shall not apply if the total
post office & saving for making such amount of interest is paid to such
bank account payment. payee or class of payees as
[section 53I] specified by the Board.
38. Rental value of The Government or any Up to Tk. 15,000/- per month --
vacant land or plant authority, corporation -------------Nil.
or machinery or body including its
[section 53J] [rule units, the activities or From Tk 15,001/- to Tk
17BB] any NGO, any 30,000/- per month –3%
university or medical
college, dental college, More than Tk. 30,000/- per
engineering college month ----------5%
responsible for making
such payment.
39. Advertisement of The Government or any 3%.
newspaper or other authority,
magazine or private corporation or body or
television channel any company or any
[section 53K] 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
making such payment.
40. Collection of tax Securities & Exchange 3%
from sale of share at Commission
a premium over face
value [section 53L]
41. Collection of tax Securities & Exchange 5%
from transfer of Commission/Stock
shares by the Exchange
sponsor shareholders
or placement holders
of a company listed
on stock exchange
[section 53M]
42. Dividends The principal officer of Resident/ non-resident If the DCT certifies, deduction in
[section 54] a company. Bangladeshi company ----- 20% this regard may not be made or
made at a rate less than the
Resident/ non-resident maximum rate.
Bangladeshi person other than
company -----10%

Non-resident (other than

Bangladeshi non-resident)
person other than a company---
25%.
43. Income from lottery Any person responsible 20%
[section 55] for making such
 payment.
44. Income of non Any person responsible Non resident company at the
residents for making such rate applicable to a company.
[section 56] payment.
Non-resident non-Bangladeshi
person other than a company ---
25%

Non-resident Bangladeshi
person at the rate applicable to a
resident.

Major areas for final settlement of tax liability :

Tax deducted at source for the following cases is treated as final discharge of tax liabilities. No additional tax is charged or
refund is allowed in the following cases:-

 Supply or contract work

 Band rolls of hand made cigarettes
 Import of goods
 Transfer of properties
 Export of manpower
 Real Estate Business
 Export value of certain items including knit and woven garments.
 Local shipping business
 Royalty, technical know-how fee
 Insurance agent commission
 Auction purchase
 Payment on account of survey by surveyor of a general insurance company
 Clearing & forwarding agency commission
 Transaction by a member of a Stock Exchange
 Courier business
 Compensation against acquisition of property
 Premium value over face value of a share
 Income from transfer of securities of a sponsor shareholder.
 Winning lotteries.

Tax Recovery System :

In case of non-payment of income tax demand the following measures can be taken against a taxpayer for realization of tax:-

 Imposition of penalty,
 Attachment of bank accounts, salary or any other payment,
 Filing of Certificate case to the Special Magistrate.

Advance Payment of Tax :

Every taxpayer is required to pay advance tax in four equal installments falling on 15th September; 15th December; 15th March
and 15th June of each year if the latest assessed income exceeds Taka four lakh. Penalty and interest are imposed for default in
payment of any installment of advance tax.

Fiscal incentives :

Following are fiscal incentives available to a taxpayer:-

a) Tax holiday : Tax holiday is allowed for industrial undertaking, tourist industry and physical infrastructure facility
established between 1st July 2008 to 30th June 2011 in fulfillment of certain conditions.

Industrial Undertaking Eligible for Tax holiday :

(i) An industry engaged in production of textile, textile machinery, jute goods, high value garments, pharmaceuticals,
melamine, plastic products, ceramics, sanitary ware, steel from iron ore, MS Rod, CI Sheet, fertilizer, insecticide & pesticide,
computer hardware, petro-chemicals, agriculture machinery, boilers, compressors, basic raw materials of drugs, chemicals and
pharmaceuticals, energy savings bulb, solar energy panel, barrier contraceptive or rubber latex.
 (ii) An industry engaged in agro-processing, ship building, diamond cutting.
Physical Infrastructure Eligible for Tax holiday:
Sea or river port, container terminals, internal container depot, container freight station, LNG terminal and transmission
line, CNG terminal and transmission line, gas pipe line, flyover, mono rail, underground rail, telecommunication other than
mobile phone, large water treatment plant & supply through pipe line, waste treatment plant, solar energy plant, export
processing zone.
Tourism Industry Eligible for Tax holiday :
Residential hotel having facility of three star or more.
b) Accelerated depreciation: Accelerated depreciation on cost of machinery is admissible for new industrial undertaking in
the first year of commercial production 50%, in the second year 30% and in the third year 20%.
c) Income derived from any Small and Medium Enterprise (SME) engaged in production of any goods and having an annual
turnover of not more than taka twenty four lakh is exempt from tax.
d) Industry set up in EPZ is exempt from tax for a period of 10 years from the date of commencement of commercial
production.
e) Income from fishery (excluding income of a company), poultry, cattle breeding, dairy farming, horticulture, floriculture,
mushroom cultivation and sericulture are exempt from tax up to 30th June, 2011, subject to investing at least 10% of the
exempted income that exceeds one lakh Taka, in government securities or bonds.
f) Income derived from export of handicrafts is exempted from tax up to 30th June, 2011.
g) An amount equal to 50% of the income derived from export business is exempted from tax.
h) Listed companies are entitled to 10% tax rebate if they declare dividend of 20% or more.
i) Income from Information Technology Enabled Services (ITES) business is exempted up to 30th June, 2011.
(j) Income of a private power generation company subject to to certain conditions included in fulfill conditions lies with
private sector power generation policy of Bangladesh is exempted from tax for 15 years form the day of commencement of
commercial production.

Avoidance of Double Taxation Agreement :

There are agreements on avoidance of double taxation between Bangladesh and 28 countries which are:-

(1) United Kingdom of Great Britain and Northern Ireland, (2) Singapore (3) Sweden (4) Republic of Korea (5) Canada (6)
Pakistan (7) Romania (8) Sri Lanka (9) France (10) Malaysia (11) Japan (12) India (13) Germany (14) The Netherlands (15)
Italy (16) Denmark (17) China (18) Belgium (19) Thailand (20) Poland (21) Philippines (22) Vietnam (23) Turkey (24)
Norway (25) USA (26) Indonesia (27) Switzerland (28)
 List of the Commissioner's/DG's (Income Tax Wing)

Sl. Name of the Name of the Phone No. Fax No. E-mail
No. Office Officer
(1) (2) (3) (4) (5) (6)
1. Commissioner Mr. M. A Quader 8362944
Taxes Zone-1, Dhaka Sarker 8333855
(PA)
2. Commissioner Ms. Rahela 831 2416
Taxes Zone-2, Dhaka Chowdhury
3. Commissioner Mr. Md Sirajul Islam 831 2402
Taxes Zone-3, Dhaka
4. Commissioner Mr. Md. Mahbabur 933 6788
Taxes Zone-4, Dhaka Rahman
5. Commissioner Mr. Md. Rustam Ali 934 6364
Taxes Zone-5, Dhaka Molla
6. Commissioner Pervez Iabal 831 6049
Taxes Zone-6, Dhaka
7. Commissioner Mr. Syed Md. 835 0603
Taxes Zone-7, Dhaka Mahbubur Rahman
8. Commissioner Mr. Kalipada Halder 934 0075
Taxes Zone-8, Dhaka
9. Commissioner Mr. Md. Abdur Razzak 831 2472
Large Taxpayer's Unit
(LTU)
10. Commissioner Mr. Sanjit Kumar 717 4224
Central Survey Zone, Biswas
Dhaka
11. Commissioner Mr. Ramendra 031-715190
Taxes Zone-1, Chandra Basak
Chittagong
12. Commissioner Mr. Md. Habibur 031-710840
Taxes Zone-2, Rahman Akhand
Chittagong
13. Commissioner Mr. Sultan Mahmud 031-725897
Taxes Zone-3,
Chittagong
14. Commissioner Mrs. Rokeya Khatun 0721-
Taxes Zone-Rajshahi 812320
15. Commissioner Mr. Md. Nurul Alam 041-760669
Taxes Zone-Khulna
16. Commissioner Mr. Mir Mushtaq Ali 933 7533
Taxes Appeal Zone-1,
Dhaka
17. Commissioner Mrs. Rowshan Ara 833-3116
Taxes Appeal Zone-2,
Dhaka
18. Commissioner Mr. Liakat Ali Khan 833 3116
Taxes Appeal Zone-3,
Dhaka
19. Commissioner Mr. Haidar Khan 031-714217
Taxes Appeal Zone-
Chittagong
20. Commissioner Mr. Chinmoy Proshun 041-760349
 Taxes Appeal Zone- Biswas
Khulna
21. Director General Mr. Md. Alauddin 833 1011
Central Intelligence Cell
22. Director General Mr. Kanon Kumar Roy 835 9444
Tax Inspection, Dhaka
23. Director General Mr. Md. Meftahuddin 933 3520
Tax Training Academy Khan
24. Commissioner Mr. Balal Uddin 0521-61772
Taxes Zone-Rangpur
25. Commissioner Mr. Radhesam Roy 0431-72202
Taxes Zone-Barisal
26. Commissioner Mr. M.A Jabbar 0821-
Taxes Zone-Sylhet 716403