Bangladesh Income Tax Overview

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Questions and Answers

What is the total income computed for Mr. Rahman as a resident?

Tk. 150,000

Tk. 250,000

Tk. 180,000

Tk. 360,000 (correct)

Which of the following income sources is NOT taxable for Mr. Rahman?

Profits from business in Chittagong

Property income in South Africa

Agricultural income in Bhutan (correct)

Income from employment in Afghanistan

How much is the property income from South Africa that is included in Mr. Rahman’s total income as a resident?

Tk. 60,000

Tk. 180,000

Tk. 150,000

Tk. 90,000 (correct)

What is the total income computed for Mr. Rahman as a non-resident?

Tk. 250,000 Signup and view all the answers

Which income source is considered to have accrued in Bangladesh, even if received in another country?

Business profits in Chittagong Signup and view all the answers

What is the exempted amount from taxation for the rent from property received in Canada?

Tk. 60,000 Signup and view all the answers

Which income type is classified as 'non-taxable' according to the details provided?

Gift received during the year Signup and view all the answers

How much total income is considered for taxation purposes when Mr. Rahman is classified as a non-resident?

Tk. 250,000 Signup and view all the answers

What is Mr. Jashim Uddin's total number of days he stayed in Bangladesh during the income year 2021-22?

172 days Signup and view all the answers

How many total days did Mr. Jashim Uddin stay in Bangladesh in the previous four years before the income year 2021-22?

1,146 days Signup and view all the answers

Which condition does Mr. Jayed fulfill to be considered a resident for the income year 2021-22?

He stayed for 110 days in that year. Signup and view all the answers

If Mr. Jayed had stayed for 85 days in 2021-22, what would his residential status be?

Non-resident Signup and view all the answers

What is the tax rate on dividend income received by a company from another company registered under Company Act 1994?

20% Signup and view all the answers

What would Mr. Jayed's residential status be if he had stayed for 185 days in 2021-22 but only total 360 days over the last four years?

Non-resident Signup and view all the answers

In which year did Mr. Jashim Uddin not come back to Bangladesh?

2021 Signup and view all the answers

What is the tax rate applicable to non-resident foreigners on their income?

30% Signup and view all the answers

For the income year 2021-22, what is the minimum number of days Mr. Jayed needed to stay in Bangladesh to be considered a resident?

90 days Signup and view all the answers

Which of the following is NOT considered taxable income for an individual?

Inherited wealth Signup and view all the answers

What is the total number of days Mr. Jayed stayed in Bangladesh during the four years leading up to 2021-22?

531 days Signup and view all the answers

What tax rate applies to winnings from online games or similar activities?

25% Signup and view all the answers

Which schedule of the Income Tax Act, 2023 specifically addresses tax exemptions, rebates, and credits?

Sixth Schedule Signup and view all the answers

What is the tax rate on income from capital gains for companies?

15% Signup and view all the answers

What is the primary objective of income taxation as highlighted in the content?

To raise public revenue for government expenditure Signup and view all the answers

At which rate are partnerships taxed on their share income?

Normal slab rate Signup and view all the answers

Which schedule deals with the computation of profits and gains from mineral deposits?

Fifth Schedule Signup and view all the answers

What tax rate is imposed on dividends remitted outside Bangladesh by a foreign company, if there is a Double Taxation Avoidance Agreement with Bangladesh?

10% Signup and view all the answers

What percentage of total tax revenue in Bangladesh is accounted for by income tax?

35% Signup and view all the answers

What tax is levied on capital assets sold after 5 years of acquisition?

15% Signup and view all the answers

Which set of rules has replaced certain provisions in the IT Rules, 1984 concerning tax deduction?

Rules of Tax Deducted at Source, 2023 Signup and view all the answers

What is the significance of a progressive income tax system?

It assists in reducing income and wealth inequality. Signup and view all the answers

Which schedule outlines the computation of profits and gains of the insurance business?

Fourth Schedule Signup and view all the answers

Which entity has the flexibility to amend rules in the Income Tax framework?

National Board of Revenue Signup and view all the answers

What is the duration of an assessment year as defined in the ITA, 2023?

Twelve months starting from July 1 Signup and view all the answers

In the case of banks, when does the income year end for determining the assessment year?

December 31 of the previous year Signup and view all the answers

Under what condition may the assessment year and income year be the same?

When a business is discontinued Signup and view all the answers

What happens to the total income of an individual leaving Bangladesh as per section 193?

It is charged to tax in the current assessment year Signup and view all the answers

What type of income can be taxed in the year it is earned for non-resident companies?

Income from shipping and airline operations Signup and view all the answers

How does the ITA, 2023 define the term 'assessment year'?

The year in which the prior year's income is assessed Signup and view all the answers

Which of the following statements about the assessment year is incorrect?

It is always the same as the income year. Signup and view all the answers

When can income from a discontinued business be taxed according to section 191?

In the assessment year of discontinuance Signup and view all the answers

Study Notes

Bangladesh Income Tax Information

Individuals are subject to tax on income from employment, rent, agriculture, business, capital gains, financial property, and other sources
Income from employment received in Bangladesh for services rendered outside of Bangladesh is taxable
Income from a profession that accrues in Bangladesh is taxable even if received outside of Bangladesh
Income from agricultural activities carried out outside of Bangladesh is taxable if it is remitted to Bangladesh
The income of a partnership firm is calculated at the normal slab rate
The share of income from a partnership firm is added to each partner's personal income
Companies are separate from their owners (shareholders) and managers (directors)
The current financial year is known as the income year, and the immediately preceding year is the assessment year

Residential Status

If a person remains in Bangladesh for at least 90 days during the income year and at least 365 days in the previous four years, they are considered a resident for tax purposes
A person who is outside Bangladesh for an employment contract for at least two years is considered a non-resident
A person staying in Bangladesh for more than 182 days in the income year and 365 days in the previous four years is considered a resident for tax purposes

Tax Rates & Assessment Year

The assessment year begins on July 1st of each year and includes any deemed assessment year under the Income Tax Act
The income year is the period in which income is earned
The assessment year generally follows the income year
Income from a discontinued business is taxed in the assessment year in which the business is discontinued
The income of individuals leaving Bangladesh is taxed in the assessment year that includes the date of departure
Non-resident shipping companies and airlines are taxed in the year they earn income in Bangladesh, provided they lack representatives in Bangladesh
The tax rate for companies is 27.5% subject to certain conditions
Trust, Funds, Associations of Persons (AoP), and other taxable entities are taxed at a 27.5% rate
The tax rate on dividends for the assessment year 2023-24 is 20% for companies receiving dividends from a company registered under the Company Act 1994 or a foreign company remitting profits outside of Bangladesh
Companies receiving dividends from a foreign company with a Double Taxation Avoidance Agreement with Bangladesh have a tax rate of 10%-15%
Resident and non-resident Bangladeshi individuals, firms, and other taxpayers pay normal slab rates on dividends
Non-resident foreigner individuals pay a 30% tax rate on dividends
The tax rate for non-resident foreigners is a flat 30%
The tax rate on income from capital gains is 15% for companies, and for other taxpayers, it is dependent on whether the sale of capital assets occurs within five years of acquisition (regular slab rate) or after five years (15% tax rate)
Winning from lotteries, puzzles, card games, online games, or similar games is taxed at a 25% rate

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Description

Test your knowledge on income tax information in Bangladesh. This quiz covers taxation rules for individuals, partnership firms, and corporate structures. Understand how income is taxed based on residency and sources to excel in this crucial area of financial literacy.