Presented by

Hadee Lutful & Co.

Chartered Accountants
Date: 01 July 2020
• This brochure has been prepared on the basis of information/data available for
public on various websites and portals.

• This summary only provides an insights of the changes brought in through the
Finance Act, 2020, SROs and orders.

• If anything of this summary contradicts with the Finance Act, 2020, SROs and orders,
the latter shall prevail.

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 Reduction in corporate taxes rate for private company
 Increase in the tax-free income limit for individuals
 Reduction in individual tax rate
 New scope for disclosure of undisclosed property and investment in securities
 Extra tax charged on difference of investment, import & export made
 Increase in car tax
 Amendment to section 30
 New provisions for gains from the transfer of business or undertaking
 Change in TDS rate for export proceeds
 TDS on local L/C opened for purchase of rice, wheat, potato, onion, garlic, computer & accessories, etc.
 Minimum tax on gross receipt for individual assessee
 Amendment to provisions regarding exemption of pension and gratuity fund
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 Assessee with
marginal or
maximum income will
be benefited

Previous Slab (AY 2019-2020) New Slab (AY 2020-2021)

First Tk. 250,000 - For Male First Tk. 3,00,000 –For Male
First Tk. 300,000 - For Female and Individuals : First Tk. 350,000 - For Female and Individuals : Aged 65+
Aged 65+ years years
Nil Nil
First Tk. 4,00,000 - For disabled individuals First Tk. 4,50,000 - For disabled individuals

First Tk. 4,25,000 – For War-wounded gazetted First Tk. 4,75,000 – For War-wounded gazetted freedom
freedom fighters fighters
Next Tk. 4,00,000 10% Next Tk. 1,00,000 5%
Next Tk. 5,00,000 15% Next Tk. 3,00,000 10%
Next Tk. 600,000 20% Next Tk. 4,00,000 15%
Next Tk. 30,00,000 25% Next Tk. 5,00,000 20%
Balance Income 30% Balance Income 25%
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 Location of Taxpayers Minimum Tax
Dhaka (both South & North) and Chittagong City Corporation Tk. 5,000/-
All other City Corporation Tk. 4,000/-
All other areas/places Tk. 3,000/-

Rate on Net tax Minimum

Range of Net Wealth
liability Surcharge
First Tk. 30,000,000 (Three crore) Nil Nil
> Tk. 30,000,000 (Three crore) but < Tk, 50,000,000 (Five Crore)
Or, having more than one motor car Or, house property of 8000+ sqf in 10%
3,000/-
any city corporation
> Tk. 50,000,000 (Five Crore) but < Tk. 100,000,000 (Ten Crore) 15%
> Tk.100,000,000 (Ten Crore) but < Tk. 150,000,000 (Fifteen Crore) 20%
> Tk.150,000,000 (Fifteen Crore) but < Tk. 200,000,000 (Twenty Crore) 25% 5,000/-
> Tk.200,000,000 (Twenty Crore) 30%

Higher of 0.1% of net wealth & 30% on net tax liability in case of individual having net wealth of
minimum 50 Crore
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Section 19AAAA : investment in any tradable Securities by 30 June 2021
subject to payment of 10% tax and lock-in period of 1 years

Section 19AAAAA: disclosure of undisclosed property & cash by 30 June 2021

subject to paying tax before submission of return or revised return as per square meter for
land and building & 10% of cash, savings instruments, etc.

Section 19BBBBB: investment in any type of building & apartment

subject to paying tax as per square meter for residential/commercial building /apartment

Section 82BB (11): initial capital for business or profession for new assessee
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Particulars Section 19AAAA Section 19AAAAA Section 19BBBBB Section 82BB (11)

Overriding Notwithstanding anything Notwithstanding anything Notwithstanding anything Not addressed explicitly
provisions contained in this contained in this Ordinance contained in this
Ordinance or any other or any other law for the Ordinance….
law for the time being time being in force…..
in force…..
Way of No question as to the No question as to the Source shall be deemed No question as to the
dealing with source source to have been explained source
source
Relevant Any authority Any authority Tax authority (deduced) Tax authority (deduced)
authority

Investment Any sum invested in Any undisclosed Any sum invested in the Initial capital of the
field securities movable and construction or business/profession of a
immovable property purchase of any new assessee
building/apartment
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Particulars Section 19AAAA Section 19AAAAA Section 19BBBBB Section 82BB (11)
Detailed (i) Stocks, shares, mutual (i) Land, building or Apartment or building Initial capital if shown
scope fund units, bonds, apartment (immovable income: (i) exceeds tax
debentures and other property); (ii) Cash, exemption threshold
securities listed in and bank deposits, financial and (ii) not less than 20%
approved by BSEC; (ii) schemes and instruments, of the initial capital
All other government all kinds of deposits or invested
securities and bonds saving deposits, savings
tradable in the capital instruments or certificates
market (movable property)

Past/future Investment shall be Existing movable/ Investment completed in Investment made in an

event made from 01 July 2020 immovable property not any income year income year for which
to 30 June 2020 disclosed earlier corresponding return submitted under
assessment of which is section 82BB (Universal
pending Self)
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Particulars Section 19AAAA Section 19AAAAA Section 19BBBBB Section 82BB (11)

Tax rate and 10% on investment (i) movable property @ At varying rates before At regular tax rate, i.e.,
payment within 30 days from the 10% and (ii) the assessment for the not applicable to
date of such investment immovable property @ relevant assessment year business/professional
varying rates; before in which the investment is income subject to
submission of completed reduced tax
return/revised return rate/exemption; on or
from 01 July 2020 to 30 before filing return
June 2021 - ???
Declaration/ Declaration in the Disclosure in Disclosure/declaration in Disclosure in return with
Disclosure prescribed form and return/revised return return/revised return written statement that it
manner shall be made falls under section 82BB
and submitted to the (11)
DCT

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Particulars Section 19AAAA Section 19AAAAA Section 19BBBBB Section 82BB (11)

Higher tax Not applicable Not applicable (i) If already owns a Not applicable
rate building/apartment in any
City Corporation or
makes investment in
1+ buildings/apartments,
tax rate shall be 20%
higher; (ii) If notice
issued under section
93/113 (f) or
proceeding initiated
under section 164, 165
and 166 before
submission of return, tax
rate shall be 100%
higher 11
Particulars Section 19AAAA Section 19AAAAA Section 19BBBBB Section 82BB (11)
Lock-in 1 year from the day of Not applicable Not applicable 4 subsequent income
period investment years
Legality of Not addressed Not addressed Not applicable to the Not addressed explicitly
source explicitly but implied by explicitly but implied by source of investment
the overriding provisions the overriding provisions derived from (i) criminal
activities or (ii)
illegitimate source

Application Not applicable to Not applicable to cases Not applicable to the Not applicable
of provisions cases where any where any proceeding case if the relevant
proceeding drawn drawn on/before the assessment is
on/before the day of day of submission of complete
making such return/revised return
investment under under tax/any other law
tax/any other law
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One page return form for tax payers having income and gross wealth not
exceeding Tk. 4 lac and 40 lac respectively [ Rule 24(1A)]
Not applicable for tax payer having motor car or investment in house property/
apartment in any city corporation area

Tax rebate of Tk. 2,000 for filing return online for the first time
Return not mandatory for person having ETIN only for sale of land and for
credit card
Increase in exemption limit for paying AIT for persons not assessed yet (6 lac
taka instead of 4 lac)
Increase in exemption limit for furnishing statement of assets, liabilities and
life style
• net wealth not exceeding 40 lac for furnishing IT -10B2016
• total income not exceeding 4 lac for furnishing IT -10BB2016 13
Minimum tax on gross receipts of Tk. 3 crore or more
Charging of Tax @ 50% on difference of investment, import & export
made
AIT for private motor car has been increased (e.g. 25,000 taka instead of
15,000 for 1500 CC car)
ETIN and returns required for person engaged in shared economic
services & having arms license
Return mandatory for person required to have ETIN subject to some
exceptions
Payment/income from Pension and Gratuity (only approved and Govt.
fund) eligible for exemption
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 Previous Rates New Rates
Nature of Company
(AY 2019-2020) (AY 2020-2021)
Publicly Traded Company 25% 25%
Non-Publicly Traded Company 35% 32.5%
Bank, Insurance & Financial Institution (Other
than Merchant Bank):
Publicly Traded Company 37.5% 37.5%
Non-Publicly Traded Company 40% 40%
Merchant Bank 37.5% 37.5%
Cigarette Manufacturing Company 45% 45%
Mobile Phone:
Publicly Traded Company 40% 40%
Non-Publicly Traded Company 45% 45%
RMG 12% 12%
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Association of Person (AoP) - 32.5%
 Section 2 (46): Person
Person includes an AoP
Section 2 (20): Company
As per the ITO, 1984 Company includes AoP if any of such person is a company as
defined in the Companies Act, 1994;
Section 44 (2) (a) & Para 15, Part B, 6th Schedule:
AoP excludes a HUF, company or a firm

• Two or more persons;

• Voluntary participation;
• A common purpose or common action with object to
General Features produce income, profit or gains;
• Combination in joint enterprise;
• Specific kind of scheme for common management;
• Similar to a partnership but does not constitute partnership;
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Inclusion of Business or Undertaking in the definition of Fair Market Value

DCT will have the power to assess the value of sold Business or Undertaking

Clarifying the definition of Income Year

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Profit or income from subsidiary or associate or JV will be excluded
from net profit from business or profession while computing the limit
of royalty, technical service fee, TKH & technical assistance fee
• Illustration:
Previous Limit New Limit
Particulars
(AY 2019-2020) (AY 2020-2021)
Operating profit A 100 100
Add: Share of profit from Subsidiary/Associate/JV B 20 20
Add: Other income C 15 15
Net profit before tax D=A+B+C 135 135
Allowable limit for TKH @ 8% E= D*8% 11
Allowable limit for TKH @ 8% E= A*8% 8
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Limit for overseas travelling is 0.5% of disclosed turnover instead
of 1.25%

New bar on allowing promotional expenses up to 0.5% of

disclosed business turnover

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Clarifying the taxability of capital gains from the transfer of business or
undertaking [section 31A]

Any profits or gain arising from transfer of business or undertaking is taxable

Computation of capital gains from the transfer of business or

undertaking [section 32A]
Followings will be excluded from the amount received from transfer:
• Any expenditures solely connected to transfer
• The value of net assets of the transferred business or undertaking
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 Type of
Section Topics Summary of Changes
Changes
28 Amended Shortfall of Shortfall of capital referred to in section 82BB(12) included in section 28
capital referred (income from business or profession)
to in 82BB(12)
Subsection Insertion Carry forward & Loss of AoP will be set off with income of AoP, not with the income of
3A & 3B set off of loss of member of AoP
of section AoP Member of AoP won’t be entitled to set off the loss of AoP with his income
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46BB Amended Widening the Some new areas: Electrical transformer, Automobile parts and components
definition of manufacturing, Nanotechnology based products manufacturing, Aircraft
industrial manufacturing
undertakings

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 Type of
Section Topics Summary of Changes
Changes
51 Replaced TDS on interest, • Abolishing the existing provision of upfront TDS system
discount or profit • TDS @ 5% on interest, discount or profit on securities at the time of
on Securities payment or credit, whichever is earlier

52, 52A, Amended Widening the An order or any instruction of payment will be considered as Payment.
52AA & definition of
53E Payment

52AA Amended TDS on certain • TDS on services under any sharing economy platform ,e.g. ride sharing
services • Reduction in TDS rate for wheeling charge for electricity transmission

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 Type of
Section Topics Summary of Changes
Changes
52 Amended New proviso TDS calculation u/s 52 from the supply on which tax was deducted u/s
related to section 53E(3) will be: B-A
53E(3) A= tax paid u/s 53E [selling price mentioned in 53E(3) X 5% X 5%]
B= selling price mentioned in 53E(3) X 7% X 5% -???

• Retail price 100,000

• Selling price at lower value [mentioned in section 53E(3)] 90,000
• TDS as per Section 53E(3) [90,000X5%X5%] A 225
Particulars TDS u/s 52 as per previous law: TDS u/s 52 as per new law:
TDS as per Section 52 B (100,000X3%) 3,000 B (90,000X7%X5%) 315
Less: TDS as per section 53E (3) A 225 A 225
Difference amount to be deducted u/s 52 B-A 2,775 B-A 90
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 Formula of TDS calculation u/s 52 from the supply on which tax was deducted
u/s 53E(1) will be: B-A u/s 53E(3) will be: B-A
A= tax paid u/s 53E [Commission mentioned in section 53E(1) X A= tax paid u/s 53E [selling price mentioned in 53E(3) X 5% X 5%]
10%] B= selling price mentioned in 53E(3) X 7% X 5% -???
B= tax applicable u/s 52 if no tax were paid u/s 53E(1)

• Distributor price = 100,000/- • Retail price = 100,000/-

• Commission = 10,000/- • Selling price = 90,000/-
• TDS as per section 53E(1) • TDS as per section 53E(3)
[10,000X10%) = 1,000 [90,000X5%X5%) = 225/-

Particulars TDS u/s 52 adjusting TDS u/s 53E(1) TDS u/s 52 adjusting TDS u/s 53E(3)
TDS as per Section 52 B (100,000X3%) 3,000 B (90,000X7%X5%) 315
Less: TDS as per section 53E A 1,000 A 225
Difference amount to be deducted u/s 52 B-A 2,000 B-A 90
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 Type of
Section Topics Summary of Changes
Changes
52C Amended TDS on compensation • 6% instead of 2% of compensation for property situated in city
corporation, paurashava or cantonment board
• 3% instead of 1% for any other areas
52Q Replaced TDS on income remitted • 10% TDS on amount remitted from abroad as fee, service charges,
from abroad commission or remuneration, called by whatever name, or revenue
sharing for :
 service rendered in Bangladesh;
 service rendered by a resident in favour of a foreign person;
 allowing any online platform for advertisement or any other
purposes
• Exclusion: Remittance earned abroad and brought by Bangladeshi
citizen & Remittance for ITES Services exempted as per para 33
52R Amended TDS for international Deduction of tax at source by IGW from payment to BTRC
phone call 26
 Type of
Section Topics Summary of Changes
Changes
52U Amended TDS on payment TDS @ 2% applicable to local L/C opened for purchase of rice, wheat, potato,
of onion, garlic, sugar, computer & accessories, jute, cotton, yarn, etc.
Local L/C
53BB Amended TDS on export Changes in TDS rate from 1% to 0.5%. Prevailing TDS rate is 0.25% as per SRO.
& proceeds
53BBBB
53BBB Amended TDS from • TDS @ 0.05% on value of shares & mutual funds transacted
member of • TDS @ 10% on the commission for transaction of other securities
Stock Exchange
56 Amended TDS from TDS will be applicable on dividend payment to
income of Non- • company, fund and trust : 20%
resident • any other person : 30%
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 Type of
Section Topics Summary of Changes
Changes
68 Amended AIT payment by Increase in exemption limit for paying AIT for persons not assessed yet (6
new assessee lac taka instead of 4 lac)

68B Replaced AIT for private AIT for private motor car has been increased (e.g. 25,000 taka instead of
motor vehicle 15,000 for 1500 CC car)

75A Amended Submission of New compulsion for a university, an English medium school, local
WHT return authority, artificial juridical person
82C Amended Minimum Tax Inclusion of Professional/Technical service fee or technical assistance fee &
wheeling charge in the ambit of minimum tax
158 Amended Appeal to the Commissioner will reply to the application for reduction in 10% tax within
Appellate Tribunal 30 days
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 Type of
Section Topics Summary of Changes
Changes
184G Inserted Power of NBR to NBR may condone the period of any epidemic, pandemic, war and any
condone or other act of God in computing the time limits and extend or modify the
extend time for payment of taxes or submission of any document
Para 54 of Replaced Income of Income earned by Alternative Investment Fund will be exempted
6th Alternative
Schedule Investment Fund
part-A
Rule 16 Amended Section 52 • TDS @ 0.50% for locally procured MS Scrap
(TDS rate on • TDS @ 2% on supply of rice, wheat, potato, onion, garlic, flour, salt, etc.
supply of goods )

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 For further information, please contact:

Lutful Hadee LLM FCA Md. Raisul Islam

Proprietor & CEO Director

M +880 1711500142 M +880 1913997273

E [email protected] E [email protected]

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