Illustration : House Property Mr. Ryan is an owner of a four-storied building at Mohakhali.

Mr Ryan resides with his family in the 2nd floor and all other floors (in each floor there are two flats) are let out at a monthly rent of Tk. 9,000/- per flat. The municipal value of the house is Tk. 9,00,000/-(expected rent). The following expenses were incurred in the income year 2008-2009 for that house ; 1. 2. 3. 4. 5. 6. 7. Repair expenses Tk. 50,000; City Corporation Tax Tk. 22,000; Insurance premium Tk. 16,000; Caretaker and Night guard salary Tk. 24,000; Land revenue paid Tk. 2,000; Interest paid to HBFC Tk. 60,000 on Principal amount of Tk 60,00,000/. Alteration cost for ground floor Tk. 30,000;

During the year one of the tenants in the ground floor leave the house without paying rent for one month and another one flat was vacant for one month. Compute income from house property for the income year ended 30th June 2009. Solution : Mr. Ryan Income year : 2008-2009 Assessment year : 2009-2010 Calculation of Total Income Tk. Income from House property (Section-24): Actual rental value (9,000 X 12 X 3 X 2) Municipal Value (9,00,000 X 6/8) Annual Value(higher one) Less : Admissible expenses : Repair & maintenance (6,75,000 X 25%) City corporation tax (22,000 X 6/8) Insurance premium (16,000 X 6/8) Land revenue paid (2,000 X 6/8) Interest paid to HBFC (60,000 X 6/8) on rental portion Tk 45,000/ & as per sec25(1)(g) 60,000x20,00,000/60,00,000= 20,000 = whichever is lesser,i,eUncollectible rent (6,75,000/6 X 1/12) Vacancy allowance (6,75,000/6 X 1/12) Total Income 6,48,000 6,75,000 6,75,000 1,68,750 16,500 12,000 1,500 Tk.

20,000 9,375 9375 2,37,500 4,37,500

Illustration : From the following particular Mr. Raqib compute taxable income for the income year 2008-2009. 1. 2. 3. 4. 5. 6. 7. 8. 9. 10. 11. Sale of Rice 250 maunds @ Tk. 600 per maund Sale of Jute 100 maunds @ Tk. 400 per maund Sale of Rabi Crops Tk. 50,000 Yearly lease of agri. Land Tk. 20,000 Sale of Bamboo Tk. 6,000 Income from Tea garden Tk. 30,000 Income from Rubber garden Tk. 40,000 Income from Poultry farm Tk. 35,000 Income from cattle rearing Tk. 3,000 Income form sale of Palm Juice Tk. 6,000 Income from sale of Honey Tk. 5,000

Expenses for cultivation are as follows : Rice and Rabi crops Tk. 25,000 5,000 3,000 500 2,000 Jute Tk. 7,000 2,000 1,000 500

Cost of seeds and fertilizer Labor charge Cost of pump machine hire Repair expenses of agri. Equipments Transportation expenses

When the income tax authority ask for books of accounts regarding cultivation expenses, Mr. Adib failed to provide proper records for Jute. Other common expenses : Union parisad tax Land revenue Crop insurance premium Allowable depreciation Maintenance cost of irrigation plant Tk. 2,000 1,000 2,500 5,000 4,000

He had a pump machine which was purchased at Tk. 25,000. It has become obsolete and has been discarded at Tk. 12,000. The written down value after charging depreciation at ITO prescribed rate estimated at Tk. 10,000. He has taken agricultural loan Tk. 50,000 @ 8% interest p.a.

Solution : Mr. Raqib Income year : 2008-2009 Assessment year : 2009-2010 Calculation of Total Income
Tk. Income from Agriculture (Section-26): Sale of rice (250 X 600)-(26)(1)(a) Sale of Rabi crops-(26)(1)(a) Less : admissible expenses [27(1)(c)(i)] 1. Production expenses: Cost of seeds & Fertilizer Labour charge Cost of pump machine hire Repair expenses of agricultural equip. Transportation Costs for rice & Rabi Crops Sales of Jute (100 X 400)- -(26)(1)(a) Less: Costs for jute (40,000X60%)[27(1)( )(ii)] c Yearly lease of land-(26)(1)(a)/[27(1)( )(iii)-nil] c Sales of bamboo -(26)(1)(a) Less : Cost of Production (60%) [27(i)(c)(ii)] Income from Tea garden (60%) Income from rubber garden (60%) Income from poultry farm (-) exemption (full) Income from cattle rearing Income from sales of palm juice Income from sakes of honey Gain from sale of absolete equipment (sale-wdv)=(12,000-10,000)=26(1)(b)/19(17) Less : Common Expenditure (sec- 27): Union parisad Tax Land Revenue Crop insurance premium Allowable Depreciation Maintenance cost of irrigation plant Interest from borrowed fund (50,000 X 8%) Income from Agriculture Income from Business or profession : Income from Tea garden (40%) Income from rubber garden (40%) Total Income 1,50,000 50,000 2,00,000 25,000 5,000 3,000 500 2,000 35,500 1,64,500 40,000 24,000 16,000 20,000 6,000 3,600 2,400 18,000 24,000 35,000 35,000 3000/-3000/ nill 6,000 5,000 2,000 2,57,900 2,000 1,000 2,500 5,000 4,000 4,000 18,500 2,39,400 12,000 16,000 28,000 2,67,400 Tk. Tk.

Illustration : Ms Farah has earned the following incomes for the Income year 2008-09. Compute taxable income of Ms Farah under the head of other source. 1. 2. 3. 4. 5. 6. 7. 8. 9. 10. Dividend from a private Limited Company Interest on fixed deposit Interest on saving certificate Remuneration for exam script evaluation and invigilation Prize of winning prize bonds lottery Income from copyright and royalty Remuneration as director Income from marriage anniversary Income from license Dividend from Unit Certificate Tk. Tk. Tk. Tk. Tk. Tk. Tk. Tk. Tk. Tk. 4,500 2,70,000 20,000 1,000 25,000 4,000 10,000 5,000 2,000 26,000

During the year he purchased Jewellery for Tk. 25,000 but the sources of which has not been explained to the DCT. During the year he has paid Tk. 200 for license renewal fee and Tk. 800 interest on loan taken to purchase the share of private limited company. Commission paid Tk. 1,000 for collecting dividend of a private limited company and interest on savings certificate. Solution

Working Part
(i) Grossing-up : Dividend from Share 4,500 X = 5,000 Interest Bank deposit 2,70,000 X 100 = 3,00,000 100 10

Lottery 25,000 X

100 = 31,250 100 20 100 = 4,444 100 10 100 = 28,888 100 10

Royalty 4,000 X

Dividend from Unit Certificate 26,000 X

(ii) Weighted Commission Expenditure For dividend of a Private Ltd Company = 1000 X 5000 = 200/ 5000 + 20000

For savings certificate =

1000 X 20000= 800 5000 + 20000

Assessee : Ms Farah Assessment year : 2009-10 Income year : 2008-09 Item of Income Dividend from a private Limited Company Less : Interest on loan Commission Interest on fixed deposit Interest on saving certificate (Sanchaypatra) Less : Commission Less: exemptions as per 6th Schedule part A para 31B R em uneration for exam script evaluation and invigilation Prize of winning prize bonds lottery (FDTL) Income from copyright and royalty (FDTL) Income from marriage anniversary Less : exemptions ( Social custom) Income from license Less : license renewal fee Dividend from Unit Certificate Less : Exemption as per 6th Schedule Part-A, ParaUnexplained investment to Jewellery (U nd er sectio n-1 9 ) Total income : 5,000 5,000 2,000 200 28,888 25,000 20,000 800 19,200 19,200 _ 1,000 31,250 4,444 1800 Tk 800 200 Tk 5,000 1,000 4,000 3,00,000 Tk

3,888 25,000 3,71,382

Total Income = 3,71,382/ Less 1,65,000/ 2,06,382/ -FDTL Income 35,694/ 1,70,688/ x