204. TAXATION

ICMAB

204. TAXATION

204. TAXATION – 100

Course Objectives

This course is designed to achieve following objectives. These are to

a.   provide a basic knowledge in principles of taxation and tax laws

b.   understand various aspects of fiscal statutes and its practical applications

c.   assess tax, VAT etc.

d.   know how to try prepare plan for tax

 

204.01 Income Tax

 

1.01. Theory on Taxation

Meaning of Tax, Features and Purposes of Tax, Principles of Taxation, Classification of Taxes, Characteristics of a Good Tax System, Tax Structure in Bangladesh.

 

1.02. Income Tax

Introduction to Income Tax:

Income Tax – Meaning, Nature, Importance in respect of Contribution to Internal Resource Mobilization – Historical Perspective of the Income Tax Ordinance, 1984 – Statutory Definitions of Important Terms.

 

1.03. Income tax authority

Administrative and Judicial – appointment, organization structure, power and functions – Taxes Appellate Tribunal – Registered Income Tax practitioner.

 

1.04. Charge of Income Tax

Basic Principles, Systems (Conventional Exemption Limit versus Filing Threshold) – Sources of Income Tax Laws.

 

1.05. Computation of Total Income

Scope of Total Income on the basis of Assessee’s Residential Status – Income deemed to accrue or arise in Bangladesh – Deemed Income (unexplained investment etc.) – Non – Assessable Income – Income under Specific Heads.

Salaries:Definition, coverage, benefits and perquisites, provident fund.

Interest on Securities:Coverage, grossing up, deductions, exclusion limit.

Income from House Property:annual value, coverage, deductions, Tax holiday and exemption limit for newly constructed residential houses.

Agricultural Income:Agriculture assets, deductions, set-off and carry forward of agricultural losses.

Income from Business or Profession:definitions, Capital and revenue expenditures, coverage, partially business income, admissible and inadmissible expenses, depreciation on business property (normal, extra, initial, accelerated and special), set-off and carry forward of business losses and losses in speculation business.

 

1.06. Share of Income from firms. 

 

1.07. Income of Spouse or Minor child.

Capital Gains: definitions, computation, exempted capital gains, set-off and carry forward of losses under “Capital Gains”.

 

1.08. Income from other Sources

Coverage (dividend, interest on securities, royalty, fees for technical services, etc.), deductions, Clubbing of Income.

 

1.09. Foreign Income

 

1.10. Procedure of Assessment

Filing of return of income and supporting Statements.  Assessment of Tax - Provisional Assessment and Final Assessment (Correct return basis, after-hearing basis, and ex-parte) – Other issues in assessment, self-assessment, presumptive assessment, assessment for outgoing persons and deceased persons, assessment of escaped income, limitations of assessment, reopening of assessment.

 

1.11 Rates of Taxes.

Tax Rate on Capital gains and income from winnings – Tax rate on other income of individuals, firm and companies – Tax Rate on non-residents income, imposition of Surcharge.

 

1.12. Investment Tax Credit and Tax Rebate

 

1.13. Payment, Refund and Recovery.

Modes of Tax payment: Tax deducted at source (TDS) or pay-as-you-earn (PAYE), Advance payment, Payment on the basis of return, Adjustments with other taxes paid, and Payment on notice of demand, Tax Recovery, Tax Refund, Tax Relief.

 

1.14. Assessments of Individuals, Firms, Association of Persons and Co-operative Societies.

Assessment covering all heads of income – Set-off and carry forward of losses by firm’s and partner’s income including income other than firm’s income – Allocation firm’s income – Assessment in case of change in firm’s constitution and in case of constitution of new successor firm.

 

 

 

 

1.15. Corporate Taxation

Definition, Determination of total income, Rates and Rebates, classification of companies according to Income Tax Law. Assessment of Various types of Companies including bank and insurance companies and companies engaged in extraction and exploration of material resources – Corporate fiscal incentives.

 

1.16. Provident, Superannuating, Pension and Gratuity Funds.

Kinds of Provident Funds (PF) – Statutory: General & Contributory; Recognized and Unrecognized – privileges of Recognized PF – Approved Superannuation, Pension and Gratuity Funds.

 

1.17. Liabilities in special cases.

Liabilities of representatives, agents, firms, association of persons, partners, company directors, liquidators, etc.

 

1.18. Appeals, Revision and Reference

Appeal  and or Revision against DCT, Tax Recovery Officer (TRO) – Decision of appeal by AJCT, Taxes Appellate Tribunal, High Court Division and Appellate Division.

 

1.19. Miscellaneous issues.

Offence and Prosecution – Methods of Accounting – Double Taxation Relief-Tax Avoidance-Bond Washing Transactions. Tax-holiday and Tax-exemption Scheme: Industrial undertakings – Tourist Industries – Objectives and Importance of the Scheme – Accelerated Depreciation – Tax Audit and Investigation.

 

204.02 Property Taxes

2.01. Property related Tax under Income Tax law

2.02. Income tax on investment

2.03. Tax on national income

2.04. Capital gain tax on transfer of property.

2.05. Gift for, Charge of gift tax, Taxable Gifts, Exemption from Gift-tax. Determination of the value of Gifts – Return of gifts Gift – tax payable – penalty – Prosecution – Assessment procedures – Rates – Authorities. 

 

204.03 Indirect Taxes

3.01. Objective of Custom Act, Custom procedure- statutory definitions of import Terms – Duties under the custom Act 1969. [General Customs Duty (import/export duty), Regulatory Duty, Countervailing Duty, Antidumping Duty and safeguard duty] - Rates of Duties, Duties Taxes and other charges collected by custom Authority at Import point (Custom Duty (CD) Supplementary Duty (SD) Value Added Tax (VAT) Infrastructure Development surcharge (IDSC) and Advance Income Tax (AIT) Computation of Duties and Taxes at Import stage Duty, Drawback – Customs Authority – Assessment Appeals and Revision – Offence and Penalties – Power of Search, Seizure and Arrest under Custom Act. Travel Tax on Foreign Tours Baggage rules and related Taxes.

 

3.02. Value Added Tax (VAT)

Concepts, Advantages and Disadvantages, Arguments for and against VAT, Computation of VAT in Bangladesh; Obligation of Tax payers under VAT laws – Registration. Enlistment for Turnover Tax or Enlistment for cottage Industry- Payment of VAT – Submission of Return – Maintenance of Books of Accounts and Records – VAT audit offence and Penalties – Confiscation Appeals, and Revisions – Recovery of Claim VAT Refund.

 

3.03. Other Taxes

Excise duty, objectives, Current coverage of excise taxation, Tax Collection – Tax Collectors – Narcotizes duty, Current coverage of excise taxation – Tax collectors. 

 

204.04 Tax planning

4.01. Tax evasion, Tax avoidance, and effective Tax planning

4.02. Prerequisite to Effective Tax planning (All Parties, All Taxes and All Costs).

4.03. Taxing Authority as an Uninvited Investment partner

4.04. Influence of Tax Rules on Investment, Finance and Dividend Decisions.

4.05. Types of Tax planning, Importance of Tax planning

4.06. Restrictions on taxpayer behaviour – Tax Arbitrage – Tax Clientele.

 

Recommended Readings:-

1. The Income Tax Ordinance – 1984 and the Income Tax Rules 1984 (updated)

2. The Custom Act 1969

3. The value Added Tax Act – 1991 (updated)

4. The Excise and Salt Act – 1944 (updated)

5. The Gift Tax Act – 1920 (updated)

6. The Finance Acts (Latest0

7. Motor Vehicles Tax Act (Bengal Act. No. 1) 1932 (updated)

8. Motor Vehicle Ordinance (No. LV) of 1983 (updated)

9. Tax Planning under Direct Tax – Shuklendra A and M. G. gushn

10. Taxation – Wilkinson M. (Macmillan).

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