Finance Bill 2010-Bangladesh

PROPOSED CHANGES IN INCOME TAX LAW
BY
FINANCE BILL-2010
SHORT POINTS FOR DISCUSSION

1. By amending 32(7), exemption of capital Gain from sale of shares of companies listed in
Stock Exchange is withdrawn without any exception.

But exemption of Capital Gain from Sale of Govt. Securities Continues [So 32 (7)] as
before.

This exemption as per 8udget Speech must be specifically incorporated in the Act in order
to avoid dispute because exemption will not be allowed unless there is Specific provision
for same.
Sponsor share holder or Director of companies listed in the stock exchange required to take
prior consent of Securities & Exchange commission for transfer of their shares and it is
now provided that the securities & Exchange comm ission shall collect tax @5% on excess
of transfer price over face value, i.e, capital Gain on Sale of Shares form Sponsor
Shareholder or Director at the time of giving consent to said transfer of share and that the
taxes so collected shall be final discharge of tax liability. This provision will not apply to
the shareholders other than sponsor shareholder or Director as they do not require to take
consent of SEC for transfer of shares.
3. Share premium has been made subject to collection of Tax @3% of premium by Securities
& Exchange Commission and the Tax so collected shall be final discharge of tax liability
(S. 531. & 82C).
4. Withdrawal of benefit of declaration of undisclosed Income (Special Tax Treatment) in the
following cases:
S. 19
S. 19/\/\
Invcstmcnt in ncw industry
Invcstmcnt in Balancing, ModcrnisaLions, rcnovation, cxtcnsion, dc of
Industry.
Investment in stocks & Shares
Investment in I-louse property
S.19/\/\/\
S. 19B13BB
5. /\s per newly inserted section 19C, sources of fund will not be questioned of any sum
invested in the purchase of Bond Issued by Infra structure Finance fund on Payment of Tax
@1 0% before filing of Return.
6. Benefit of depreciation will be allowed on bridge or road or fly over owned by physical
Infrastructure undertaking.
7. Tax free Limit of Excess perquisite is increased from Tk. 2 lacs to Tic 2,50,000 as per S.
30 (e).
Energy Saving Bulb
Solar Energy Pancl,
Barrier Contraceptive
Or Rubber latex
9. New condition of Tax holiday is to obtain a clearance certificate from Directorate of
Environment.
From 7.5% to 15% Commission to a Stevedoring Agency or making
payment to a private Security Service Agency
\
From 0.25% to ]% Collection of Tax from Member of Stock Exchange
Brick Field:
From TIc] 0,000 to Tic 30,000 for one Section Brick Field.
From TIc 12,000 Tic 45,000 for one & hal l' Section Brick Field and for
two Section Brick Field Tk. 60,000 for three Section Brick Field.
From 4% t 7.5% Commission or remuneration paid to Agent of Foreign
byeI'.
13. President of Tribunal [(So ] 1(4)]
Existing Provision: From one of the Members of Tribunals.
Proposed : From a member of the Board or holds Current charge of a member of the
Board.
14. Equity received by a Private Limited Company or Public Company NOT listed with a
Stock Exchange at the time of increase in paid up capital by issuing shares shall be treated
as Income from other sources of issuing company if said equity is not received by crossed
change of Bank transfer:
Existing Provision is to make similar treatment in the case of all equity but it is now
proposed as above which means this new provision will not apply to Equity other than
equity other than raising capital reS. 19 (24)1
New withholding Tax @1% on compensation against acquIsItIon of property by Govt.
where immoveable propert-y is situated outside any city corporation, Paurashava or
Cantonment Board.
Existing provision to collect Tax @2% on compensation for requisition of immoveable
property situated within the jurisdiction of city corporation, Paurashava or Cantonment
Board (S. 52C) will conti nus.
~~
Withdrawal of~r~a~ exemption from deduction of Tax at source from Interest on savings
eerti fieates. Tlili exem ption was 1,ither to appl icable to :
a) Total Interest not exceeding Tic 1,50,000 in any income year.
b) Interest on saving eerti ficates purchased before 01.01.2004.
[I st & 2nd provision to S. 520]
The existing exemption will, however, continue in respect of interest on saving certificates
purchased by an approved superannuation Fund or Pension Fund or Gratuity Fund or
recogni/.cd Provident Fund or a Workers Profit Participation. Fund.
17. Increase in the amount of Tax to be collected at the time of registration of building or
apartment from the transferer who is engaged in real estate or Land Development
Business.
(i) Tic 20,000 per square metre in the eases of Building or apartment situated at
Gulshan Model Town, Banani, Baridhara, DOHS, Dhanmondi RIA, Lalmatia Housing
Society, Uttara Model Town, Bashundhara RIA, Dhaka Cantonment Area, Dilkushak
CIA, Karwan Bazar CIA of Dhaka, Khulsi RIA, Panehlaish RIA and Agrabad of
Chittagong.
18. Withdrawal of exemption from deduction of Tax on Interest on deposit of post office
saving account. This exemption was applicable where total amount of interest does not
exceed Tk. 1,50,000 during the year (S 531)
This provision will now be applicable where total Income as per latest assessment exceeds
Tic 4 lacs as against prcscnt limit ofTk. 3 lacs.
As per amendmcnt made in S.64, advance Payment of Tax will also be applicable to
capital Gain from sale of shares of companies listed in Stock Exchange.
20. Advance paymcnt of Tax by new assessee as pcr S. 68.
21. Interest on short paymcnt of~Advance Tax U/S 73 is to be now calculated from the 1st day
of April instcad of existing 1st day of July.
22. The cxtension oftimc for filing Income Tax return U/S 82BB (Univcrsed Self Assessmcnt)
has now become availablc ..
At present, no such extcnsion is available. The consequential amendment is also made is
S.82BB(2). .
23. Pcnalty NOT excceding Tk. 20,000 for using Fake TIN. (New S. 124A)
24. Punishment for using Fake TIN in addition to penalty noted above (New S. l65A)
25. TIN Certificate will now be required in the following cases U/S 184 (A) (q) (r) (s) :
(a) Application for commercial electrical & gas connection in a city corporation,
paurashava on cantonmcnt Board.
(b) Rcgistration, change of ownership or renewal of Fitness of a bus, Truck, Prime over,
lorry, etc plying for hire.
26. Withdrawal of Exemption of Interest or profit form pensioners' sav1l1g certificate
(6th Sched ule, Part A, Paragraph 41)
27. Withdrawal of Tax exemption to production ofpelleted poultry feed and the bcnefit of Tax
exemption to Income from Fisheries will not be applicable ifit is owned by a company.