Chapter 1
1. Approximate percentage of tax to GDP & tax to Revenue as per the last budget in
Bangladesh:
Tax-to-GDP ratio: Approximately 8-10%
Tax-to-Revenue ratio: Around 80-85%
2. Objectives of tax (3):
Revenue generation for public expenditure.
Redistribution of wealth.
Regulation of economic activities.
3. Meaning of tax:
A tax is a mandatory financial charge or levy imposed by a government on individuals or entities
to fund public services and infrastructure.
4. Characteristics of tax (3):
Compulsory payment.
No direct quid pro quo (benefits not directly linked to the tax paid).
Imposed by the government under legal authority.
5. Objectives of tax (4):
To finance government activities.
To promote social welfare by reducing inequality.
To control inflation or deflation through fiscal policy.
To protect local industries through tariffs and duties.
6. Cannon of taxation:
It refers to the principles that guide a fair and efficient tax system, such as equity, certainty,
convenience, and economy.
7. Define direct tax & give two examples:
A direct tax is imposed directly on individuals or organizations based on their income or wealth.
Examples:
Income tax
Corporate tax
8. Define indirect tax & give two examples:
An indirect tax is levied on goods and services and paid indirectly by consumers.
Examples:
Value Added Tax (VAT)
Customs duty
9. Advantages of direct tax (2):
Based on the taxpayer’s ability to pay, ensuring fairness.
Helps reduce income inequality.
10. Disadvantages of direct tax (2):
High rates can discourage work and investment.
Complex compliance procedures.
11. Advantages of indirect tax (2):
Easier to collect and administer.
Wide coverage as it is included in the price of goods and services.
12. Disadvantages of indirect tax (2):
Regressive, as it affects all consumers regardless of income.
Can lead to inflation if excessively high.
13. Direct & indirect taxes in Bangladesh (2 each):
Direct taxes:
Income tax
Wealth tax
Indirect taxes:
VAT
Import duty
14. Percentage of income tax to total tax revenue of Bangladesh as per the last budget:
Approximately 35-40%.
15. Percentage of Income Tax, VAT, and Import-Export duty to total tax revenue:
Income Tax: 35-40%
VAT: 35-45%
Import-Export Duty: 20-25%
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Chapter 2
1. Define income tax:
Income tax is a direct tax levied on an individual’s or entity's income.
2. Characteristics of income tax (3):
Progressive in nature.
Levied on net income after allowable deductions.
Collected annually or periodically.
3. Arguments in favour of income tax (3):
Promotes equity by taxing higher incomes more.
Flexible and can adjust to economic changes.
Revenue generation for public services.
4. Arguments against income tax (3):
High rates may discourage productivity.
Complex calculations may require professional help.
Possibility of tax evasion.
5. Meaning of tax holiday:
A temporary exemption from paying taxes, usually provided to encourage investment in specific
sectors or regions.
6. Sections & Schedules in Income-tax Ordinance, 1984:
Sections: Over 184
Schedules: 7
7. Meaning of reduced tax rate facilities:
Special tax rate concessions provided to specific sectors, industries, or individuals to promote
investment or economic development.
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Chapter 3
1. Definition of income as per Income Tax Act-2023:
Income includes any earnings, gains, or profits derived from any source.
2. Definition of income as per C.I.T. vs. Shaw Wallace & Co.:
Income is defined as a periodical monetary return coming in with regularity or expected
continuity.
3. Characteristics of income (3):
Recurring nature.
Monetary or in-kind earnings.
Legal or taxable under the law.
4. Tests for differentiating capital & revenue receipt (3):
Nature of transaction.
Purpose of earning.
Frequency of occurrence.
5. Tests for differentiating capital & revenue expenditure (3):
One-time or recurring nature.
Relation to fixed assets or operational expenses.
Intention behind the expenditure.
6. Meaning of total income & total world income:
Total income: Income earned within the country that is taxable.
Total world income: Income earned globally, which is taxable for residents.
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Chapter 4
1. Examples of non-assessable income (3):
Agricultural income.
Government pension.
Income from approved provident funds.
2. Examples of tax-eligible investment (3):
Savings in government bonds.
Investments in infrastructure projects.
Deposits in retirement schemes.
3. Examples of tax-free income (3):
Scholarship income.
Interest on certain government securities.
Charitable organization income.
4. Formula for computing investment allowance rebate limit:
5. Items eligible for direct deduction for taxable income (3):
Donations to charitable organizations.
Interest on home loans.
Medical expenses within limits.
6. Meaning of casual income:
Income that is non-recurring and accidental, such as lottery winnings.
7. Features of non-recurring income:
Irregular and infrequent.
Not part of regular business activities.
Often taxable at a different rate.
8. Examples of assessable casual & non-recurring income (3 each):
Assessable: Lottery winnings, game show prizes, speculative income.
Non-assessable: Gifts, inheritance, compensation for damages.
9. Tax holiday period & rate of exemption in Dhaka Division:
Varies by industry but typically ranges between 5-10 years with up to 100% exemption initially.
10. Undertakings eligible for tax holiday (3):
Power generation plants.
IT parks.
Export-oriented industries.
11. Items in 6th Schedule of IT Act-2023 (Part 1, 2, & 3):
Part 1: Exempted incomes.
Part 2: Exempted organizations.
Part 3: Specific allowances and deductions.
