PRINCIPLES OF

TAXATION
CA CERTIFICATE LEVEL
2025 MCQ PRACTICES
BOOK

PREPARED BY
Jamal Hossain
Department of Finance and Banking
Jatiya Kabi Kazi Nazrul Islam University
 Chapter 1: Introduction to Income Tax
1. What is the main objective of imposing income tax?
A. Encourage exports
B. Control inflation
C. Generate government revenue
D. Promote savings
Answer: C
Explanation: The primary objective of income tax is to raise funds for public services and
infrastructure.

2. Which law governs income tax in Bangladesh?

A. Customs Act 1969
B. VAT Act 2012
C. Income-tax Ordinance, 1984
D. Finance Act 1991
Answer: C
Explanation: Income-tax Ordinance, 1984 is the main law for income tax in Bangladesh.
3. Who is responsible for administering income tax?
A. Bangladesh Bank
B. ACC
C. National Board of Revenue (NBR)
D. Planning Commission
Answer: C
Explanation: NBR is the main authority for tax collection in Bangladesh.

4. Income tax is a type of:

A. Indirect tax
B. Wealth tax
C. Direct tax
D. Service tax
Answer: C
Explanation: Income tax is a direct tax as it is directly paid by the individual or entity on their
income.
5. The year in which income is earned is called:
A. Assessment year
B. Previous year
C. Income year
D. Tax year

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 Answer: C
Explanation: Income year refers to the 12-month period during which income is earned.

6. What is the assessment year?

A. The year before income is earned
B. The year income is earned
C. The year after income is earned
D. The year income is deposited
Answer: C
Explanation: Assessment year is the year following the income year in which tax is assessed
and paid.

7. Income tax in Bangladesh is charged on:

A. Gross income
B. Net income
C. Total income after exemptions
D. Capital
Answer: C
Explanation: Income tax is charged on total income after allowing exemptions and deductions.

8. Who is a “person” under the Income-tax Ordinance?

A. Only individuals
B. Only companies
C. Individuals, firms, companies, and associations
D. Government employees
Answer: C
Explanation: “Person” includes individual, firm, association of persons (AOP), company, local
authority, etc.
9. Agricultural income in Bangladesh is:
A. Fully taxable
B. Taxable if more than 5 acres
C. Tax-free
D. Partially taxable
Answer: C
Explanation: Agricultural income is exempt under Section 52 of the Income-tax Ordinance.

10. Tax holiday means:

A. No tax on holidays
B. Penalty for late tax
C. Temporary tax exemption
D. Bonus tax credit

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 Answer: C
Explanation: Tax holiday is a government policy that gives businesses temporary tax
exemption.

11. Who declares the tax rates every year?

A. President
B. Prime Minister
C. Finance Minister
D. Tax Commissioner
Answer: C
Explanation: The Finance Minister announces tax rates in the annual budget.

12. Which document includes the changes in tax law every year?
A. Gazette
B. Finance Act
C. Income Tax Manual
D. Budget Proposal
Answer: B
Explanation: Finance Act is passed every year with changes in tax rules.

13. What is self-assessment?

A. Assessment by tax inspector
B. Assessment by court
C. Voluntary declaration of income by taxpayer
D. Estimation by auditor
Answer: C
Explanation: Self-assessment means the taxpayer calculates and files tax return on their own.

14. The deadline to file individual return (without extension) is:

A. June 30
B. March 15
C. April 1
D. November 30
Answer: D
Explanation: The regular deadline for individual tax return filing is November 30 of the
assessment year.

15. When was the Income-tax Ordinance enacted?

A. 1991
B. 1980
C. 1984
D. 1995

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 Answer: C
Explanation: The Income-tax Ordinance came into effect in 1984.

16. Which of the following is taxable income?

A. Gift from friend
B. Agriculture income
C. Interest from bank deposits
D. Inheritance
Answer: C
Explanation: Interest income from bank deposits is taxable in Bangladesh.

17. “Heads of Income” under the Ordinance are:

A. 3
B. 5
C. 6
D. 4
Answer: C
Explanation: There are 6 heads of income: salary, interest on securities, house property,
agriculture, business/profession, other sources.

18. Which of the following is not a head of income?

A. Salary
B. Donation
C. House property
D. Business or profession
Answer: B
Explanation: Donation is not a head of income.

19. A company is assessed under which status?

A. Firm
B. Individual
C. Company
D. AOP
Answer: C
Explanation: A company is a separate legal entity and assessed as a company.

20. Who is treated as “resident” in Bangladesh?

A. Stays 180 days in a year
B. Visits 2 times in a year
C. Stays less than 90 days
D. Foreigners only
Answer: A

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 Explanation: Anyone staying in Bangladesh for 182 days or more in an income year is treated
as resident.

21. Who is treated as “non-resident”?

A. Lives abroad permanently
B. Does not stay 182 days in a year
C. Comes for vacation
D. Lives in village
Answer: B
Explanation: If a person stays less than 182 days in Bangladesh in an income year, they are non-
resident.

22. Income of non-residents is:

A. Exempted
B. Taxed only on foreign income
C. Taxed only on Bangladesh-sourced income
D. Fully taxable
Answer: C
Explanation: Non-residents are taxed only on income earned in Bangladesh.

23. The term “assessee” means:

A. Government employee
B. Taxpayer
C. Inspector
D. Income earner only
Answer: B

Explanation: An assessee is any person by whom tax or any sum of money is payable under the
Ordinance.
24. Income tax is charged on:
A. Exempt income
B. Total income
C. Profit only
D. Savings only
Answer: B
Explanation: Tax is charged on total income after adjusting for exemptions and deductions.

25. Which section of the Ordinance defines income?

A. Section 2
B. Section 20
C. Section 45
D. Section 100

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 Answer: A
Explanation: Section 2 provides definitions including income.

26. Which is a previous year’s (senior) question: "What is the status of agriculture income
under Bangladeshi tax law?"
A. Fully taxable
B. Partially exempt
C. Fully exempt
D. Only corporate income taxable
Answer: C
Explanation: Agricultural income is exempt under tax law.

27. Which of the following is a direct tax?

A. VAT
B. Customs duty
C. Excise duty
D. Income tax
Answer: D
Explanation: Income tax is a direct tax.

28. Dividend income is generally:

A. Tax-free
B. Fully taxed
C. Taxed at reduced rate
D. Taxable after 10 years
Answer: C

Explanation: Dividend income is taxed at a reduced rate under special provisions.

29. Who is required to file a return of income?

A. Any person earning taxable income
B. Every citizen
C. Only salaried persons
D. Only businesses
Answer: A
Explanation: Anyone with income above the taxable limit must file a return.
30. Which form is used for individual income tax return filing?
A. IT-10B
B. IT-12B
C. IT-11GA
D. IT-15

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 Answer: C
Explanation: IT-11GA is the prescribed form for individual income tax return.

Chapter 2: Basic Concepts and Definitions of Income Tax Ordinance, 1984

1. Under which section are definitions of terms given in the Income Tax Ordinance, 1984?
A. Section 3
B. Section 2
C. Section 4
D. Section 5
Answer: B
Explanation: Section 2 contains definitions of key terms used throughout the ordinance.

2. What is the definition of an "assessee"?

A. Government official
B. Tax lawyer
C. Person liable to pay tax
D. Income calculator
Answer: C
Explanation: An assessee is a person liable to pay tax or has defaulted under the Ordinance.

3. A company includes which of the following?

A. Sole proprietorship only
B. Only public limited company
C. Body corporate, association, or institution
D. Only foreign company
Answer: C
Explanation: The definition of company includes body corporates, statutory institutions, and
associations.

4. What is the full form of AOP?

A. Association of Public
B. Association of People
C. Association of Persons
D. Association of Professionals
Answer: C
Explanation: AOP stands for Association of Persons, including firms and joint ventures.

5. The term “Income” includes:

A. Salary only
B. House rent only

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C. Profits, gains, dividends, and benefits
D. Foreign income only
Answer: C
Explanation: Income includes all kinds of gains such as salary, profit, dividends, and fringe
benefits.

6. Which of the following is not included in “person”?

A. Individual
B. Company
C. Government
D. Tree
Answer: D
Explanation: Person includes individual, company, firm, AOP, local authority, etc.
7. Which of the following best defines "income year"?
A. Calendar year
B. Financial year
C. 12 months prior to assessment year
D. Budget year
Answer: C
Explanation: Income year is the period in which income is earned before the assessment year.

8. What is the default income year for a company in Bangladesh?

A. Calendar year
B. July to June
C. April to March
D. January to December
Answer: B
Explanation: The financial year (July 1 to June 30) is the default income year for companies.

9. Who is considered a “resident” in Bangladesh?

A. Lives 60 days in Bangladesh
B. Spends 182 days or more in a year
C. Born in Bangladesh
D. Holds a passport
Answer: B
Explanation: Anyone who stays in Bangladesh for 182 days or more in an income year is a
resident.
10. Income from business or profession is classified under which head?
A. House property
B. Agriculture

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C. Salary
D. Business or profession
Answer: D
Explanation: It includes profits and gains from trade, commerce, or profession.

11. What is total income?

A. Only salary income
B. Total earnings without exemptions
C. Total of all heads after exemptions and deductions
D. Only business profit
Answer: C
Explanation: Total income is computed after considering exemptions and deductions from all
heads.
12. An individual who earns taxable income must file return under:
A. IT-11GA
B. IT-12B
C. IT-10
D. IT-15
Answer: A
Explanation: IT-11GA is the prescribed form for individuals filing returns.

13. Who can be a "representative assessee"?

A. Tax auditor
B. Lawyer
C. Guardian, agent, or manager of a non-resident
D. Only company director
Answer: C
Explanation: A representative assessee is someone responsible for another person’s income, like
guardians.
14. Under the Ordinance, “Tax” means:
A. Direct tax only
B. VAT and Customs
C. Income tax and surcharge
D. Tax on imports
Answer: C
Explanation: Tax includes income tax and any surcharge under the Ordinance.
15. Which section defines “income” under the Ordinance?
A. Section 2(34)
B. Section 20

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C. Section 15
D. Section 5
Answer: A
Explanation: Section 2(34) defines the term “income” in broad terms.

16. Income includes:

A. Lottery winnings
B. Compensation
C. Gratuity
D. All of the above
Answer: D

Explanation: All are included as per definition of income.

17. An AOP must file return if:
A. Has any income
B. Has taxable income
C. It is registered
D. Has loss
Answer: B
Explanation: AOP must file return if total income is taxable.

18. What is surcharge?

A. Fine
B. Additional charge on tax payable
C. Interest
D. Rebate
Answer: B
Explanation: Surcharge is additional tax on high-income individuals/entities.

19. Clubbing of income is applicable to:

A. Companies
B. Minor’s income under parent
C. Business firms
D. NGOs
Answer: B
Explanation: Income of minors is clubbed with parents in specific cases.

20. Which of the following is a senior (previous year) question: "Definition of resident
person"?
A. Stays in BD 100 days
B. Has BD nationality

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C. Stays in BD for 182 days or more
D. Pays tax in BD
Answer: C
Explanation: Resident status depends on physical stay, not nationality.

21. An “individual” in tax law refers to:

A. A person
B. A natural human being
C. An institution
D. A business only
Answer: B
Explanation: Individual refers to a natural person, as opposed to a legal entity.

22. A “firm” under tax law includes:

A. Company
B. Sole proprietorship
C. Partnership
D. NGO
Answer: C
Explanation: Firm includes partnerships under the Partnership Act.

23. Income from salary is taxed under which head?

A. Salary
B. Other sources
C. Business
D. Exempted income
Answer: A
Explanation: Salary is one of the six specified heads.
24. Exempt income includes:
A. House rent
B. Salary
C. Dividend from mutual fund
D. Profit from regular business
Answer: C
Explanation: Dividend from mutual funds up to certain limits may be exempt.

25. When must a person file a return mandatorily?

A. If income is below threshold
B. If taxpayer wants rebate
C. If income exceeds tax-free limit
D. If person owns car

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 Answer: C
Explanation: Filing is mandatory if taxable income exceeds the threshold.

26. Return of income must be signed by:

A. Lawyer
B. Chartered Accountant
C. Assessee or authorized representative
D. Banker
Answer: C

Explanation: Assessee or a legally authorized person must sign the return.

27. The term “Income Tax Return” means:

A. A payment receipt
B. A form to claim refund
C. Statement of total income & tax paid
D. Government bond
Answer: C
Explanation: Tax return includes all income details and tax paid.
28. A “local authority” is treated as a:
A. Individual
B. Firm
C. Person
D. Minor
Answer: C
Explanation: Local authority is considered a person under Section 2.

29. A company’s income year is fixed by:

A. Shareholders
B. NBR
C. Company Act
D. Articles of Association
Answer: B
Explanation: The NBR specifies the income year, usually July to June.

30. "Taxpayer’s Identification Number" (TIN) is mandatory for:

A. Filing tax return
B. Opening a bank account
C. Registering land
D. All of the above

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 Answer: D
Explanation: TIN is essential for various financial and legal activities

Chapter 03: Heads of Income – Salaries

Q1. Which of the following is fully exempt from tax under the head “Salaries”?
A) Bonus
B) Dearness Allowance
C) Gratuity received from a government employee
D) Commission

Answer: C
Explanation: Gratuity received by a government employee is fully exempt under Section 4(3) of
the Income Tax Ordinance, 1984.

Q2. Which of the following is a perquisite?

A) Conveyance Allowance
B) House Rent Allowance
C) Employer’s contribution to RPF in excess of 10% of salary
D) Dearness Allowance

Answer: C
Explanation: Employer’s contribution to a recognized provident fund (RPF) exceeding 10% of
basic salary is considered a taxable perquisite.
Q3. Entertainment allowance is exempt up to:
A) Tk. 10,000
B) Tk. 5,000
C) Tk. 20,000
D) Nil for private sector employees

Answer: D
Explanation: Entertainment allowance exemption is available only to government employees.

Q4. Medical allowance in cash is exempt up to what amount if no supporting bill is submitted?
A) Tk. 10,000
B) Tk. 30,000
C) Tk. 25,000
D) Fully taxable

Answer: B
Explanation: Medical allowance up to Tk. 30,000 per annum is exempt without supporting bills.

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Q5. What is the exemption limit for House Rent Allowance (HRA)?
A) 40% of basic salary
B) Actual amount received
C) Minimum of actual HRA or 50% of basic or Tk. 300,000
D) Lowest of actual HRA received, 50% of basic salary, or Tk. 300,000

Answer: D
Explanation: HRA is exempt up to the lowest of the three: actual received, 50% of basic salary,
or Tk. 300,000.

Q6. Leave encashment at retirement for private employees is:

A) Fully exempt
B) Fully taxable
C) Partly exempt
D) Not taxable if below Tk. 500,000

Answer: C
Explanation: Leave encashment is partly exempt; government employee encashment is fully
exempt.

Q7. Which of the following is not a taxable component of salary?

A) Basic salary
B) Arrears of salary
C) Pension received by government employees
D) Bonus

Answer: C
Explanation: Pension received by government employees is fully exempt under Section 4(3).

Q8. Pension received by a private employee is:

A) Fully taxable
B) 50% exempt
C) 100% exempt if commuted
D) Partly exempt (commuted)

Answer: D
Explanation: Commuted pension for private sector employees is partly exempt; uncommuted
pension is fully taxable.

Q9. Which one of the following allowances is fully exempt from tax?
A) Dearness allowance
B) House rent allowance
C) Conveyance allowance (used for official purpose with evidence)
D) Entertainment allowance

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 Answer: C
Explanation: Conveyance allowance used solely for official purposes with documentation is
fully exempt.

Q10. Which of the following is considered ‘salary’ for income tax purposes?
A) Director’s fee
B) Honorarium
C) Wages paid to daily labor
D) Remuneration paid to managing director

Answer: D
Explanation: Remuneration to a managing director is treated as salary for tax purposes if he is
in full-time employment.
Q11. Salary includes:
A) Only fixed pay
B) Fixed and variable allowances
C) Basic pay, bonus, commission, allowances, and perquisites
D) Basic pay and HRA only

Answer: C
Explanation: Salary includes everything received in cash or kind from the employer – basic,
bonus, commission, allowances, perquisites, etc.

Q12. Which of the following qualifies for tax exemption?

A) Commission received from employer
B) Tax paid by employer on behalf of employee
C) Festival bonus
D) Gratuity received by a non-government employee beyond limits

Answer: B
Explanation: If tax is paid by the employer on behalf of the employee, the amount is not treated
as income in hands of employee if exempted by statute.
Q13. The maximum limit of perquisite exemption (excluding certain allowances) is:
A) 25% of total income
B) Tk. 450,000
C) Tk. 300,000
D) 10% of gross salary

Answer: B
Explanation: Perquisite exemptions are capped at Tk. 450,000 except for specific items like
RPF, gratuity, etc.

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Q14. Gratuity received by a private employee is exempt up to:
A) Tk. 500,000
B) Tk. 1,000,000
C) Tk. 200,000
D) One-third of total amount received or limit as prescribed

Answer: B
Explanation: As per SRO, gratuity exemption for private sector employees is limited to Tk.
1,000,000.

Q15. What percentage of basic salary is used to calculate employer’s contribution to RPF?
A) 8%
B) 10%
C) 12%
D) Any amount is exempt

Answer: B
Explanation: Employer’s contribution up to 10% of basic salary is exempt; excess is taxable.

Q16. Salary from more than one employer is:

A) Taxed separately
B) Taxed under “Income from other sources”
C) Added to total salary income
D) Exempt from tax

Answer: C
Explanation: Salary from all employers is aggregated and taxed under “Salaries”.

Q17. Arrear salary is taxable in:

A) The year it was due
B) The year it is received
C) Spread over previous years
D) Exempted if below threshold

Answer: B
Explanation: Arrear salary is taxable on a receipt basis unless assessed earlier.

Q18. Advance salary is:

A) Not taxable
B) Taxable in the year it is due
C) Taxable in the year of receipt
D) Exempt if refunded

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 Answer: C
Explanation: Advance salary is taxable when received, not when due.

Q19. Transport allowance is exempt up to:

A) Tk. 20,000 per year
B) Tk. 30,000 per year
C) Tk. 36,000 per year
D) Fully taxable

Answer: C
Explanation: Transport allowance up to Tk. 3,000/month or Tk. 36,000/year is exempt if not
provided with office vehicle.

Q20. Leave travel concession is:

A) Fully exempt
B) Partially exempt
C) Exempt if claimed with proof
D) Fully taxable

Answer: D
Explanation: In Bangladesh, LTA is not exempt unless specific SRO provides exemption (which
is rare).
Q21. Salaries are taxable on:
A) Receipt basis
B) Due basis
C) Either receipt or due, whichever is earlier
D) Only when credited to account

Answer: C
Explanation: Salary is taxable on “due or receipt basis, whichever is earlier”.

Q22. Fringe benefits provided to employees are:

A) Fully exempt
B) Part of perquisites and taxable
C) Capital receipts
D) Taxable only if in cash

Answer: B
Explanation: Fringe benefits are perquisites and included in taxable salary.

Q23. Salary from foreign services received in Bangladesh is:

A) Fully exempt
B) Fully taxable

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C) Taxable only if exceeding Tk. 500,000
D) Taxable if not taxed abroad

Answer: B
Explanation: Any salary received in Bangladesh is taxable regardless of source.

Q24. Salary includes:

A) Basic salary only
B) All monetary benefits from employment
C) Only allowances
D) Only benefits in kind

Answer: B
Explanation: It includes basic salary, allowances, bonus, commissions, and perquisites.

Q25. Tax deducted at source (TDS) on salary is:

A) Optional
B) Mandatory
C) Done only at year-end
D) Done by NBR directly

Answer: B
Explanation: TDS on salary is mandatory under Section 50 of the ITO, 1984.

Q26. Superannuation fund received is:

A) Fully exempt
B) Fully taxable
C) Partly exempt
D) Exempt under conditions

Answer: D
Explanation: Exempt if approved and within prescribed limits.

Q27. What is the time of taxation for bonus received?

A) When due
B) When declared
C) When received
D) Earlier of due or received

Answer: D
Explanation: Same as salary—earlier of due or received.

Q28. Value of rent-free accommodation is taxable as:

A) Bonus

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B) Allowance
C) Perquisite
D) Exempt

Answer: C
Explanation: It’s a perquisite and taxable based on fair rental value or as per rules.

Q29. Festival bonus is:

A) Fully exempt
B) Fully taxable
C) Partly taxable
D) Exempt up to Tk. 10,000

Answer: B
Explanation: Festival bonus is considered part of salary and fully taxable.

Q30. Remuneration received by a part-time director is:

A) Salary income
B) Income from business
C) Income from other sources
D) Exempt

Answer: C
Explanation: Part-time directors are not treated as employees; income is taxed under “Other
Sources”.

Chapter 04: Income from Interest on Securities

Q1. Interest received on government securities is taxable under which head?
A) Income from Business
B) Capital Gains
C) Income from Other Sources
D) Income from Interest on Securities

Answer: D
Explanation: Interest earned on government securities is taxed under the specific head “Interest
on Securities”.

Q2. Interest on which of the following is exempt from tax?

A) Treasury bills
B) Government prize bonds (up to Tk. 5,000)
C) Bangladesh Bank bonds
D) Sanchayapatra

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 Answer: B
Explanation: Interest from prize bonds is exempt up to Tk. 5,000 u/s 44(2)(b).

Q3. Tax is deducted at source from interest on securities under which section?
A) Section 50
B) Section 51
C) Section 52
D) Section 53

Answer: A
Explanation: Section 50 of the Income Tax Ordinance, 1984 deals with TDS on interest on
securities.

Q4. Interest on debentures issued by a company is taxed under:

A) Income from Other Sources
B) Income from Business
C) Income from Interest on Securities
D) Exempted income

Answer: C
Explanation: Debenture interest is taxed under "Interest on Securities", regardless of issuer.

Q5. TDS rate on interest from government securities for individual taxpayers is:
A) 10%
B) 15%
C) 20%
D) 5%

Answer: A
Explanation: TDS on government securities is usually at 10% for individual taxpayers.

Q6. Who is the deducting authority for TDS on interest from Treasury Bonds?
A) Bangladesh Bank
B) NBR
C) Auditor General
D) Commercial Banks

Answer: A
Explanation: Bangladesh Bank, being the issuer and payment authority, deducts TDS.
Q7. The TDS deducted under section 50 is:
A) Final settlement
B) Minimum tax

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C) Adjustable against total tax liability
D) Refundable only

Answer: C
Explanation: TDS on interest on securities is adjustable against total tax liability.

Q8. Taxpayer earning only interest income (no other income) must:
A) File return mandatorily
B) Not file return if TDS has been deducted and income is below threshold
C) Always file return
D) Claim refund only

Answer: B
Explanation: Filing is not mandatory if total income does not exceed taxable limit and TDS is
properly deducted.

Q9. Interest on commercial bonds is taxable under:

A) Salary
B) Business income
C) Capital Gains
D) Interest on Securities

Answer: D
Explanation: Commercial bonds issued by any body corporate are taxed under Interest on
Securities.

Q10. Interest income from Bangladesh Bank bills is:

A) Tax-free
B) Exempt if under Tk. 50,000
C) Fully taxable
D) Subject to minimum tax

Answer: C
Explanation: Bangladesh Bank bills generate taxable interest under this head.

Q11. Senior citizen earning interest on savings certificates exceeding exemption limit is taxed:
A) At 5% flat
B) At applicable slab rates
C) Not taxed
D) Only after Tk. 600,000

Answer: B
Explanation: Once total income (including interest) crosses exemption, tax applies at slab rates.

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Q12. Taxpayer receiving net interest (after TDS) should:
A) Declare gross interest and claim TDS
B) Show only net interest
C) Ignore as it’s already taxed
D) File separate annexure

Answer: A
Explanation: Gross interest must be declared; TDS is then deducted from final liability.

Q13. Which of the following is not a security under this head?

A) Treasury bond
B) Prize bond
C) FDR
D) Debenture

Answer: C
Explanation: FDR is not a “security” under section 22; it's taxed under “Other Sources”.

Q14. Income from treasury bills is taxable:

A) Only for companies
B) For all taxpayers
C) Only above Tk. 500,000
D) After 3 years

Answer: B
Explanation: Treasury bill income is taxable for all, unless specifically exempted.

Q15. Deductor must file TDS return for interest payments:

A) Monthly
B) Quarterly
C) Biannually
D) Annually

Answer: B
Explanation: Deductors must file quarterly returns of TDS under section 75A.

Q16. Taxpayer received Tk. 80,000 interest from 10-year Sanchayapatra. What portion is
taxable?
A) Entire amount
B) Tk. 70,000
C) Tk. 50,000
D) Depends on total income

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 Answer: A
Explanation: Entire interest is taxable unless any SRO grants partial exemption.

Q17. A local authority issues bonds and pays interest. This is taxable under:
A) Capital gains
B) Business income
C) Income from interest on securities
D) Exempt income

Answer: C
Explanation: All bond interest, whether from government, local authority, or company, falls
under this head.

Q18. TDS certificate for interest must be issued by the deductor:

A) Within 7 days
B) Within 30 days
C) Within 15 days of deduction
D) At financial year-end

Answer: C
Explanation: Law requires TDS certificate to be provided within 15 days of deduction.

Q19. Interest accrued but not yet paid is:

A) Taxable on due basis
B) Taxable only when received
C) Tax-free until maturity
D) Not considered income

Answer: B
Explanation: Interest on securities is taxable on receipt basis unless previously taxed.

Q20. Resident taxpayer receives tax-free bond interest. What is their tax treatment?
A) Include in total income
B) Declare as exempt income
C) Ignore in return
D) Adjust against expenses

Answer: B
Explanation: Exempt interest income should be declared under exempt income in tax return.
Q21. Tax rate on interest on securities for non-resident individuals is:
A) 10%
B) 15%

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C) 20%
D) 25%

Answer: C
Explanation: Section 50 mandates 20% TDS for non-residents unless a treaty applies.

Q22. Interest on zero-coupon bonds is:

A) Fully exempt
B) Taxable as capital gain
C) Taxable under “Interest on Securities” at maturity
D) Ignored unless sold

Answer: C
Explanation: Interest (difference between issue and maturity) is taxable at maturity.

Q23. If interest is paid net of tax, gross-up for tax is done by:
A) Taxpayer
B) Deductor
C) Auditor
D) NBR

Answer: A
Explanation: Taxpayer must gross-up income in return to show full income and TDS.

Q24. Taxpayer receives Tk. 18,000 net after 10% TDS on interest. What is gross income?
A) Tk. 18,000
B) Tk. 20,000
C) Tk. 22,000
D) Tk. 24,000

Answer: B
Explanation: Gross = Net / (1 – TDS%) = 18,000 / 0.90 = Tk. 20,000.

Q25. Who is exempt from tax on interest income up to Tk. 25,000?

A) Widows and orphans
B) Students
C) Retired armed forces
D) None

Answer: A
Explanation: Certain groups like widows, orphans may be exempt under SROs up to limits.

Q26. Interest received by charitable trust is:

A) Fully exempt

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B) Taxable
C) Partly exempt
D) Taxable unless used for charity

Answer: D
Explanation: If used solely for charitable purposes, it may be exempt under section 44.

Q27. Convertible bond interest is taxed as:

A) Capital gain
B) Business income
C) Interest on Securities
D) Dividend

Answer: C
Explanation: Even if convertible, interest is taxed as interest until conversion.

Q28. Double taxation treaty may reduce tax on interest to:

A) 5%
B) 10%
C) 12%
D) Depends on treaty

Answer: D
Explanation: DTAAs specify concessional rates, often lower than 20%.

Q29. Interest from foreign bonds is taxed as:

A) Foreign income
B) Capital gains
C) Other sources
D) Interest on Securities

Answer: D
Explanation: Foreign securities still fall under this head if structured as bonds.

Q30. TDS on government bond interest is waived for:

A) NGOs
B) Educational institutions
C) All resident individuals
D) None unless SRO applies

Answer: D
Explanation: TDS can only be waived via specific SRO, not general rule.

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 Chapter 05: Income from House Property
Q1. Income from house property is chargeable if:
A) The property is used for business
B) The property is let out or deemed to be let out
C) The property is vacant
D) The property is self-occupied

Answer: B
Explanation: Income from house property is taxable if it is let out or deemed to be let out.

Q2. How many self-occupied properties can be treated as exempt?

A) One
B) Two
C) Three
D) None

Answer: A
Explanation: Only one house used for own residence is exempt; others are treated as deemed let
out.

Q3. Gross annual value is calculated as:

A) Higher of rent received or municipal value
B) Higher of expected rent or actual rent received
C) Lower of municipal and fair rent
D) Always actual rent

Answer: B
Explanation: Gross annual value = higher of expected rent or actual rent received during the
year.

Q4. Standard deduction from Net Annual Value is:

A) 10%
B) 20%
C) 30%
D) 40%

Answer: C
Explanation: Section 24 allows a flat 30% deduction as repair and maintenance expense.

Q5. Interest on borrowed capital for self-occupied property is deductible up to:

A) Tk. 100,000
B) Tk. 200,000

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C) Tk. 500,000
D) Tk. 300,000

Answer: D
Explanation: Maximum Tk. 300,000 allowed for interest on borrowed capital for self-occupied
property.

Q6. Property let out for part of the year is taxed:

A) Proportionately
B) For entire year
C) Only on actual rent received
D) At flat rate

Answer: C
Explanation: In such case, actual rent received/receivable is used.

Q7. Unrealized rent is:

A) Fully exempt
B) Deducted from GAV if conditions met
C) Added to income
D) Ignored

Answer: B
Explanation: Unrealized rent may be deducted from Gross Annual Value if conditions under
Rule 4 are satisfied.

Q8. Municipal taxes paid by tenant are:

A) Allowed as deduction
B) Ignored
C) Added to GAV
D) Deducted from NAV

Answer: C
Explanation: If paid by tenant, it must be added to Gross Annual Value.

Q9. Which of the following is not allowable as deduction?

A) Interest on loan
B) Principal repayment of loan
C) Municipal taxes paid
D) Standard deduction

Answer: B
Explanation: Principal repayment is not allowed under house property head; may be deductible
u/s 44.

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Q10. Income from sub-letting is:
A) Income from house property
B) Income from business
C) Income from other sources
D) Exempt income

Answer: C
Explanation: Sub-letting income is not taxed under house property since tenant is not owner.

Q11. Owner uses part of house for residence and part for business. How is income computed?
A) Entirely under house property
B) Entirely under business
C) Residential part under house property, rest under business
D) Exempt

Answer: C
Explanation: Tax treatment follows use—residential under house property, business under
business income.

Q12. Rent from vacant land is:

A) House property income
B) Business income
C) Capital gain
D) Other sources

Answer: D
Explanation: Income from letting out vacant land is not house property—classified under
“Other Sources”.

Q13. Property given for composite rent (building + services) is taxed as:
A) House property only
B) Business income
C) Other sources
D) Partly house property, partly other sources

Answer: D
Explanation: Rent for building = house property; rent for services = other sources.

Q14. Which of the following is a condition for charging income under house property?
A) Ownership of property
B) Rental use
C) Business use
D) Agricultural use

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 Answer: A
Explanation: Only the owner can be taxed under house property head.

Q15. Property transferred without consideration is taxed in whose hands?

A) Transferee
B) Transferor
C) Both
D) Exempt

Answer: B
Explanation: As per clubbing provisions, if transferred without consideration, income is taxed in
hands of transferor.

Q16. House property used for political party offices is:

A) Fully exempt
B) Taxable
C) Taxable as business
D) Not taxable under house property

Answer: A
Explanation: Exempt under Section 44 for political party activities.

Q17. Vacancy allowance is available when:

A) Entire year is vacant
B) Part of the year is vacant with rent received
C) Property is used for self-occupation
D) Rent is received from relatives

Answer: B
Explanation: Vacancy allowance applies only when part-year rent is received and part is vacant.

Q18. Municipal tax is deducted from:

A) Gross Annual Value
B) Net Annual Value
C) Taxable income
D) Total income

Answer: A
Explanation: It is deducted from GAV to compute Net Annual Value.
Q19. Income from multiple let-out houses is:
A) Taxed together
B) Taxed individually

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C) Exempt
D) Added to salary

Answer: B
Explanation: Each property is assessed separately for income computation.

Q20. Letting of roof for advertisement is taxable as:

A) House property income
B) Business income
C) Other sources
D) Exempt

Answer: C
Explanation: Not covered under “house property”; taxed under “Other Sources”.

Q21. Arrears of rent received are:

A) Ignored
B) Taxed in the year of receipt
C) Spread over past years
D) Tax-free if < Tk. 100,000

Answer: B
Explanation: Arrears are taxed in the year of receipt even if property is no longer owned.

Q22. Rent received in advance is taxable:

A) Over the lease period
B) Fully in the year of receipt
C) After possession
D) Not taxable

Answer: B
Explanation: Rent is taxed on receipt basis even if for future years.

Q23. Pre-construction interest is deductible:

A) Fully in one year
B) Spread over 2 years
C) Spread over 5 years
D) Not deductible

Answer: C
Explanation: Pre-construction interest is allowed in 5 equal installments starting from
completion year.

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Q24. Construction completed in 2019, loan taken in 2017. Pre-construction interest is deductible
from:
A) 2017
B) 2018
C) 2019
D) 2020

Answer: C
Explanation: Deduction starts in the year of completion—2019.

Q25. If fair rent > actual rent, GAV will be:

A) Fair rent
B) Actual rent
C) Higher of both
D) Lower of both

Answer: C
Explanation: Gross Annual Value is higher of expected (fair) or actual rent.

Q26. If rent is unrealized and recovery conditions met:

A) Deduction allowed from GAV
B) Not deductible
C) Deducted from total income
D) Ignored

Answer: A
Explanation: Unrealized rent is deducted from GAV if Rule 4 conditions are met.

Q27. Composite rent without separation of services and property is:

A) Fully house property income
B) Fully business income
C) Fully other sources
D) Taxable as per main purpose

Answer: D
Explanation: Main intention governs head of income in such cases.

Q28. House let to relative without rent is:

A) Exempt
B) Deemed let out
C) Taxed on fair rental value
D) Partly exempt

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 Answer: C
Explanation: Property given rent-free is deemed let out and taxed on fair rent.

Q29. Co-owners of property are taxed:

A) Collectively
B) Individually based on share
C) Only eldest member
D) HUF only

Answer: B
Explanation: Co-owners are taxed individually as per their share in the property.

Q30. If municipal tax is not paid, can it be claimed as deduction?

A) Yes
B) No
C) Partial
D) Only if landlord is resident

Answer: B
Explanation: Only municipal taxes actually paid during the year are deductible.

Chapter 06: Income from Agriculture

Q1. Agricultural income is:
A) Fully exempt under all circumstances
B) Fully taxable
C) Exempt only for individuals
D) Exempt if conditions under Section 4 are met

Answer: D
Explanation: Agricultural income is exempt under Section 4(3), subject to conditions—such as
being derived from land in Bangladesh used for agriculture.

Q2. Agricultural income includes:

A) Salary from agricultural company
B) Rent from letting out farm equipment
C) Income from growing and selling crops
D) Interest on agricultural loans

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 Answer: C
Explanation: Income from land cultivation and sale of produce is considered agricultural
income.

Q3. Agricultural income is defined under which section of the Income Tax Ordinance, 1984?
A) Section 2(15)
B) Section 2(34)
C) Section 2(1)
D) Section 4(3)

Answer: B
Explanation: Section 2(34) defines "agricultural income" under the ordinance.

Q4. Agricultural income must be:

A) Derived from any land
B) Derived from land in Bangladesh used for agriculture
C) Received in cash only
D) Derived from land outside Bangladesh

Answer: B
Explanation: Only income from land situated in Bangladesh and used for agriculture qualifies.

Q5. Rent from agricultural land used for cinema is:

A) Agricultural income
B) Exempt income
C) Taxable under house property
D) Taxable under other sources

Answer: D
Explanation: If land is not used for agricultural purposes, the rent is not agricultural income.

Q6. Agricultural income is exempt for:

A) Individuals only
B) Corporates only
C) All taxpayers
D) Only for residents

Answer: C
Explanation: Agricultural income is exempt for all taxpayers, subject to satisfying defined
conditions.

Q7. Income from poultry farming is:

A) Agricultural income
B) Business income

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C) Other sources
D) Partly agricultural income

Answer: B
Explanation: Poultry is not agriculture per se; hence income from it is business income.

Q8. Income from nursery business is:

A) Always taxable
B) Always exempt
C) Agricultural income if grown on owned/agricultural land
D) Exempt only for small nurseries

Answer: C
Explanation: If nursery plants are grown on agricultural land, the income is exempt as
agricultural income.

Q9. Income from fisheries is treated as:

A) Agricultural income
B) Exempt
C) Business income
D) Income from other sources

Answer: C
Explanation: Fish farming is not agriculture and is taxable as business income.

Q10. Rent received from agricultural land used for agriculture is:
A) Taxable
B) Exempt as agricultural income
C) Exempt up to Tk. 50,000
D) Taxable under other sources

Answer: B
Explanation: Rent derived from agricultural land used for agriculture is treated as agricultural
income and exempt.

Q11. Agricultural income is considered for:

A) Tax calculation
B) Rebate
C) Rate purposes only
D) Exemption only

Answer: C
Explanation: Agricultural income is added for rate purposes if non-agricultural income is
taxable.

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Q12. Income from sale of standing crops is:
A) Agricultural income
B) Capital gain
C) Business income
D) Other sources

Answer: A
Explanation: Sale of standing crops grown on agricultural land qualifies as agricultural income.

Q13. Is rent from agricultural land transferred without consideration taxable?

A) Yes
B) No
C) Taxable in hands of transferor
D) Exempt if used for agriculture

Answer: C
Explanation: Clubbing provisions apply if land is transferred without adequate consideration.

Q14. Which of the following is not agricultural income?

A) Growing rice and selling in market
B) Selling processed fruits after packaging
C) Income from cultivation of vegetables
D) Growing jute and selling raw jute

Answer: B
Explanation: Processing beyond basic operations is business income.

Q15. Agricultural income of a company is:

A) Exempt
B) Taxable
C) Exempt subject to audit
D) Partly exempt

Answer: A
Explanation: There is no restriction on exemption based on type of taxpayer.

Q16. Rent from letting out agricultural implements is:

A) Agricultural income
B) Capital gain
C) Other sources
D) Business income

Answer: C
Explanation: Such income is not derived from land; hence, taxed under “Other Sources”.

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Q17. Agricultural income is exempt provided:
A) No other income exists
B) Return is filed
C) Agricultural activity is real and on record
D) Income does not exceed Tk. 300,000

Answer: C
Explanation: Only genuine agricultural income derived from agricultural land qualifies

Q18. Selling produce after further processing disqualifies it from exemption if:
A) Processing is minimal
B) Processing changes the nature of produce
C) Produce is not sold
D) Land is not irrigated

Answer: B
Explanation: Basic processing is allowed, but extensive processing makes it business income.

Q19. Can a salaried individual have agricultural income exempt?

A) No
B) Yes, but must be under Tk. 100,000
C) Yes, subject to Section 2(34)
D) Only if from father’s land

Answer: C
Explanation: Anyone can claim agricultural income exemption if conditions under Section
2(34) are satisfied.

Q20. If an assessee leases agricultural land to another for cultivation and receives rent, the rent
is:
A) Business income
B) House property income
C) Agricultural income
D) Other sources

Answer: C
Explanation: Rent from agricultural land used for agriculture is considered agricultural income.

Q21. Farming on rented land qualifies for exemption if:

A) Rent is below Tk. 50,000
B) The lease is not registered
C) The income is from actual agricultural activity
D) Rent is paid in kind

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 Answer: C
Explanation: Agricultural activity, not ownership of land, is key to exemption.

Q22. Agricultural income in excess of exemption limit:

A) Is taxed at 10%
B) Is taxed as normal income
C) Is considered for rate purposes if other income exists
D) Is ignored

Answer: C
Explanation: Excess is not taxed directly but affects tax rate on other income.

Q23. Growing and selling tea leaves (unprocessed) is:

A) Exempt
B) Partially exempt
C) Fully taxable
D) Business income

Answer: A
Explanation: Unprocessed tea leaf income is agricultural income and exempt.

Q24. Growing and processing tea (packaging and branding) is:

A) Business income
B) Fully exempt
C) Agricultural income
D) Capital gain

Answer: A
Explanation: Processing adds business element, making income taxable as business income.

Q25. Sale of fruits from trees in home garden is:

A) Capital gain
B) Business income
C) Exempt if land is used primarily for agriculture
D) Other sources

Answer: C
Explanation: If land qualifies as agricultural land, income is exempt.

Q26. Agricultural land located in foreign country:

A) Income is exempt
B) Income is taxable
C) Exempt if remitted
D) Not required to report

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 Answer: B
Explanation: Only income from agricultural land in Bangladesh is exempt.

Q27. Return of income showing only agricultural income is required if:

A) Income is below threshold
B) Income exceeds basic exemption
C) Income exceeds Tk. 500,000
D) Filing is not required

Answer: B
Explanation: Return is required if total income (including exempt agricultural income) exceeds
threshold.

Q28. Tax audit applies to agricultural income if:

A) Land exceeds 5 acres
B) Exemption claimed exceeds Tk. 1,000,000
C) Total income exceeds threshold
D) No audit applies

Answer: C
Explanation: Tax audit applies based on total income, not income type.

Q29. Crops grown for own consumption:

A) Are taxed
B) Are ignored
C) Are exempt agricultural income
D) Must be valued and taxed

Answer: C
Explanation: Agricultural produce consumed by the grower is not taxed.

Q30. Gift of agricultural land with rent receivable is:

A) Transferable and exempt
B) Clubbed in income of transferor
C) Taxed in transferee’s hands
D) Tax-free

Answer: B
Explanation: Clubbing applies if transferred without adequate consideration.

Chapter 07: Income from Business or Profession

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Q1. Income from business or profession is taxable under which section of the Income Tax
Ordinance, 1984?
A) Section 20
B) Section 21
C) Section 28
D) Section 33

Answer: A
Explanation: Section 20 deals with the computation of income from business or profession.

Q2. Business includes:

A) Any occasional activity
B) Any systematic and continuous activity involving profit motive
C) Employment services
D) Lottery winnings

Answer: B
Explanation: Business implies systematic, regular activity with the intention to earn profit.

Q3. Professional income includes:

A) Salary income
B) Commission from agency
C) Fees received by doctors, lawyers, consultants, etc.
D) Interest on capital

Answer: C
Explanation: Professional income arises from personal skills and knowledge (e.g., lawyer’s
fees).

Q4. Which of the following is not allowed as business expense?

A) Interest on business loan
B) Personal expenses
C) Salary to employees
D) Rent paid for office

Answer: B
Explanation: Personal expenses are specifically disallowed under Section 30.

Q5. Preliminary expenses can be amortized over:

A) 2 years
B) 3 years
C) 5 years
D) 10 years

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 Answer: C
Explanation: Preliminary expenses can be amortized over five years under Section 29.

Q6. Expenses not supported by proper documentation:

A) Fully allowed
B) Partly allowed
C) Disallowed
D) Deferred

Answer: C
Explanation: Deductions require proper substantiation.

Q7. Which of the following is not considered as business income?

A) Sale of goods
B) Professional fees
C) Capital gain
D) Commission from distribution

Answer: C
Explanation: Capital gain is taxed under a separate head.

Q8. Allowance for depreciation is calculated as per:

A) Market value
B) Book value
C) Written down value method
D) Replacement cost

Answer: C
Explanation: Depreciation is allowed on WDV method for eligible business assets.

Q9. Provision for doubtful debts is:

A) Allowed fully
B) Not allowed
C) Allowed only when written off
D) Partially allowed

Answer: C
Explanation: Only actual bad debts written off are deductible.

Q10. Speculative business income is:

A) Treated separately
B) Clubbed with other business
C) Exempt
D) Treated as capital gain

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 Answer: A
Explanation: Speculative transactions are separately treated under tax law.

Q11. Income from renting machinery is:

A) Business income
B) House property
C) Capital gains
D) Other sources

Answer: A
Explanation: Renting machinery is considered business if regular and systematic.

Q12. Loss from business can be carried forward for:

A) 3 years
B) 4 years
C) 6 years
D) 8 years

Answer: D
Explanation: Business loss can be carried forward up to 6 assessment years.

Q13. Professional income is chargeable on:

A) Cash basis only
B) Accrual basis
C) Either cash or accrual
D) As per NBR circular

Answer: C
Explanation: Assessee can choose the method (cash/accrual) consistently.

Q14. Disallowable expenses include:

A) Donation to political party
B) Office rent
C) Cost of raw materials
D) Salary to workers

Answer: A
Explanation: Certain donations and penalties are disallowed under tax law

Q15. Capital expenditure is:

A) Fully deductible
B) Partly deductible
C) Not deductible
D) Deductible in year of payment

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 Answer: C
Explanation: Capital expenditure is not deductible as revenue expense.

Q16. Audit report is mandatory if turnover exceeds:

A) Tk. 30 lakh
B) Tk. 50 lakh
C) Tk. 3 crore
D) Tk. 5 crore

Answer: B
Explanation: Audit is mandatory if annual turnover exceeds Tk. 50 lakh (varies by sector).

Q17. Accounting method once chosen must be:

A) Changed every year
B) Changed with approval
C) Followed consistently
D) Ignored in special cases

Answer: C
Explanation: Accounting method must be consistent for correct assessment.

Q18. Advance against supply is:

A) Revenue
B) Deferred income
C) Liability until supply
D) Tax-free

Answer: C
Explanation: It is not income until supply is made.

Q19. Expenditure on scientific research is:

A) Not allowed
B) Fully deductible
C) Allowed up to 50%
D) Treated as capital

Answer: B
Explanation: R&D expenditure is fully deductible if directly related to business.

Q20. Remuneration to partners is allowed if:

A) Partnership is oral
B) Remuneration is in writing in deed
C) Deed is not registered
D) Amount is arbitrary

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 Answer: B
Explanation: Only remuneration authorized in partnership deed is allowed.

Q21. Personal drawings by proprietor are:

A) Allowed expense
B) Capital expense
C) Disallowed
D) Exempt

Answer: C
Explanation: Drawings are not expenses—they are personal and disallowed.

Q22. Cash expense over Tk. 500,000 is disallowed unless:

A) Paid via bank
B) Paid in small amounts
C) Paid to employees
D) Paid to foreign suppliers

Answer: A
Explanation: Expenses above Tk. 500,000 must be made via banking channel to be allowed.

Q23. Business income of a company is taxed at:

A) Individual slab
B) 25%
C) 35%
D) Applicable corporate tax rate

Answer: D
Explanation: Companies pay tax at the prescribed corporate rate (varies by sector/type).

Q24. Business loss cannot be set off against:

A) Salary income
B) Other business income
C) Capital gains
D) Both A and C

Answer: D
Explanation: Business loss cannot be adjusted against salary or capital gains.

Q25. Income from gambling is:

A) Business income
B) Other sources
C) Speculative business
D) Exempt

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 Answer: B
Explanation: Gambling income is treated as “Other Sources”, not business.

Q26. Depreciation is allowed only if:

A) Asset is owned
B) Asset is used in business
C) Both A and B
D) Declared in return

Answer: C
Explanation: Both ownership and usage in business are required for depreciation.

Q27. Which expense is disallowed if TDS is not deducted?

A) Salary
B) Rent
C) Commission
D) All of the above

Answer: D
Explanation: All expenses where TDS is applicable are disallowed if TDS is not deducted.

Q28. Provision for gratuity is:

A) Fully allowed
B) Not allowed
C) Allowed if funded and actuarially valued
D) Allowed at 50%

Answer: C
Explanation: Provision for gratuity is allowed if ascertained via actuarial valuation and funded.

Q29. Professional income received in advance is:

A) Taxed in year of receipt
B) Deferred
C) Not taxed
D) Spread over years

Answer: A
Explanation: Professional income is taxed when received, unless using accrual method.

Q30. Compensation received for cancellation of business contract is:

A) Exempt
B) Capital gain
C) Business income
D) Other sources

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 Answer: C
Explanation: Compensation linked to business activity is taxed as business income.

Chapter 08: Capital Gains

Q1. Capital gains arise from:
A) Sale of goods
B) Transfer of capital asset
C) Business income
D) Agricultural activity

Answer: B
Explanation: Capital gain arises from the transfer (sale, exchange, relinquishment) of a capital
asset.

Q2. Capital asset includes:

A) Stock-in-trade
B) Personal car
C) Shares and securities
D) Growing crops

Answer: C
Explanation: Capital assets include property such as shares, bonds, land, and buildings but not
personal effects or stock-in-trade.

Q3. Capital asset does not include:

A) Land held for investment
B) Personal effects
C) Shares
D) Goodwill

Answer: B
Explanation: Personal effects (excluding jewellery, drawings, etc.) are not capital assets under
tax law.

Q4. Which of the following qualifies as a long-term capital asset?

A) Shares held for 6 months
B) Land held for 2 years
C) Jewellery held for 1 year
D) Inventory

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 Answer: B
Explanation: Land held for more than 12 months (depending on rules) is generally considered a
long-term capital asset.

Q5. Capital gains are taxable under:

A) Section 20
B) Section 31
C) Section 32
D) Section 34

Answer: C
Explanation: Section 32 of the ITO, 1984 deals with the taxation of capital gains.

Q6. Indexed cost of acquisition is allowed for:

A) Depreciable assets
B) Short-term assets
C) Long-term assets
D) Goodwill

Answer: C
Explanation: Indexation benefit is allowed for long-term capital assets to adjust inflation.

Q7. What is the holding period for short-term capital asset (for land/building)?
A) Up to 6 months
B) Up to 1 year
C) Up to 3 years
D) Up to 12 months

Answer: D
Explanation: Holding less than 12 months is considered short-term (as per Bangladeshi law for
many assets).

Q8. Capital gain on transfer of agricultural land in rural area is:

A) Fully taxable
B) Exempt
C) Partly taxable
D) Taxed as other sources

Answer: B
Explanation: Agricultural land in rural areas is not considered a capital asset and hence, exempt.

Q9. Capital gain on transfer of residential building held for 3 years is:
A) Short-term
B) Long-term

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C) Exempt
D) Partly taxable

Answer: B
Explanation: More than 12 months makes it long-term under current rules.

Q10. Which of the following is considered transfer?

A) Sale
B) Exchange
C) Relinquishment
D) All of the above

Answer: D
Explanation: All these activities are treated as transfer under capital gains head.

Q11. Exemption under Section 19AAA is available for:

A) Agricultural income
B) Capital gains on sale of shares listed on stock exchange
C) Interest income
D) Salary income

Answer: B
Explanation: Listed share transactions under certain conditions are exempt under section
19AAA.

Q12. Capital gain from sale of shares (held over 1 year) by individual is:
A) Fully taxable
B) Partially exempt
C) Fully exempt if sold through stock exchange
D) Exempt only for NRIs

Answer: C
Explanation: Gains from listed shares sold through stock exchange with DSE transaction tax are
exempt under section 19AAA.

Q13. Cost of improvement is deductible in:

A) Capital gain computation
B) Business income
C) Salary income
D) Other sources

Answer: A
Explanation: Cost of improvement enhances the asset’s value and is deductible when
calculating capital gains.

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Q14. Sale of depreciable assets results in:
A) Capital gain
B) Business income
C) Short-term capital gain
D) Balancing adjustment

Answer: B
Explanation: Gains from sale of depreciable assets used in business are treated as business
income.

Q15. If consideration is less than stamp duty value, which is taken as sale value?
A) Actual consideration
B) Stamp duty value
C) Book value
D) Indexed cost

Answer: B
Explanation: For tax computation, stamp duty value is considered if it exceeds actual sale price.

Q16. Capital loss can be carried forward for:

A) 2 years
B) 4 years
C) 6 years
D) 8 years

Answer: C
Explanation: Capital losses can be carried forward for 6 years.

Q17. Short-term capital loss can be set off against:

A) Short-term gains only
B) Long-term gains only
C) Both STCG and LTCG
D) Not allowed

Answer: C
Explanation: STCL can be set off against both STCG and LTCG.

Q18. Long-term capital loss can be set off against:

A) Short-term capital gains
B) Long-term capital gains only
C) Other income
D) Not allowed

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 Answer: B
Explanation: LTCL can only be set off against LTCG.

Q19. Which is not a capital asset?

A) Jewellery
B) Agricultural land in rural area
C) Shares
D) Paintings

Answer: B
Explanation: Agricultural land in rural areas is excluded from the definition of capital assets.

Q20. In case of inherited property, cost of acquisition is:

A) Zero
B) Current market price
C) Cost to the previous owner
D) Book value

Answer: C
Explanation: Cost of acquisition is taken as the cost to the previous owner.

Q21. Advance money forfeited on cancelled property deal is:

A) Capital gain
B) Income from other sources
C) Reduced from cost of acquisition
D) Exempt

Answer: C
Explanation: Forfeited advances reduce the cost of acquisition in future capital gain
computation.

Q22. Transfer of capital asset to relative without consideration is:

A) Taxable
B) Not a transfer
C) Partly taxable
D) Exempt only if under will

Answer: B
Explanation: Gifts to relatives are not considered transfers; hence, no capital gain arises.
Q23. Exemption on reinvestment in residential house is available under:
A) Section 19
B) Section 19AAA

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C) Section 44
D) Section 38

Answer: A
Explanation: Reinvestment exemption is under Section 19 of the ITO, 1984.

Q24. Indexation is applied to:

A) Sale value
B) Cost of acquisition
C) Capital gain
D) Stamp duty value

Answer: B
Explanation: Indexation applies to the cost of acquisition to adjust for inflation.

Q25. Capital gains from sale of factory building used for business is:
A) Business income
B) Capital gain
C) Not taxable
D) Depreciable asset – business treatment

Answer: D
Explanation: If depreciable, gain is considered under business head, not capital gain.

Q26. Transfer of share by gift is:

A) Transfer
B) Not transfer
C) Partially transfer
D) Taxable under other sources

Answer: B
Explanation: Gifts are excluded from the definition of transfer under capital gains.

Q27. For listed securities, if STT is paid:

A) Capital gain is exempt
B) TDS is applicable
C) Capital loss not allowed
D) Must be declared as other sources

Answer: A
Explanation: Listed securities with STT/DSE tax paid are exempt under certain sections.

Q28. Consideration from compulsory acquisition of land is:

A) Exempt

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B) Taxable in year of receipt
C) Exempt if used to buy bonds
D) Not taxable

Answer: B
Explanation: Capital gains from compulsory acquisition are taxed in year of receipt.

Q29. What is cost of bonus shares?

A) Market value
B) Zero
C) Face value
D) Cost to company

Answer: B
Explanation: Bonus shares are allotted free of cost—cost of acquisition is zero.

Q30. Capital gain from sale of inherited house is:

A) Exempt
B) Business income
C) Taxable capital gain
D) Not taxable if sold within 1 year

Answer: C
Explanation: Inherited property is taxable on sale; acquisition date is of original owner.

Chapter 09: Income from Other Sources

Q1. Income from other sources is a:
A) Primary head of income
B) Residual head
C) Exempt income category
D) Capital head

Answer: B
Explanation: "Income from other sources" is a residual head, covering income not classified
under other heads.

Q2. Dividend received from a domestic company is:

A) Fully exempt
B) Taxable at regular rates
C) Taxable with 20% rebate
D) Subject to separate rate

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 Answer: D
Explanation: Dividends are taxed at a fixed rate (e.g., 20% or as per current Finance Act).

Q3. Interest on fixed deposits in banks is taxable under:

A) Salaries
B) Business income
C) Capital gains
D) Other sources

Answer: D
Explanation: Interest from FDRs is not business or salary income—it's taxable under "Other
Sources".

Q4. Casual income includes:

A) Salary
B) Rent
C) Lottery winnings
D) Bonus

Answer: C
Explanation: Casual income includes windfall gains like lottery or game show winnings.

Q5. Tax rate on lottery winnings is:

A) Normal slab rate
B) 10%
C) 20%
D) 30%

Answer: D
Explanation: Lottery winnings are taxed at a flat 30%, not at slab rate.

Q6. If a gift of Tk. 100,000 is received from a non-relative:

A) It is exempt
B) Fully taxable
C) Partly exempt
D) Taxable only if above Tk. 500,000

Answer: B
Explanation: Gifts from non-relatives are fully taxable if over Tk. 50,000.
Q7. Income from letting of machinery is taxable under:
A) Capital gains
B) Business income

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C) Other sources (if not part of business)
D) Exempt income

Answer: C
Explanation: If not a regular business, such income is taxed under "Other Sources".

Q8. Family pension received by legal heir is:

A) Salary income
B) Exempt
C) Other sources
D) Business income

Answer: C
Explanation: Family pension is taxed under "Other Sources", not salary.

Q9. Clubbing provisions apply to:

A) Income from other sources only
B) Income transferred to spouse or minor
C) Government pensions
D) Capital gains

Answer: B
Explanation: Income transferred to spouse/minor without adequate consideration is clubbed
with transferor’s income.

Q10. Agricultural income from land outside Bangladesh is:

A) Exempt
B) Taxable under other sources
C) Taxable under agriculture
D) Ignored

Answer: B
Explanation: Only agricultural income from Bangladesh is exempt. Foreign agriculture income
is taxed under "Other Sources".

Q11. Remuneration received by a part-time director is:

A) Salary income
B) Other sources
C) Business income
D) Capital gain

Answer: B
Explanation: Part-time directors are not employees, so remuneration is taxed under “Other
Sources”.

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Q12. Dividend from mutual funds is:
A) Exempt
B) Taxable under business
C) Taxable under other sources
D) Taxable under capital gains

Answer: C
Explanation: Dividend (other than exempt categories) is taxed under "Other Sources".

Q13. Advance money forfeited for failure of property buyer is:

A) Capital gain
B) Business income
C) Other sources
D) Tax-free

Answer: C
Explanation: Such forfeited advances are taxable under "Other Sources".

Q14. Income from crossword puzzles is:

A) Salary
B) Business
C) Capital gain
D) Other sources

Answer: D
Explanation: Prize money from crossword puzzles is taxed under "Other Sources".

Q15. TDS on interest from FDR for individuals is:

A) 5%
B) 10%
C) 15%
D) 20%

Answer: B
Explanation: Typically, TDS on bank FDR interest for individuals is 10% (subject to Finance
Act provisions).

Q16. Gifts from relatives are:

A) Fully taxable
B) Fully exempt
C) Taxable above Tk. 50,000
D) Exempt up to Tk. 100,000

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 Answer: B
Explanation: Gifts from relatives are fully exempt regardless of amount.

Q17. Income from sub-letting by tenant is:

A) House property
B) Business income
C) Capital gains
D) Other sources

Answer: D
Explanation: Since tenant is not the owner, sub-letting income is taxed under “Other Sources”.

Q18. Any income not covered under other heads is:

A) Exempt
B) Deferred
C) Taxed under “Other Sources”
D) Not taxed

Answer: C
Explanation: Residual income is taxed under “Other Sources”.

Q19. For a gift to be exempt, the donor must be:

A) A friend
B) Any person
C) A relative as defined by law
D) Anyone residing in Bangladesh

Answer: C
Explanation: Gifts from “relatives” as defined in the Act are fully exempt.

Q20. Compensation received for loss of source of income is:

A) Capital gain
B) Other sources
C) Business income
D) Exempt

Answer: B
Explanation: Such compensation is treated as income under “Other Sources”.

Q21. Winnings from TV game shows are taxed at:

A) Normal rate
B) 10%
C) 30% flat
D) Exempt

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 Answer: C
Explanation: Game show winnings are taxed at a flat 30% without any deductions.

Q22. Interest received on compensation amount is:

A) Exempt
B) Taxed as capital gain
C) Taxed under other sources
D) Ignored

Answer: C
Explanation: Interest component on compensation is treated as “Other Sources”.

Q23. TDS on lottery winnings is:

A) 20%
B) 30%
C) 10%
D) Not applicable

Answer: B
Explanation: Flat 30% TDS is applicable on lottery/casual winnings.

Q24. Clubbing of minor’s income applies to:

A) Any income
B) Business income
C) Salary
D) Passive income like interest

Answer: D
Explanation: Passive income of a minor (interest, etc.) is clubbed with the parent’s income.

Q25. Annuity received from a trust is:

A) Business income
B) Other sources
C) Salary
D) Exempt

Answer: B
Explanation: Annuity income is generally taxed under “Other Sources”.

Q26. If a person receives a watch worth Tk. 80,000 as gift from a non-relative:
A) It is exempt
B) Taxable at fair market value
C) Partially taxable
D) Ignored

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 Answer: B
Explanation: Movable property received from a non-relative is taxable at fair market value if
above Tk. 50,000.

Q27. Income from letting of plant and machinery is:

A) Always business income
B) House property
C) Capital gain
D) Other sources if not regular business

Answer: D
Explanation: Occasional rental income from machinery is “Other Sources”.

Q28. Interest on unsecured loan to friend is:

A) Exempt
B) Business income
C) Other sources
D) Not taxable

Answer: C
Explanation: Interest income from personal lending is taxable under “Other Sources”.

Q29. Casual income is:

A) Recurring income
B) Exempt
C) One-time windfall gain
D) Salary

Answer: C
Explanation: Casual income includes prizes, lotteries—one-time, uncertain incomes.

Q30. Clubbing does not apply when:

A) Gift is given to minor child
B) Minor earns from skill
C) Transfer of income without asset
D) Income is transferred to spouse

Answer: B
Explanation: Minor’s personal skill-based income is not clubbed; it is taxed in minor's hands.

Chapter 10: Computation of Total Income

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Q1. Total income is computed by:
A) Adding gross income only
B) Deducting expenses from business income
C) Aggregating income under all heads and deducting admissible allowances
D) Taking exempt income only

Answer: C
Explanation: Total income = Sum of income under all heads – admissible deductions and
allowances.

Q2. Income tax is levied on:

A) Gross receipts
B) Net profit
C) Total income
D) Gross total income

Answer: C
Explanation: Tax is levied on total income after all permissible deductions.

Q3. Which of the following is not an admissible deduction from total income?
A) Investment rebate
B) Allowable business expenses
C) Unabsorbed depreciation
D) Personal expenses

Answer: D
Explanation: Personal expenses are not deductible under the Income Tax Ordinance.

Q4. Agricultural income is:

A) Included in total income
B) Completely exempt and excluded from total income
C) Taxed at normal rates
D) Taxed only if exceeds Tk. 300,000

Answer: B
Explanation: Agricultural income from Bangladesh is exempt and excluded from total income.

Q5. Set-off of losses is allowed:

A) Only within the same head
B) Against all heads except salary
C) Only for capital losses
D) Under any head without restriction

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 Answer: B
Explanation: Loss from one head can be set off against another, except salary (with some
conditions).

Q6. Loss from house property can be set off against:

A) Salary only
B) Capital gain only
C) Any other income head
D) Other house property income only

Answer: C
Explanation: House property loss can be set off against any income head.

Q7. Capital loss can be set off only against:

A) Salary
B) Capital gain
C) Business income
D) Any head

Answer: B
Explanation: Capital losses are restricted to adjustment against capital gains only.

Q8. If total income is negative, tax payable is:

A) Minimum tax
B) Zero
C) Calculated on notional income
D) Tk. 500 fixed

Answer: B
Explanation: If there's no taxable income, there’s no tax payable (subject to minimum tax rules).

Q9. Return of income is filed on the basis of:

A) Assessment year
B) Calendar year
C) Accounting year
D) Quarterly reports

Answer: A
Explanation: Income is assessed for the “Assessment Year” following the income year.
Q10. Business income of a partnership is assessed:
A) In the hands of firm
B) In the hands of partners

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C) In hands of senior partner
D) Exempt

Answer: A
Explanation: The firm is assessed as a separate tax entity.

Q11. Deductions under Section 44 relate to:

A) Investment tax credit
B) Business expenses
C) Allowable tax rebates and exemptions
D) Minimum tax

Answer: C
Explanation: Section 44 allows exemptions, rebates, and deductions such as for investment,
gratuity, donations, etc.

Q12. Adjusted total income is:

A) Before deducting exemptions
B) Before adding exempt income
C) After deducting business loss
D) Income used to compute investment rebate

Answer: D
Explanation: Adjusted total income is used to determine the maximum investment rebate
allowable.

Q13. Which is not included in total income?

A) Rent from house property
B) Capital gain
C) Agriculture income from India
D) Salary income

Answer: C
Explanation: Foreign agricultural income is taxable but not under exempt “agricultural” head.

Q14. Unabsorbed depreciation can be carried forward:

A) For 4 years
B) For 6 years
C) For unlimited years
D) Cannot be carried forward

Answer: C
Explanation: Unlike business losses, depreciation can be carried forward indefinitely.

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Q15. Which of the following is allowed as rebate, not deduction?
A) Investment in DPS
B) House rent
C) Bonus
D) Electricity bill

Answer: A
Explanation: Investment in approved savings qualifies for rebate, not deduction.

Q16. Total income is rounded off to:

A) Nearest 10
B) Nearest 100
C) Nearest 1,000
D) Exact paisa

Answer: C
Explanation: Total income is rounded off to the nearest Tk. 1,000 for tax computation.

Q17. Relief under Section 82C applies to:

A) Business income
B) Capital gains
C) Minimum tax (withholding) adjustment
D) Partnership firms only

Answer: C
Explanation: 82C allows for final settlement of taxes deducted at source under certain sections.

Q18. Business loss can be carried forward for:

A) 4 years
B) 6 years
C) 8 years
D) Unlimited years

Answer: B
Explanation: Business loss can be carried forward and set off within 6 years.

Q19. Investment allowance is:

A) Deduction from total income
B) Exemption
C) Rebate from tax payable
D) Refundable credit

Answer: C
Explanation: Investment allowance is a rebate, not a deduction from income.

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Q20. Loss from speculation business can be adjusted against:
A) Any business income
B) Capital gain
C) Only speculative business income
D) House property income

Answer: C
Explanation: Speculative losses are restricted to speculative gains only.

Q21. Relief u/s 82C can be claimed if:

A) TDS exceeds tax payable
B) Return not filed
C) Assessment completed
D) Refund is denied

Answer: A
Explanation: If TDS exceeds tax liability, the excess can be treated as final settlement under
section 82C.

Q22. Clubbing of spouse’s income applies if:

A) Gift is made to spouse and income arises from it
B) Spouse earns from job
C) Spouse owns inherited property
D) Both have separate income

Answer: A
Explanation: Income from an asset transferred to spouse without consideration is clubbed with
transferor.

Q23. Rebate on investment is allowed under which section?

A) 44
B) 19
C) 82C
D) 51

Answer: A
Explanation: Investment rebate falls under Section 44.

Q24. For individual taxpayer, total income includes:

A) Salary + Business + Capital gains + Other sources
B) Only salary and house property
C) Capital income only
D) Business and exempt income only

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 Answer: A
Explanation: All heads of income contribute to total income.

Q25. Which of the following is not taxable income?

A) Salary
B) Lottery prize
C) Gift from employer
D) Agricultural income in Bangladesh

Answer: D
Explanation: Agricultural income from land in Bangladesh is exempt.

Q26. Income of minor child is clubbed with parent except:

A) Salary income
B) Professional income from skill
C) Gifted income
D) Interest income

Answer: B
Explanation: Minor’s income from talent/skill is not clubbed.

Q27. Rebate on investment is allowed on:

A) Gross total income
B) Adjusted total income
C) Tax payable
D) Net income

Answer: C
Explanation: Investment rebate is calculated and reduced from tax payable.

Q28. Final tax liability is computed on:

A) Gross income
B) Net business profit
C) Total income after rebates and credits
D) Capital gains only

Answer: C
Explanation: Tax is calculated on total income after applying applicable rebates.

Q29. Relief under section 82C is not available for:

A) Salary income
B) Export commission
C) Advertisement payments
D) House rent

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 Answer: A
Explanation: Section 82C doesn’t cover salary; salary TDS is not final discharge.

Q30. An assesse has total income of Tk. 700,000 and investment of Tk. 150,000. What is the
maximum investment rebate (assuming 15%)?
A) Tk. 22,500
B) Tk. 105,000
C) Tk. 150,000
D) Tk. 30,000

Answer: A
Explanation: Rebate = 15% of Tk. 150,000 = Tk. 22,500.

Chapter 11: Tax Liability and Rebates

Q1. Income tax for an individual is computed on:
A) Gross receipts
B) Net business income only
C) Total income after rebate
D) Total income before rebate

Answer: D
Explanation: Tax is first calculated on total income. Rebates are applied afterward to reduce the
final tax liability.

Q2. The basic tax-free threshold for male/female individual (non-senior) is:
A) Tk. 250,000
B) Tk. 300,000
C) Tk. 350,000
D) Tk. 400,000

Answer: B
Explanation: As per recent Finance Acts, the threshold is typically Tk. 300,000 for general
individuals (subject to change annually).

Q3. Senior citizen’s tax-free threshold is:

A) Tk. 300,000
B) Tk. 350,000
C) Tk. 400,000
D) Tk. 500,000

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 Answer: C
Explanation: Senior citizens (above 65 years) generally enjoy a higher tax-free threshold.

Q4. Maximum investment rebate allowable is:

A) 10% of total income
B) 20% of total income
C) 20% of eligible investment
D) 15% of eligible investment

Answer: D
Explanation: The rebate rate is 15% of allowable investments, subject to a maximum percentage
of total income.

Q5. Minimum tax for individual taxpayers engaged in business is:

A) Tk. 5,000
B) Tk. 2,000
C) Tk. 3,000
D) Depends on location/turnover

Answer: D
Explanation: Minimum tax is based on location and nature of business/turnover as per Schedule
of Minimum Tax.
Q6. Tax rebate under Section 44 applies to:
A) Taxable income
B) Gross receipts
C) Tax payable
D) Business turnover

Answer: C
Explanation: Rebate is subtracted directly from tax payable, not from income.

Q7. Tax rebate for disabled taxpayer is:

A) Tk. 10,000
B) 10% of income
C) Tk. 50,000
D) 75% of tax or Tk. 120,000, whichever is less

Answer: D
Explanation: This is a fixed rebate limit offered to disabled individuals.

Q8. Rebate for parents/legal guardians of disabled persons is allowed up to:

A) Tk. 25,000
B) Tk. 50,000

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C) Tk. 75,000
D) Tk. 120,000

Answer: D
Explanation: Rebate equal to 75% of actual tax or Tk. 120,000, whichever is lower, is allowed.

Q9. If tax payable is less than minimum tax, the taxpayer:

A) Pays the lower amount
B) Pays the average
C) Pays the minimum tax
D) Gets exemption

Answer: C
Explanation: Minimum tax is the least amount payable regardless of calculated tax liability.

Q10. Tax rate on dividend income (for individual) is:

A) Normal rate
B) 20%
C) 10%
D) Fixed as per Finance Act

Answer: D
Explanation: Dividend income is taxed at a fixed rate defined annually in the Finance Act.

Q11. Investment rebate is not allowed on:

A) DPS
B) Life insurance
C) Bank FDR
D) Contribution to GPF

Answer: C
Explanation: Interest-bearing bank FDRs do not qualify for investment rebate.

Q12. Surcharge is applicable if total income exceeds:

A) Tk. 2 million
B) Tk. 3 million
C) Tk. 10 million
D) Tk. 8 million

Answer: C
Explanation: Surcharge applies if income exceeds Tk. 10 million, at specified rates.

Q13. Minimum tax for companies is calculated on:

A) Total income

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B) Gross receipts
C) Business profit
D) Book profit

Answer: B
Explanation: Minimum tax for companies is usually based on gross receipts, not income.

Q14. Individual taxpayer living in Dhaka City Corporation area has minimum tax of:
A) Tk. 3,000
B) Tk. 5,000
C) Tk. 4,000
D) Tk. 6,000

Answer: B
Explanation: Tax zones like Dhaka have fixed minimum tax (e.g., Tk. 5,000), unless otherwise
changed.

Q15. Exemption from surcharge is allowed for:

A) Salaried individuals
B) Taxpayers with no capital assets
C) Disabled taxpayers
D) Foreign nationals

Answer: C
Explanation: Disabled and war-wounded taxpayers are usually exempt from surcharge.

Q16. Rebate is available for investment in:

A) Car purchase
B) NSC (National Savings Certificate)
C) Gift to spouse
D) Agricultural land

Answer: B
Explanation: Investments in NSC qualify for rebate under Section 44.

Q17. Rate of tax on total income above Tk. 30 lakh (for individuals) is:
A) 20%
B) 25%
C) 10%
D) 15%

Answer: A
Explanation: As per the progressive tax slab system, 20% is applicable above certain thresholds
(subject to Finance Act).

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Q18. Which of the following is not a tax rebate-eligible investment?
A) Life insurance premium
B) Shares of listed companies
C) NSC
D) Cash deposits in current account

Answer: D
Explanation: Cash in current accounts is not a qualified investment for rebate purposes.

Q19. Final tax liability is calculated after:

A) Deducting all exemptions
B) Applying minimum tax
C) Adjusting TDS and rebates
D) Deducting salary

Answer: C
Explanation: Final tax = tax on total income – rebates – TDS – advance tax (if any).

Q20. Taxpayer with investment income only must:

A) Pay 15% tax flat
B) Claim minimum tax
C) File return and pay tax on slab
D) Not required to file

Answer: C
Explanation: Even if income is only from investment (e.g., FDR), return is mandatory if income
exceeds threshold.

Q21. Investment rebate is allowed only if return is:

A) Filed online
B) Filed manually
C) Filed on time
D) Certified by CA

Answer: C
Explanation: Late filing disqualifies taxpayer from claiming investment rebate.

Q22. Minimum tax is waived if:

A) Assessee is below 18
B) Assessee is a war-wounded freedom fighter
C) Assessee is a company
D) Income is below threshold

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 Answer: B
Explanation: War-wounded freedom fighters are exempt from minimum tax under special
provisions.

Q23. Medical expenditure tax rebate is allowed for:

A) All taxpayers
B) Senior citizens only
C) Disabled individuals
D) None since it is abolished

Answer: D
Explanation: Medical expenditure rebate has been discontinued in recent Finance Acts.

Q24. Rebate on Zakat donation is:

A) Allowed
B) Disallowed
C) Allowed if paid through bank
D) Allowed up to Tk. 20,000

Answer: B
Explanation: Zakat donation is not eligible for tax rebate (unless specifically notified).

Q25. Maximum eligible investment for rebate is:

A) 20% of gross salary
B) Tk. 500,000
C) 25% of total income
D) 20% of total income

Answer: D
Explanation: Eligible investment is limited to 20% of total income.

Q26. Rebate for investment in listed shares is allowed only if:

A) Shares held for more than 1 year
B) TIN is available
C) Shares bought through stock exchange
D) Broker is registered

Answer: C
Explanation: Investment in shares is allowed for rebate if done through stock exchange.
Q27. Exemption limit for war-wounded freedom fighter is:
A) Tk. 500,000
B) Tk. 400,000

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C) Tk. 475,000
D) Tk. 475,000 + full tax exemption

Answer: D
Explanation: War-wounded freedom fighters get higher exemption limit and usually full
exemption on income.

Q28. Rebate is not allowed on:

A) Tuition fees
B) Life insurance premium
C) DPS savings
D) Purchase of savings certificate

Answer: A
Explanation: Tuition fees do not fall under eligible investments for rebate.

Q29. A salaried person with only salary income above exemption limit must:
A) File return and pay slab-wise tax
B) Pay minimum tax
C) File return only if employer fails to deduct
D) Not file if tax deducted

Answer: A
Explanation: All individuals with taxable income must file return even if TDS is done.

Q30. If tax rebate exceeds tax payable:

A) Rebate is carried forward
B) Refund is issued
C) Excess is ignored
D) Minimum tax is levied

Answer: C
Explanation: Rebate cannot exceed tax payable—any excess rebate is ignored.

Chapter 12: Return of Income and Assessment Procedure

Q1. A return of income must be filed by an individual if total income exceeds:
A) Tk. 100,000
B) Tk. 250,000
C) Tk. 300,000
D) The basic exemption limit applicable to the individual

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 Answer: D
Explanation: Filing is mandatory if total income exceeds the applicable exemption limit (e.g.,
Tk. 300,000 for most individuals).

Q2. Due date for filing individual tax return is:

A) 30th June
B) 31st March
C) 30th September
D) 30th November

Answer: D
Explanation: Typically, the due date is 30th November of the assessment year (may vary by
Finance Act).
Q3. Assessment year refers to:
A) The year income is earned
B) The financial year following the income year
C) Calendar year
D) None of the above

Answer: B
Explanation: Assessment year is the year immediately following the income year.
Q4. If return is not filed within the due date, the consequence is:
A) No penalty
B) Only interest
C) Penalty and interest may be imposed
D) Rebate allowed

Answer: C
Explanation: Late filing may result in both interest and penalties as per Sections 124 and 126.

Q5. Universal self-assessment scheme is applicable to:

A) Companies only
B) Only salaried persons
C) All taxpayers except those with audit requirements
D) Only government employees

Answer: C
Explanation: Universal self-assessment is open to most taxpayers, except those with conditions
requiring audit or special scrutiny
Q6. Revised return can be filed:
A) Any time after return

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B) Only before the assessment is completed
C) Within 12 months from end of assessment year
D) Not allowed

Answer: B
Explanation: Revised return is allowed before completion of assessment, if original return was
filed on time.
Q7. Notice for scrutiny assessment is issued under:
A) Section 83
B) Section 93
C) Section 75
D) Section 82C

Answer: A
Explanation: Section 83 allows the DCT to scrutinize a return through a formal assessment
process.

Q8. Assessment made without calling the assessee is called:

A) Summary assessment
B) Scrutiny assessment
C) Best judgment assessment
D) Spot assessment

Answer: A
Explanation: Summary assessment is completed without hearing the assessee, based on
documents filed.

Q9. Spot assessment is done under:

A) Section 83
B) Section 85
C) Section 84
D) Section 82

Answer: C
Explanation: Section 84 permits on-the-spot assessments for mobile/temporary businesses.

Q10. Return filed without digital certificate or signature is:

A) Invalid
B) Accepted
C) Rejected immediately
D) Deemed defective

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 Answer: D
Explanation: It is treated as defective unless corrected within the time allowed.

Q11. Tax audit is mandatory if turnover exceeds:

A) Tk. 10 lakh
B) Tk. 50 lakh
C) Tk. 2 crore
D) Tk. 3 crore

Answer: B
Explanation: Taxpayers with turnover exceeding Tk. 50 lakh must submit audited accounts (as
per current rules).

Q12. Return can be filed online via:

A) Bangladesh Bank
B) BIDA portal
C) NBR portal (eReturn)
D) BTRC portal

Answer: C
Explanation: Returns are filed digitally via NBR’s eReturn portal.

Q13. Who can verify an individual’s return?

A) Chartered Accountant
B) Lawyer
C) The individual himself
D) Any third party

Answer: C
Explanation: The return must be verified by the assessee (or legal representative if applicable).

Q14. For late filing of return, the DCT may impose penalty of:
A) 2% of assessed tax per month
B) Flat Tk. 5,000
C) No penalty
D) 5% of gross receipts

Answer: A
Explanation: As per Section 124, penalty can be 10% of tax assessed or 2% per month,
whichever is higher.

Q15. Assessment must be completed within:

A) 6 months
B) 2 years

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C) 5 years
D) 4 years from end of assessment year

Answer: D
Explanation: Assessments under scrutiny must be completed within 4 years.

Q16. If a return is selected for audit, the assessment is made under:

A) Section 82
B) Section 83
C) Section 84
D) Section 86

Answer: B
Explanation: Section 83 covers scrutiny/audit assessments.

Q17. Non-filing of return leads to:

A) Interest only
B) Penalty
C) Presumptive assessment
D) Best judgment assessment

Answer: D
Explanation: In absence of return, the DCT may assess income using best judgment under
Section 83.

Q18. Business not maintaining accounts may be assessed via:

A) Normal procedure
B) Scrutiny
C) Spot assessment
D) Best judgment

Answer: D
Explanation: Lack of books leads to best judgment assessment under Section 83.

Q19. Notice for filing return is issued under:

A) Section 75
B) Section 76
C) Section 93
D) Section 78

Answer: A
Explanation: Section 75 authorizes the DCT to serve notice requiring return filing.

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Q20. A revised return is valid if filed:
A) Before 30 June
B) After assessment
C) Within allowed time and before assessment
D) With application to NBR

Answer: C
Explanation: Revised return is valid if filed before assessment is completed and original return
was on time.

Q21. Who signs the return for a company?

A) Company secretary
B) Any director
C) CEO or Managing Director
D) Authorized person per law

Answer: D
Explanation: Returns must be signed by an authorized signatory (CEO, MD, or per the ITO
rules).

Q22. Best judgment assessment is based on:

A) Return of income
B) Books of account
C) Presumptions and available info
D) Taxpayer’s statement

Answer: C
Explanation: It is based on DCT’s own judgment when complete records are not available.

Q23. Self-assessment is governed by:

A) Section 82C
B) Section 83
C) Section 82BB
D) Section 75

Answer: C
Explanation: Section 82BB governs universal self-assessment procedures.

Q24. Return is defective if:

A) Not accompanied by required statements
B) Filed late
C) Filed manually
D) Filed by agent

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 Answer: A
Explanation: Incomplete or improperly verified returns are considered defective.

Q25. Who can revise a return?

A) Tax advisor
B) NBR
C) The taxpayer before assessment
D) Chartered Accountant

Answer: C
Explanation: The assessee can revise his return before the assessment is made.

Q26. Failure to file return results in:

A) Immediate arrest
B) Travel restriction
C) Penal proceedings including penalty
D) Interest only

Answer: C
Explanation: Non-compliance invites penalties and prosecution.

Q27. Return form IT-11GA is used by:

A) Individuals
B) Companies
C) Partnership firms
D) Salaried persons

Answer: B
Explanation: IT-11GA is the prescribed form for companies.

Q28. Where is appeal filed against assessment order?

A) High Court
B) DCT
C) Appellate Joint Commissioner or Commissioner (Appeals)
D) NBR

Answer: C
Explanation: First appeal is filed with the Appellate Joint Commissioner or Commissioner
(Appeals).
Q29. Time limit to file revised return:
A) 3 months
B) 6 months

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C) Before assessment
D) Any time before end of year

Answer: C
Explanation: Revised return is allowed only before the assessment is completed.

Q30. eTIN is mandatory for return filing except:

A) Minor with no income
B) Senior citizens
C) Anyone with bank account
D) Anyone filing return

Answer: A
Explanation: eTIN is required for all assessees except those exempt (e.g., minors with no
income).

Chapter 13: Advance Payment and Deduction of Tax at Source (TDS)

Q1. Advance tax is payable when tax liability exceeds:
A) Tk. 100,000
B) Tk. 200,000
C) Tk. 300,000
D) Tk. 500,000

Answer: A
Explanation: As per Section 64, advance tax becomes payable if the estimated tax liability
exceeds Tk. 100,000.

Q2. TDS stands for:

A) Tax Due Settlement
B) Tax Deduction at Source
C) Total Duty Submission
D) Tax Deferred System

Answer: B
Explanation: TDS refers to the mechanism of collecting tax at the point of payment.
Q3. Section 50 of the ITO, 1984 deals with:
A) Business expenses
B) House rent allowance
C) Deduction of tax at source
D) Filing of returns

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 Answer: C
Explanation: Section 50 covers the general provisions of TDS across various transactions.

Q4. Advance tax is payable in:

A) One installment
B) Four equal installments
C) Two installments
D) Monthly

Answer: B
Explanation: Advance tax is payable quarterly: September, December, March, and June.

Q5. TDS on salary is to be deducted under:

A) Section 50
B) Section 54
C) Section 52
D) Section 59

Answer: A
Explanation: TDS on salary is governed under Section 50.

Q6. Tax deduction on payment to contractors is under:

A) Section 52
B) Section 51
C) Section 55
D) Section 49

Answer: A
Explanation: TDS from payments to contractors/sub-contractors is covered under Section 52.

Q7. When TDS is deducted, the deductor must issue:

A) VAT certificate
B) Tax clearance
C) TDS certificate
D) Audit report

Answer: C
Explanation: A TDS certificate must be issued to the deductee showing details of deduction.

Q8. TDS must be deposited to government treasury within:

A) 3 days
B) 7 days
C) 15 days
D) 30 days

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 Answer: C
Explanation: Deducted tax must be deposited within 15 days of deduction.

Q9. Which of the following payments is subject to TDS?

A) Salary
B) Rent
C) Contractor payments
D) All of the above

Answer: D
Explanation: TDS applies to several payments such as salary, rent, contractor fees, etc.

Q10. Tax deducted on export proceeds is under:

A) Section 52Q
B) Section 53BB
C) Section 53DD
D) Section 53

Answer: B
Explanation: Section 53BB deals with tax deduction at source on export proceeds.

Q11. TDS is applicable when:

A) Taxpayer is exempt
B) No PAN/TIN is provided
C) Payment is below threshold
D) Payment crosses prescribed threshold

Answer: D
Explanation: TDS applies only when the transaction value crosses the limit specified for
deduction.

Q12. TDS on advertisement payments is under:

A) Section 53
B) Section 53A
C) Section 52A
D) Section 51

Answer: C
Explanation: Section 52A governs tax deduction from payments for advertisements.
Q13. Non-compliance with TDS rules leads to:
A) Interest only
B) Penalty and disallowance of expense

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C) Rebate denial
D) Legal immunity

Answer: B
Explanation: Failure to deduct/deposit TDS leads to penalty and disallowance of related
expense.

Q14. TDS return must be submitted:

A) Monthly
B) Quarterly
C) Half-yearly
D) Annually

Answer: B
Explanation: TDS returns are to be submitted quarterly under Section 75A.

Q15. A person deducting TDS is called:

A) Deductee
B) Collector
C) Assessee
D) Deductor

Answer: D
Explanation: The person who deducts tax is known as the deductor.

Q16. Tax deduction from interest on securities is under:

A) Section 53
B) Section 50
C) Section 54
D) Section 55

Answer: A
Explanation: Section 53 governs deduction of tax from interest on securities.

Q17. TDS from commission or brokerage is made under:

A) Section 50
B) Section 52
C) Section 53F
D) Section 55

Answer: C
Explanation: Commission or brokerage payments are covered under Section 53F

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Q18. When must advance tax be paid for the 1st installment?
A) On or before 15th July
B) On or before 15th September
C) On or before 30th September
D) On or before 15th August

Answer: C
Explanation: First installment of advance tax is due by 30th September.

Q19. Tax deduction from house rent paid to individuals is under:

A) Section 50
B) Section 52
C) Section 53A
D) Section 54

Answer: C
Explanation: Section 53A deals with TDS on rental payments.

Q20. Non-residents are subject to TDS at what default rate if no DTAA applies?
A) 10%
B) 15%
C) 20%
D) 30%

Answer: C
Explanation: Non-resident payments are typically taxed at 20%, unless treaty relief is available.

Q21. TDS from import payments is governed by:

A) Section 52
B) Section 53
C) Section 54
D) Section 53A

Answer: B
Explanation: Section 53 governs TDS on import payments.

Q22. TDS on remuneration to directors is:

A) Salary income
B) Covered under Section 50
C) Covered under Section 52A
D) Covered under Section 52

Answer: C
Explanation: TDS on director’s fees falls under Section 52A (not treated as salary).

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Q23. If TDS is not deducted, the expense will be:
A) Fully allowed
B) Partially allowed
C) Disallowed
D) Deferred

Answer: C
Explanation: Expense is fully disallowed under Section 30 if TDS is not deducted.

Q24. Advance tax can be adjusted against:

A) Capital gain only
B) Other income
C) Final tax liability
D) Not adjustable

Answer: C
Explanation: Advance tax is fully adjustable against final assessed tax.

Q25. TDS certificate must be issued within:

A) 7 days
B) 10 days
C) 15 days
D) 1 month

Answer: C
Explanation: Deductor must issue the TDS certificate within 15 days of deduction.

Q26. Failure to pay advance tax attracts:

A) Penalty only
B) Interest @10% per annum
C) Interest @15% per annum
D) No consequence

Answer: B
Explanation: Interest at 10% p.a. may be charged on shortfall of advance tax.

Q27. TDS applies even if payee is exempt, unless:

A) Certificate of exemption obtained
B) Auditor approves
C) Bank deducts tax
D) Return filed early

Answer: A
Explanation: TDS can be avoided only with a valid exemption certificate from DCT.

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Q28. Tax on income of foreign technician is deducted under:
A) Section 50
B) Section 52
C) Section 53
D) Section 52O

Answer: D
Explanation: Section 52O deals with TDS on payments to foreign technicians.

Q29. TDS on professional fees paid to consultants falls under:

A) Section 52A
B) Section 53F
C) Section 52AA
D) Section 53J

Answer: C
Explanation: Section 52AA governs deduction from professional/technical service fees.

Q30. Credit for TDS can be claimed:

A) In the same year it is deducted
B) In next year
C) Only after refund is claimed
D) Not claimable

Answer: A
Explanation: TDS credit is claimed in the year in which income is assessed and taxed.

Chapter 14: Penalties, Appeals, and Revision

Q1. Failure to file a return within the due date may result in:
A) No consequence
B) Tax refund only
C) Penalty and interest
D) Only TDS disallowance

Answer: C
Explanation: Section 124 provides for penalties and interest if returns are not filed on time.

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Q2. Under Section 124, the penalty for non-filing of return is:
A) 5% of income
B) Tk. 10,000 flat
C) 10% of tax payable or 2% per month, whichever is higher
D) Only interest

Answer: C
Explanation: Penalty is either 10% of assessed tax or 2% of the tax per month of delay.

Q3. Concealment of income attracts penalty under:

A) Section 123
B) Section 127
C) Section 128
D) Section 135

Answer: C
Explanation: Section 128 deals with penalty for concealment or misstatement of income.

Q4. Penalty for concealment of income may be up to:

A) 100% of tax evaded
B) 50% of income
C) 200% of tax evaded
D) No penalty if voluntary disclosure

Answer: C
Explanation: The penalty may go up to 200% of tax sought to be evaded.

Q5. Appeal against DCT order is filed with:

A) NBR
B) High Court
C) Appellate Joint Commissioner/Commissioner (Appeals)
D) Tax Tribunal

Answer: C
Explanation: The first level of appeal lies with the Appellate Joint Commissioner or
Commissioner (Appeals).

Q6. Time limit for filing an appeal is:

A) 15 days from order
B) 30 days from receipt of order
C) 60 days from notice
D) 90 days

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 Answer: B
Explanation: Appeal must be filed within 30 days from the date of service of the order.

Q7. An appeal to the Appellate Tribunal is filed under:

A) Section 120
B) Section 131
C) Section 132
D) Section 133

Answer: D
Explanation: Section 133 of the ITO, 1984 deals with appeal to the Taxes Appellate Tribunal.

Q8. Revision of assessment by the Commissioner is allowed under:

A) Section 122
B) Section 123
C) Section 173
D) Section 153

Answer: C
Explanation: Section 173 provides for revision of orders by the Commissioner of Taxes.

Q9. Appellate Tribunal is the:

A) First appellate authority
B) Second appellate authority
C) Revision authority
D) Only appellate authority

Answer: B
Explanation: The first appeal is filed before the Appellate Joint Commissioner; Tribunal is
second.

Q10. Tribunal’s order is final unless:

A) Overturned by High Court
B) Reviewed by NBR
C) Rescinded by DCT
D) Disputed by taxpayer

Answer: A
Explanation: Tribunal’s order is final unless challenged in High Court on a question of law.
Q11. Appeal to High Court must be based on:
A) Question of law
B) Any matter

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C) Amount of tax
D) Delay in filing

Answer: A
Explanation: Only substantial questions of law can be appealed to High Court under Section
160.

Q12. Which of the following may not file an appeal?

A) Individual taxpayer
B) DCT
C) Commissioner
D) Auditor

Answer: D
Explanation: Only parties to the assessment (taxpayer or tax authority) can file appeals.

Q13. If appeal is not filed within time, delay may be condoned if:
A) Delay is unintentional
B) Reasonable cause is shown
C) Order is against law
D) Tribunal approves

Answer: B
Explanation: Delay can be condoned on showing sufficient cause for late filing.

Q14. Penalty for failure to deduct TDS is governed by:

A) Section 124
B) Section 128
C) Section 127
D) Section 131

Answer: C
Explanation: Section 127 provides for penalty for failure to deduct or deposit TDS.

Q15. If TDS is deducted but not deposited, it is treated as:

A) Legal default
B) Penal default
C) Concealment
D) Tax evasion

Answer: D
Explanation: Non-deposit of TDS is considered tax evasion and penal provisions apply.

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Q16. Appeal fee for individuals filing before Commissioner (Appeals) is:
A) Tk. 1,000
B) Tk. 2,000
C) Tk. 5,000
D) Tk. 500

Answer: B
Explanation: Current law prescribes a small fixed fee for filing an appeal (subject to change).

Q17. When a revision is sought, it must be done within:

A) 1 month
B) 60 days
C) 90 days from order
D) No time limit

Answer: C
Explanation: Revision must be sought within 90 days from date of the order.

Q18. Penalty for late TDS return submission is:

A) Tk. 5,000
B) Tk. 10,000
C) Tk. 1,000 per month
D) 2% of tax

Answer: C
Explanation: Typically, a penalty of Tk. 1,000 per month applies for failure to file TDS return
on time.

Q19. Revision under Section 173 can be done by:

A) DCT
B) High Court
C) NBR
D) Commissioner of Taxes

Answer: D
Explanation: Only the Commissioner of Taxes can revise an order under Section 173.

Q20. Penalty for filing incorrect return is levied under:

A) Section 127
B) Section 128
C) Section 130
D) Section 133

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 Answer: B
Explanation: Section 128 deals with penalties for false or misleading statements in the return.

Q21. Penalty is not imposed if:

A) Return is not filed
B) Reasonable cause exists
C) TDS is not deducted
D) Books of accounts are not maintained

Answer: B
Explanation: Penalty may be waived if taxpayer shows sufficient reasonable cause.

Q22. Which of the following is not an appellate authority?

A) DCT
B) Commissioner (Appeals)
C) Appellate Tribunal
D) High Court

Answer: A
Explanation: DCT is the original assessment authority, not appellate.

Q23. Appeals are governed under which chapter of ITO, 1984?

A) Chapter V
B) Chapter VI
C) Chapter VII
D) Chapter IX

Answer: C
Explanation: Appeals and revisions are addressed in Chapter VII of the Ordinance.

Q24. NBR can revise order under:

A) Section 173
B) Section 154
C) Section 152
D) Section 161

Answer: D
Explanation: Section 161 authorizes the National Board of Revenue to revise certain orders.

Q25. Appellate Tribunal includes:

A) Judicial member only
B) Accountant member only
C) Judicial and accountant members
D) Auditor and judge

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 Answer: C
Explanation: The Tribunal consists of both judicial and accountant members.

Q26. Penalty for failure to comply with notice under Section 75:
A) Tk. 5,000
B) Tk. 10,000
C) Imprisonment
D) Tk. 50,000

Answer: B
Explanation: Penalty is usually Tk. 10,000 for failure to comply with a return-filing notice.

Q27. Order of Tribunal can be appealed to:

A) Supreme Court
B) NBR
C) High Court Division
D) Tax Ombudsman

Answer: C
Explanation: Tribunal decisions can be appealed to the High Court on a question of law.

Q28. Penalty for not maintaining books of accounts applies to:

A) Only companies
B) Business and professionals
C) Salaried persons
D) Exporters only

Answer: B
Explanation: Businesses and professionals are obligated to maintain books—failure results in
penalties.

Q29. Penalty for underreporting income may be:

A) 20% of shortfall
B) 50% of tax evaded
C) 100% of concealed income
D) Up to 200% of tax involved

Answer: D
Explanation: As per Section 128, concealment penalty can be up to 200% of tax sought to be
evaded.

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Q30. Which of the following cannot be revised under Section 173?
A) Tribunal order
B) DCT’s order
C) Summary assessment
D) Best judgment assessment

Answer: A
Explanation: Orders of the Tribunal are final and cannot be revised under Section 173.

Chapter 15: Value Added Tax (VAT)

Q1. VAT in Bangladesh is regulated under:
A) VAT Act, 1991
B) VAT and SD Act, 2012
C) Finance Act, 2020
D) Excise Act, 1957

Answer: B
Explanation: The current VAT system is governed by the VAT and Supplementary Duty Act,
2012.

Q2. Standard VAT rate in Bangladesh is:

A) 7.5%
B) 10%
C) 15%
D) 17.5%

Answer: C
Explanation: The standard VAT rate in Bangladesh is 15% under the VAT & SD Act, 2012.

Q3. VAT is applicable on:

A) Income
B) Profits
C) Value addition at each stage of supply
D) Only imports

Answer: C
Explanation: VAT is a tax on the value added at each stage of the production/distribution chain.
Q4. VAT is administered by:
A) Bangladesh Bank
B) Ministry of Finance

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C) National Board of Revenue (NBR)
D) Bangladesh Customs

Answer: C
Explanation: NBR is the principal authority responsible for VAT administration.

Q5. The VAT registration threshold is:

A) Tk. 10 lakh
B) Tk. 30 lakh
C) Tk. 50 lakh
D) Tk. 80 lakh

Answer: C
Explanation: Businesses with annual turnover exceeding Tk. 50 lakh must register for VAT.

Q6. Turnover tax applies when turnover is:

A) Below Tk. 50 lakh
B) Tk. 3 crore
C) Tk. 10 crore
D) Over Tk. 50 lakh

Answer: A
Explanation: Turnover tax at 4% applies to small businesses with turnover under Tk. 50 lakh.

Q7. Input VAT means:

A) VAT paid by consumer
B) VAT collected from buyer
C) VAT paid on purchases
D) Output VAT

Answer: C
Explanation: Input VAT is the VAT a registered entity pays on its business purchases.

Q8. Output VAT means:

A) VAT payable by government
B) VAT paid to supplier
C) VAT collected on sales
D) Notional VAT

Answer: C
Explanation: Output VAT is the VAT charged on goods or services sold.

Q9. Input tax credit is allowed only if:

A) Seller is not registered

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B) Purchase is recorded in accounts
C) VAT invoice is available
D) Both B and C

Answer: D
Explanation: Proper documentation and accounting are required to claim input tax credit.

Q10. VAT return is filed:

A) Annually
B) Quarterly
C) Monthly
D) Half-yearly

Answer: C
Explanation: VAT returns must be submitted every month by the 15th of the following month.

Q11. VAT-registered entities must maintain records for:

A) 2 years
B) 3 years
C) 5 years
D) 10 years
Answer: C
Explanation: VAT records must be retained for at least 5 years as per VAT & SD Act.

Q12. Which of the following goods are exempt from VAT?

A) Luxury items
B) Gold
C) Basic agricultural produce
D) Electronics
Answer: C
Explanation: Basic food/agricultural goods are VAT exempt to ensure affordability.

Q13. VAT on imported goods is collected by:

A) Income Tax Department
B) NBR (directly)
C) Bangladesh Customs
D) Bangladesh Bank
Answer: C
Explanation: Customs collects VAT at import stage.

Q14. VAT paid at import is:

A) Non-refundable
B) Final tax

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C) Adjustable input tax
D) Capitalized
Answer: C
Explanation: VAT paid at import is input tax and may be credited against output VAT.

Q15. Failure to submit VAT return on time may result in:

A) Penalty only
B) Interest only
C) Both penalty and interest
D) No consequence
Answer: C
Explanation: Penalties and interest are imposed for late VAT return submission.

Q16. VAT on services is applicable when:

A) Received from abroad
B) Supplied locally
C) Exported
D) Supplied in local territory
Answer: D
Explanation: VAT applies on taxable services supplied within Bangladesh.

Q17. Exempted supplies mean:

A) Zero-rated
B) Not subject to VAT
C) Subject to reduced VAT
D) Turnover taxed
Answer: B
Explanation: Exempted goods/services are outside VAT scope — no credit for input VAT.
Q18. Zero-rated supplies:
A) Not taxable
B) Taxed at 0%, input credit allowed
C) Taxed at 5%
D) Exempt without input credit
Answer: B
Explanation: Zero-rated supplies are taxed at 0%, but input VAT credit is still available.

Q19. Supplies to EPZs are:

A) Exempt
B) Zero-rated
C) Not reportable
D) Fully taxable

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 Answer: B
Explanation: Exports, including supplies to EPZs, are treated as zero-rated.

Q20. Invoice with VAT must mention:

A) Buyer’s TIN
B) Seller’s VAT registration number
C) HS code
D) Buyer’s national ID
Answer: B
Explanation: VAT invoices must include supplier’s BIN (Business Identification Number).

Q21. Which is not a condition for input VAT credit?

A) VAT invoice available
B) Goods received
C) Payment made in cash
D) Tax deposited by supplier
Answer: C
Explanation: Cash payment is not a pre-condition; invoice and tax deposit are key.

Q22. In VAT, tax is ultimately borne by:

A) Government
B) Business
C) Final consumer
D) NBR
Answer: C
Explanation: VAT is a consumption tax — burden shifts to end consumers.

Q23. VAT Act, 2012 was implemented from:

A) July 1, 2017
B) July 1, 2019
C) July 1, 2012
D) July 1, 2014
Answer: B
Explanation: Though passed in 2012, it was implemented on July 1, 2019.

Q24. VAT rebate cannot be claimed on:

A) Capital machinery
B) Raw materials
C) Office furniture
D) Packing materials
Answer: C
Explanation: Input VAT on fixed assets like furniture is not eligible for credit.

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Q25. Value for VAT is:
A) MRP
B) Sale price excluding VAT
C) Cost plus profit
D) Transaction value
Answer: D
Explanation: VAT is charged on the transaction value between seller and buyer.

Q26. Which VAT rate applies to turnover taxpayers?

A) 3%
B) 4%
C) 5%
D) 15%
Answer: B
Explanation: Turnover taxpayers pay 4% VAT but are not allowed input credit.

Q27. VAT is administered through:

A) Income Tax Circle
B) VAT Commissionerates
C) Treasury offices
D) Bangladesh Bank
Answer: B
Explanation: Regional VAT Commissionerates handle VAT matters.

Q28. VAT registration is mandatory if:

A) Only services offered
B) Turnover crosses threshold
C) Individual earns above exemption
D) Profits exceed Tk. 10 lakh
Answer: B
Explanation: Registration is based on turnover, not profit.

Q29. Failure to pay VAT may result in:

A) Penalty
B) Interest
C) Legal action
D) All of the above
Answer: D
Explanation: Various penalties are prescribed for default under VAT law.
Q30. Turnover tax is:
A) Adjustable VAT

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B) Non-adjustable flat tax
C) Final tax
D) Refundable
Answer: B
Explanation: Turnover tax at 4% is final and not creditable against VAT.

Chapter 16: Supplementary Duty and Excise Duty

Q1. Supplementary Duty (SD) is imposed:
A) On all imports
B) In addition to VAT on specified goods/services
C) Instead of VAT
D) On agricultural goods

Answer: B
Explanation: SD is an additional tax levied on luxury and harmful goods/services alongside
VAT.

Q2. SD is governed under:

A) VAT Act, 1991
B) Finance Act
C) VAT and SD Act, 2012
D) Income Tax Ordinance

Answer: C
Explanation: The VAT & SD Act, 2012 regulates both VAT and Supplementary Duty.

Q3. SD is generally charged at:

A) 10%
B) 5%
C) Variable rates (10% to 350%)
D) Fixed 20%

Answer: C
Explanation: SD rates vary widely depending on the nature of goods or services.

Q4. SD is applicable on which of the following?

A) Basic necessities
B) All food products
C) Cigarettes, soft drinks, and luxury cars
D) Life-saving drugs

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 Answer: C
Explanation: SD typically targets luxury, harmful, or non-essential goods.

Q5. SD on mobile SIM card is:

A) Exempt
B) 10%
C) Tk. 200
D) Tk. 100

Answer: D
Explanation: A fixed SD of Tk. 100 is levied on issuance of each new SIM card.

Q6. SD is collected by:

A) Local Government
B) Income Tax Department
C) NBR through VAT officials
D) Customs Authority only

Answer: C
Explanation: VAT authorities under NBR collect SD at production/import/supply stage.

Q7. Which is not subject to SD?

A) Luxury watch
B) Passenger car
C) Rice
D) Cigarette

Answer: C
Explanation: Essential goods like rice are exempt from SD.

Q8. SD is imposed on:

A) All exports
B) All imports
C) Only specified items listed in First Schedule
D) Agricultural land

Answer: C
Explanation: SD applies to specific items in the VAT & SD Act’s First Schedule.

Q9. SD is not creditable against VAT because:

A) It is refundable
B) It is collected by a different agency
C) It’s not considered input VAT
D) It’s not a tax

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 Answer: C
Explanation: SD is a non-creditable tax; it increases the cost base.

Q10. Excise duty in Bangladesh is mainly imposed on:

A) Exporters
B) Domestic manufacturers
C) Banking transactions and air travel
D) Agricultural produce

Answer: C
Explanation: Excise duty is charged on certain services such as bank accounts and travel.

Q11. Excise duty on bank balance exceeding Tk. 10 lakh is:

A) Tk. 100
B) Tk. 500
C) Tk. 1,000
D) Tk. 2,500

Answer: D
Explanation: Tk. 2,500 excise duty applies on accounts exceeding Tk. 10 lakh balance.

Q12. Excise duty is governed by:

A) Income Tax Ordinance
B) VAT Act
C) Excises and Salt Act, 1944
D) Customs Act

Answer: C
Explanation: Excise duties are legally regulated under the Excises and Salt Act, 1944.

Q13. Which tax is imposed on imported luxury watches?

A) VAT only
B) VAT + Excise
C) VAT + SD
D) SD only

Answer: C
Explanation: SD is charged on luxury goods in addition to VAT.

Q14. Excise on airline ticket for international economy class is:

A) Tk. 200
B) Tk. 500
C) Tk. 1,000
D) Exempt

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 Answer: A
Explanation: Excise is typically fixed per ticket based on class and destination.

Q15. Supplementary Duty increases:

A) Final sale price
B) Government subsidy
C) Supplier’s profit
D) VAT credit

Answer: A
Explanation: Since SD is non-creditable, it forms part of the sale price.

Q16. Tobacco products are subject to:

A) VAT only
B) VAT + Excise
C) VAT + SD
D) Excise only

Answer: C
Explanation: Tobacco products are subject to both VAT and SD.

Q17. Purpose of SD includes:

A) Promoting exports
B) Reducing consumption of harmful goods
C) Reducing VAT
D) Encouraging savings

Answer: B
Explanation: SD discourages consumption of harmful or luxury items.

Q18. Input tax credit is not allowed for:

A) VAT
B) SD
C) Both
D) None

Answer: B
Explanation: SD is non-creditable and not adjustable like VAT.

Q19. Excise duty is normally:

A) Ad valorem
B) Specific
C) Percentage of VAT
D) Refundable

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 Answer: B
Explanation: Excise duties are often fixed per unit (e.g., Tk. per account or ticket).

Q20. Supplementary Duty is payable by:

A) Final consumer
B) Importer/supplier
C) Transport authority
D) Employee

Answer: B
Explanation: Supplier or importer pays SD to NBR.

Q21. Excise is not applicable on:

A) Fixed deposit accounts
B) Savings accounts
C) Mobile phone top-ups
D) Current accounts

Answer: C
Explanation: Mobile recharges attract VAT, not excise.

Q22. Which tax is deducted at source on SD items?

A) VAT
B) Income tax
C) TDS
D) None

Answer: D
Explanation: SD is not deducted at source—it is collected on sale/import.

Q23. If SD is 60% and product price is Tk. 100, SD amount is:

A) Tk. 6
B) Tk. 60
C) Tk. 160
D) Tk. 46

Answer: B
Explanation: SD = 60% of 100 = Tk. 60.

Q24. SD is calculated:
A) Before VAT
B) After VAT
C) On VAT amount
D) Deducted from VAT

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 Answer: A
Explanation: VAT is calculated on base price + SD.

Q25. The term “First Schedule” in VAT Act refers to:

A) Tax rates for all goods
B) List of SD-applicable goods and services
C) Refund rules
D) Offense penalties

Answer: B
Explanation: The First Schedule lists all items subject to SD.

Q26. A retailer sells perfume (SD applicable). VAT is charged on:

A) Selling price
B) Selling price + SD
C) SD only
D) Purchase price

Answer: B
Explanation: VAT is charged on total value including SD.

Q27. Who bears the burden of SD?

A) Manufacturer
B) Final consumer
C) NBR
D) Distributor

Answer: B
Explanation: Although paid by supplier, the cost is passed to the final consumer.

Q28. Excise duty is collected by:

A) VAT commissionerate
B) Income Tax Department
C) Customs
D) Respective service providers

Answer: A
Explanation: VAT commissionerates under NBR also handle excise collection.

Q29. In Bangladesh, excise duty applies to:

A) VAT payers only
B) All individuals
C) Specific financial transactions
D) All imports

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 Answer: C
Explanation: Excise applies on specific financial services, like bank accounts, air travel.

Q30. Supplementary duty increases the:

A) Tax base for VAT
B) Input tax
C) Allowable deductions
D) VAT refund amount

Answer: A
Explanation: Since VAT is charged on price + SD, it increases the VAT base.

Chapter 17: Customs Duty and Import Procedures

Q1. Customs duty is imposed on:
A) Domestic production
B) Export of goods
C) Import of goods into Bangladesh
D) Services rendered

Answer: C
Explanation: Customs duty is a tax on goods imported into Bangladesh.

Q2. The main legislation governing customs duty is:

A) Customs Act, 1969
B) VAT Act, 1991
C) Import and Export Control Act, 1950
D) Finance Act

Answer: A
Explanation: The Customs Act, 1969 is the primary law for customs duties and procedures.

Q3. The authority responsible for administering customs is:

A) Ministry of Commerce
B) Bangladesh Bank
C) National Board of Revenue (NBR)
D) Bangladesh Investment Development Authority

Answer: C
Explanation: NBR administers customs duty collection and enforcement.

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Q4. CIF stands for:
A) Customs, Import, Freight
B) Cost, Insurance, and Freight
C) Central Import Fund
D) Customs Information Format

Answer: B
Explanation: CIF is the valuation basis for imported goods: cost + insurance + freight.

Q5. Importers are required to obtain:

A) VAT registration
B) Export permit
C) IRC (Import Registration Certificate)
D) Tax holiday approval

Answer: C
Explanation: All importers must have a valid IRC to import legally.

Q6. Tariff values are declared in:

A) VAT Schedules
B) First Schedule of Customs Act
C) Income Tax Manual
D) Trade License

Answer: B
Explanation: The First Schedule of the Customs Act contains customs tariff rates.

Q7. Goods exempt from customs duty are listed in:

A) Third Schedule of VAT Act
B) SROs issued by NBR
C) Customs Budget Rules
D) Finance Ordinance

Answer: B
Explanation: Exemptions are notified through SROs by NBR.

Q8. Harmonized System (HS) code is used for:

A) Pricing
B) Bank transactions
C) Classification of goods
D) Applying for refund

Answer: C
Explanation: HS codes classify goods for customs valuation and tax purposes.

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Q9. Custom duty is calculated on:
A) Retail price
B) CIF value
C) Ex-factory price
D) Domestic sales price

Answer: B
Explanation: Customs duty is levied on the CIF value of imported goods.

Q10. Warehouse goods can be kept for:

A) 1 month
B) 3 months
C) 6 months (extendable)
D) Unlimited period

Answer: C
Explanation: Goods in bonded warehouses can be stored up to 6 months, extendable upon
request.

Q11. Importers must submit:

A) Export documentation
B) Monthly VAT returns
C) Bill of Entry
D) IT certificate

Answer: C
Explanation: The Bill of Entry is the key customs declaration document filed by importers.

Q12. Duty drawback refers to:

A) Customs refund on exports
B) Forward contracts
C) Reduction in penalty
D) Exemption for capital goods

Answer: A
Explanation: Exporters may claim refund (drawback) of customs duties paid on imported inputs
used in exports.

Q13. Customs valuation rules are based on:

A) Local market price
B) MRP
C) WTO Valuation Agreement
D) Supplier invoice only

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 Answer: C
Explanation: Bangladesh follows WTO-compliant customs valuation principles.

Q14. Customs clearance is delayed due to:

A) Non-payment of VAT
B) Income tax return not filed
C) Absence of LC
D) Incomplete documentation

Answer: D
Explanation: Missing or incorrect documents delay customs clearance.

Q15. Import Policy Order is issued by:

A) Bangladesh Bank
B) NBR
C) Ministry of Commerce
D) BIDA

Answer: C
Explanation: The Ministry of Commerce issues the Import Policy Order.

Q16. Prohibited goods are listed in:

A) VAT Second Schedule
B) Income Tax Manual
C) Import Policy Order
D) Customs Tariff

Answer: C
Explanation: The Import Policy Order classifies banned and restricted items.

Q17. Clearance of imported goods without paying duties is allowed under:

A) Provisional release
B) Duty-free scheme
C) Bonded warehouse
D) Temporary importation

Answer: C
Explanation: Under bonded warehousing, goods can be imported without immediate duty
payment.
Q18. Falsification of import value is a:
A) Civil issue
B) Minor offense

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C) Customs offense
D) Banking error

Answer: C
Explanation: Under-invoicing is a serious customs violation.

Q19. Advance ruling can be sought from:

A) Bangladesh Bank
B) Tax Tribunal
C) Commissioner of Customs
D) VAT Commissioner

Answer: C
Explanation: Advance rulings on classification/valuation can be obtained from Customs.

Q20. SRO stands for:

A) Standard Regulatory Order
B) Statutory Regulatory Order
C) Supplier Return Order
D) Settlement Refund Order

Answer: B
Explanation: SROs are legal instruments used to grant exemptions or impose duties.

Q21. Importers must maintain:

A) TIN only
B) IRC, BIN, and Books of Accounts
C) Passport copy
D) Land documents

Answer: B
Explanation: Essential documents include IRC (Import Reg. Cert.), BIN, and financial records.

Q22. Bill of Lading is issued by:

A) Customs
B) Importer
C) Shipping company
D) Bank

Answer: C
Explanation: The Bill of Lading is a transport document issued by the shipping company.

Q23. Over-invoicing leads to:

A) Excess duty

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B) Reduced tax
C) Money laundering risk
D) Higher exemption

Answer: C
Explanation: Over-invoicing can be a method of capital flight or laundering.

Q24. For delayed clearance, warehouse rent is:

A) Refunded
B) Reduced
C) Charged at daily rates
D) Waived for first 60 days

Answer: C
Explanation: Warehouse rent applies daily after the free period.

Q25. Capital machinery may enjoy:

A) 5% customs duty
B) 0% customs duty
C) 25% VAT
D) High SD

Answer: B
Explanation: Many capital machinery items are duty-exempt to encourage investment.

Q26. Import of used computers is:

A) Encouraged
B) Prohibited
C) Subject to VAT only
D) Subject to 25% customs duty

Answer: B
Explanation: Many used electronic imports are banned to avoid e-waste.

Q27. Custom bonded warehouse facilities are given to:

A) Domestic retailers
B) 100% exporters
C) Importers only
D) Farmers

Answer: B
Explanation: Bonded facilities are meant for export-oriented industries.

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Q28. Tariff classification disputes go to:
A) VAT office
B) Customs Commissioner
C) Tribunal
D) DCT

Answer: B
Explanation: Classification issues are resolved by Customs Commissioner.

Q29. Importers submit which form online?

A) TDS Form
B) IT Return
C) ASYCUDA Bill of Entry
D) LC format

Answer: C
Explanation: ASYCUDA is the automated system used for customs clearance.

Q30. FTA and PTA provide for:

A) Increased customs
B) Double taxation
C) Preferential tariffs
D) VAT exemption

Answer: C
Explanation: Free/Preferential Trade Agreements offer duty reductions.

Excellent! Continuing now with the final chapters in one continuous long format:

Chapter 18: Tax Administration in Bangladesh

Q1. The apex body for tax administration in Bangladesh is:
A) Ministry of Finance
B) Bangladesh Bank
C) National Board of Revenue (NBR)
D) Comptroller and Auditor General

Answer: C
Explanation: NBR is the central authority under the Ministry of Finance for tax matters.

Q2. NBR was established under:

A) Finance Act
B) Income Tax Ordinance

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C) Bangladesh Constitution
D) NBR Order, 1972

Answer: D
Explanation: The NBR Order, 1972 formally established the National Board of Revenue.

Q3. The Chairman of NBR also acts as:

A) Governor of Bangladesh Bank
B) Secretary, Internal Resources Division
C) Finance Secretary
D) VAT Commissioner

Answer: B
Explanation: The NBR Chairman holds the dual role as Secretary of IRD.

Q4. Income Tax, VAT, and Customs are:

A) Independent departments
B) Handled by NBR under separate wings
C) Under Ministry of Commerce
D) Controlled by City Corporations

Answer: B
Explanation: NBR manages all three taxes through distinct but coordinated wings.

Q5. Tax Zones in Bangladesh are:

A) District-wise
B) Based on income level
C) Geographically and functionally organized
D) Only in Dhaka

Answer: C
Explanation: Zones are set based on geography and function (e.g., Large Taxpayer Unit).

Q6. Large Taxpayer Unit (LTU) handles:

A) Salaried persons
B) Small businesses
C) Corporations with high revenue
D) NGOs

Answer: C
Explanation: LTU handles large corporate taxpayers for efficient monitoring.

Q7. NBR operates under the control of:

A) Parliament

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B) Prime Minister’s Office
C) Ministry of Finance
D) Supreme Court

Answer: C
Explanation: NBR is an autonomous body under the Ministry of Finance.

Q8. NBR’s main sources of revenue collection are:

A) Municipal taxes
B) Excise duty
C) Income Tax, VAT, Customs
D) Foreign grants

Answer: C
Explanation: These three taxes are the pillars of Bangladesh's tax revenue.

Q9. DCT refers to:

A) Director of Customs and Tax
B) Deputy Controller of Treasury
C) Deputy Commissioner of Taxes
D) Department of Capital Tax

Answer: C
Explanation: DCT is a key officer in income tax administration.

Q10. NBR is accountable to:

A) Ministry of Law
B) Anti-Corruption Commission
C) Internal Resources Division
D) National Assembly

Answer: C
Explanation: The Internal Resources Division supervises NBR activities.

Q11. Circle offices report to:

A) Divisional Commissioner
B) Income Tax Appellate Tribunal
C) Zonal Commissioners
D) Ministry of Planning

Answer: C
Explanation: Tax Circles report to their respective Zonal Commissioners.

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Q12. Taxpayer Identification Number (TIN) is issued by:
A) NBR’s TIN wing
B) Bangladesh Bank
C) Registrar of Joint Stock
D) Tax Circle

Answer: A
Explanation: The TIN wing of NBR issues and manages e-TIN registrations.

Q13. eTIN is mandatory for:

A) Importers
B) Bank account holders
C) Company directors
D) All of the above

Answer: D
Explanation: eTIN is required in many transactions to promote tax compliance.

Q14. Tax Day is observed in Bangladesh on:

A) July 1
B) December 31
C) November 30
D) Income Tax Day varies

Answer: C
Explanation: November 30 is observed as Tax Day, coinciding with return deadline.

Q15. NBR automation platform is known as:

A) BIDA Portal
B) ASYCUDA
C) eReturn Portal
D) TaxSoft

Answer: C
Explanation: eReturn is used for online income tax return filing.

Q16. Which of the following is not a function of NBR?

A) Formulating tax policy
B) Approving loan applications
C) Tax collection
D) Administering tax laws

Answer: B
Explanation: Loans are not handled by NBR.

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Q17. Taxpayer charter ensures:
A) Higher tax rates
B) Penalty waiver
C) Rights and obligations of taxpayers
D) Only benefits for salaried class

Answer: C
Explanation: The taxpayer charter outlines rights and duties for transparency.

Q18. Revenue target is set by:

A) Parliament
B) Ministry of Law
C) NBR
D) Ministry of Finance

Answer: D
Explanation: The Finance Ministry sets annual revenue targets for NBR.

Q19. Who conducts internal audit of tax offices?

A) External Auditor
B) NBR's Inspection Team
C) Anti-Corruption Commission
D) Income Tax Tribunal

Answer: B
Explanation: NBR has internal inspection/audit teams to ensure compliance.

Q20. Zonal Commissioners report to:

A) Finance Minister
B) NBR Chairman
C) High Court
D) Income Tax Circle

Answer: B
Explanation: They are supervised by NBR leadership.

Q21. NBR was formerly known as:

A) Tax Department
B) Directorate of Revenue
C) Central Board of Revenue
D) Board of Internal Audit

Answer: C
Explanation: The predecessor of NBR was the Central Board of Revenue.

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Q22. Tax administration reform programs are supported by:
A) USAID
B) ADB & World Bank
C) UNDP
D) WTO

Answer: B
Explanation: Major reforms have been supported by the ADB and World Bank.

Q23. “Tax Fair” is organized to:

A) Penalize tax evaders
B) Launch new tax laws
C) Educate and register taxpayers
D) Reduce revenue

Answer: C
Explanation: Tax fairs promote awareness and encourage compliance.

Q24. Which one is a major challenge in tax administration?

A) Low inflation
B) Widespread tax evasion
C) Trade deficit
D) High subsidies

Answer: B
Explanation: Tax evasion significantly hampers tax collection.

Q25. NBR uses which software for customs processing?

A) eTIN
B) ASYCUDA
C) VAT Smart
D) SAP

Answer: B
Explanation: ASYCUDA automates customs clearance.

Q26. Tax Ombudsman deals with:

A) Refund claims
B) Taxpayer complaints
C) Tribunal cases
D) Surcharge appeals

Answer: B
Explanation: The Tax Ombudsman provides grievance redressal for taxpayers.

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Q27. The tax-to-GDP ratio in Bangladesh is around:
A) 30%
B) 25%
C) 20%
D) Below 10%

Answer: D
Explanation: Bangladesh has one of the lowest tax-to-GDP ratios in South Asia.

Q28. Online VAT registration is done via:

A) ASYCUDA
B) BIDA portal
C) VAT Online Portal
D) Income Tax Office

Answer: C
Explanation: The VAT Online Portal allows for BIN registration and return filing.

Q29. Automation helps NBR in:

A) Increasing corruption
B) Reducing transparency
C) Improving compliance and revenue collection
D) Avoiding taxpayers

Answer: C
Explanation: Automation reduces leakage and increases efficiency.

Q30. Which of the following is not under NBR?

A) VAT Wing
B) Income Tax Wing
C) Customs Wing
D) Excise & Salt Directorate

Answer: D
Explanation: Excise & Salt Directorate is a separate entity under another ministry.

Chapter 19: Double Taxation and Tax Treaties

Q1. Double taxation means:
A) Paying tax twice on same income in the same country
B) Paying tax once only

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C) No tax on international income
D) Tax paid twice on different incomes

Answer: A
Explanation: It refers to the same income being taxed in two different countries.

Q2. Bangladesh avoids double taxation through:

A) Exempting foreign income
B) Unilateral relief
C) Double Taxation Agreements (DTAs)
D) Ignoring foreign income

Answer: C
Explanation: Bangladesh signs DTAs to avoid international double taxation.

Q3. DTA stands for:

A) Direct Tax Adjustment
B) Double Tax Adjustment
C) Double Taxation Agreement
D) Domestic Tax Assessment

Answer: C
Explanation: DTA is a treaty between two countries to prevent the same income from being
taxed twice.

Q4. Bangladesh has DTAs with:

A) 3 countries
B) Over 20 countries
C) Only SAARC countries
D) USA only

Answer: B
Explanation: Bangladesh has signed DTAs with more than 30 countries.

Q5. DTAs generally follow:

A) OECD or UN Model Conventions
B) WTO Rules
C) IMF Policy
D) World Bank Guidelines

Answer: A
Explanation: DTAs are based on OECD or UN model frameworks.

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Q6. A resident of Bangladesh earning in UK can claim:
A) Total exemption
B) Double taxation relief under DTA
C) Tax holiday
D) Not required to disclose

Answer: B
Explanation: Such income may be taxed in UK and relief claimed in Bangladesh.

Q7. Methods of granting relief under DTA include:

A) Exemption method
B) Tax credit method
C) Both A and B
D) Refund

Answer: C
Explanation: DTAs usually offer exemption or credit relief to avoid double tax.

Q8. If there is no DTA, Bangladesh allows:

A) No relief
B) Unilateral relief under domestic law
C) Exemption
D) Surcharge

Answer: B
Explanation: Unilateral relief is available if certain conditions are met.

Q9. Permanent Establishment (PE) refers to:

A) Registered office
B) Temporary consultant
C) Fixed business presence in foreign country
D) NGO

Answer: C
Explanation: PE is a tax concept under DTAs referring to fixed place of business.

Q10. Royalty paid to non-residents is taxed under:

A) Capital Gains
B) Business income
C) DTA rules
D) Gift Tax

Answer: C
Explanation: Royalty tax is governed by DTA provisions if available.

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Q11. Foreign tax credit is available if:
A) Tax is paid outside Bangladesh
B) Income is not disclosed
C) Foreign government approves
D) Paid through Bangladeshi bank

Answer: A
Explanation: A valid proof of foreign tax paid is required.

Q12. Article 23 of DTA usually deals with:

A) Capital gains
B) Mutual Agreement Procedure
C) Methods of elimination of double taxation
D) Royalties

Answer: C
Explanation: This article covers how to avoid double taxation.

Q13. Bangladesh's DTAs are enforced by:

A) NBR
B) Ministry of Foreign Affairs
C) Bangladesh Bank
D) UN

Answer: A
Explanation: NBR applies DTA provisions in tax assessments.

Q14. Double taxation occurs due to:

A) Source-based taxation
B) Residence-based taxation
C) Both A and B
D) Capital gains exemption

Answer: C
Explanation: When both source and residence countries tax the same income.

Q15. Which income is not covered under DTAs?

A) Business income
B) Dividends
C) Gifts
D) Royalties

Answer: C
Explanation: DTAs do not cover inheritance or gift taxes.

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Q16. DTA relief can be claimed via:
A) IT return
B) Application to NBR
C) TDS certificate
D) All of the above

Answer: D
Explanation: Proper documentation must be attached for claiming DTA relief.

Q17. Which of the following is a DTA partner with Bangladesh?

A) UAE
B) USA
C) Canada
D) Brazil

Answer: C
Explanation: Canada has a DTA with Bangladesh; USA does not currently.

Q18. To claim foreign tax credit, taxpayer must:

A) Ignore Bangladesh tax
B) File return in Bangladesh
C) Have dual citizenship
D) Pay surcharge

Answer: B
Explanation: Claiming credit requires proper filing and proof of tax paid abroad.

Q19. DTA articles cover:

A) Scope
B) Definitions
C) Taxation rules by income type
D) All of the above

Answer: D
Explanation: DTAs are structured with multiple detailed articles.

Q20. Which is not a benefit of DTA?

A) Tax relief
B) Mutual cooperation
C) Double tax
D) Prevention of tax evasion

Answer: C
Explanation: DTAs aim to eliminate double tax, not cause it.

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Q21. OECD stands for:
A) Organisation for Economic Co-operation and Development
B) Office of Export Control and Duties
C) Online Economic Commission Directory
D) Overseas Economic Committee Division

Answer: A
Explanation: OECD model tax convention guides many DTAs.

Q22. Tax treaty overrides domestic law if:

A) Domestic law allows
B) It offers more benefit to taxpayer
C) High Court approves
D) Commissioner orders

Answer: B
Explanation: DTA prevails if it provides more favorable treatment.

Q23. Treaty shopping refers to:

A) Evasion using DTAs
B) Discount offers
C) Choosing best price
D) VAT refunds

Answer: A
Explanation: It’s when a person uses a third country’s DTA to avoid tax.

Q24. UN Model DTA favors:

A) Developed countries
B) Developing countries
C) Offshore banks
D) Investment firms

Answer: B
Explanation: UN model grants more taxing rights to source (developing) countries.

Q25. Taxation of employment income is generally:

A) At employer’s country
B) At place of work
C) At place of residence only
D) Exempt

Answer: B
Explanation: Employment income is usually taxed at the location of work.

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Q26. Tax credit is limited to:
A) Full amount of tax paid abroad
B) Tax payable in Bangladesh
C) Unlimited amount
D) VAT paid

Answer: B
Explanation: Credit cannot exceed the Bangladeshi tax on that income.

Q27. To avoid double taxation, taxpayer may:

A) File late return
B) Hide income
C) Use DTA provisions
D) Change nationality

Answer: C
Explanation: DTAs provide lawful relief mechanisms.

Q28. Residency test under DTA is based on:

A) Citizenship
B) Permanent home and vital interests
C) Business name
D) Tax paid

Answer: B
Explanation: DTA residency depends on place of abode and interests.

Q29. Tax authorities resolve disputes under:

A) Arbitration
B) Mutual Agreement Procedure (MAP)
C) Supreme Court
D) Tax day

Answer: B
Explanation: MAP is a mechanism under DTA for dispute resolution.

Q30. Non-residents must prove residency through:

A) Verbal statement
B) Tax Residency Certificate
C) Visa
D) Salary slip

Answer: B
Explanation: Proof of foreign residence is shown via TRC.

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 Chapter 20: International Taxation
Q1. International taxation deals with:
A) Local VAT issues
B) Taxation of cross-border income
C) Agricultural taxation
D) Tax on donations
Answer: B
Explanation: International taxation involves taxing income earned across multiple jurisdictions.

Q2. Transfer pricing rules are applied when:

A) Local companies do business together
B) Unrelated parties transact
C) Related entities across borders transact
D) NGOs operate abroad
Answer: C
Explanation: Transfer pricing applies to related parties operating in different tax jurisdictions.

Q3. The principle underlying transfer pricing is:

A) Cost-plus pricing
B) Arm’s length principle
C) Fair value principle
D) Double accounting rule
Answer: B
Explanation: Arm’s length means pricing should be as if parties were unrelated.

Q4. Bangladesh introduced formal transfer pricing rules under:

A) Section 78
B) Section 107A of ITO 1984
C) Section 44 of VAT Act
D) Section 32 of Customs Act
Answer: B
Explanation: Section 107A outlines the rules and documentation requirements for transfer
pricing.

Q5. The purpose of transfer pricing regulations is to:

A) Boost exports
B) Prevent revenue leakage
C) Offer rebates
D) Encourage imports

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 Answer: B
Explanation: Transfer pricing regulations ensure appropriate tax on cross-border related
transactions.

Q6. A "Permanent Establishment" (PE) under international tax laws refers to:
A) A fixed place of business in a foreign country
B) A temporary liaison office
C) A rented apartment
D) An offshore bank account
Answer: A
Explanation: PE is a fixed place through which a foreign enterprise conducts its business.

Q7. The OECD stands for:

A) Organization for Electronic Commerce Development
B) Organization for Economic Co-operation and Development
C) Offshore Economic Council Division
D) Office for Excise and Customs Duties
Answer: B
Explanation: OECD provides globally recognized tax standards and model conventions.

Q8. The goal of the BEPS project is to:

A) Promote exports
B) Avoid double taxation
C) Prevent tax base erosion and profit shifting
D) Encourage inward remittances
Answer: C
Explanation: BEPS aims to stop multinational companies from shifting profits to low-tax
countries.
Q9. BEPS stands for:
A) Bangladesh Economic Performance Survey
B) Base Erosion and Profit Shifting
C) Business Enhancement Pricing Standards
D) Broad Expenditure Policy System
Answer: B
Explanation: BEPS is a global tax avoidance issue addressed by the OECD.

Q10. Which of the following is not a recognized transfer pricing method?

A) Comparable Uncontrolled Price (CUP)
B) Resale Price Method
C) Cost Plus Method
D) VAT-exclusive Pricing Method

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 Answer: D
Explanation: The first three are accepted OECD transfer pricing methods.

Q11. Transfer pricing documentation includes:

A) Master file
B) Local file
C) Country-by-Country report
D) All of the above
Answer: D
Explanation: These are standard international documents for transparency in related-party
pricing.

Q12. CFC (Controlled Foreign Corporation) rules are used to:

A) Exempt foreign subsidiaries
B) Encourage capital transfer
C) Curb income shifting to low-tax countries
D) Reduce customs duty
Answer: C
Explanation: CFC rules tax passive income retained in low-tax jurisdictions.

Q13. The Double Taxation Agreement (DTA) prevails over domestic law when:
A) It imposes more tax
B) It provides beneficial treatment to taxpayer
C) Domestic law is silent
D) NBR instructs so
Answer: B
Explanation: DTAs override domestic laws if more favorable to the taxpayer.

Q14. In the absence of a DTA, Bangladesh may allow:

A) Double taxation
B) No tax
C) Unilateral tax credit
D) VAT refund
Answer: C
Explanation: The government allows unilateral relief under domestic rules if no treaty exists.

Q15. Thin capitalization rules prevent:

A) Over-reporting of income
B) Excessive interest deductions on loans from related parties
C) Underpayment of VAT
D) Overpricing exports

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 Answer: B
Explanation: These rules restrict debt-equity abuse for tax reduction.

Q16. Bangladesh joined the BEPS Inclusive Framework in:

A) 2016
B) 2017
C) 2019
D) 2021
Answer: B
Explanation: Bangladesh joined the BEPS framework in 2017.

Q17. Under the OECD guidelines, the primary objective of transfer pricing documentation is to:
A) Increase tax burden
B) Justify all expenses
C) Demonstrate compliance with the arm’s length principle
D) Avoid customs audit
Answer: C
Explanation: Documentation proves that prices are fair and at market value.

Q18. Treaty shopping refers to:

A) Changing tax status
B) Using tax havens
C) Exploiting DTAs through third countries
D) Earning through multiple treaties
Answer: C
Explanation: It’s a tax avoidance technique using more favorable DTAs indirectly.

Q19. Bangladesh has transfer pricing obligations when transactions exceed:

A) Tk. 10 lakh
B) Tk. 50 lakh
C) Tk. 3 crore
D) Tk. 10 crore
Answer: C
Explanation: Transfer pricing compliance begins when transactions exceed Tk. 3 crore.

Q20. Arm’s length price is determined based on:

A) Taxpayer preference
B) Market price between unrelated parties
C) Customs valuation
D) Auditor’s estimate
Answer: B
Explanation: It reflects what unrelated parties would have paid.

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Q21. Income from a foreign branch of a Bangladeshi company is:
A) Exempt
B) Taxed in foreign country only
C) Taxable in Bangladesh
D) Ignored
Answer: C
Explanation: Bangladesh taxes global income of residents.

Q22. Withholding tax on payments to non-residents is governed by:

A) Section 52
B) Section 50
C) DTA provisions
D) Minimum tax rules
Answer: C
Explanation: Tax deducted at source on foreign payments is guided by DTA, if available.

Q23. OECD transfer pricing guidelines recommend which method as most reliable?
A) Any applicable method
B) Resale Price Method
C) CUP Method
D) Profit Split Method
Answer: C
Explanation: Comparable Uncontrolled Price (CUP) is the most direct method.

Q24. The goal of international tax compliance is to:

A) Shift profits
B) Avoid penalties
C) Ensure fair taxation across countries
D) Hide foreign income

Answer: C
Explanation: Proper compliance promotes global tax fairness.

Q25. Treaty abuse may lead to:

A) Exemption
B) Penalty
C) Tax credit
D) Lower customs duty
Answer: B
Explanation: Misusing tax treaties is penalized under anti-abuse provisions.

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Q26. If no arm’s length price is used, tax authorities may:
A) Reject return
B) Adjust taxable income
C) Offer exemption
D) Reduce tax rates
Answer: B
Explanation: They can recompute income based on fair pricing.

Q27. Country-by-country reporting is mandatory for:

A) Multinational groups
B) Local firms
C) NGOs
D) Retailers
Answer: A
Explanation: MNCs must disclose global tax and income allocation.

Q28. Which is a risk in international taxation?

A) Tax holiday
B) Transfer pricing manipulation
C) Budget surplus
D) Stock dividend
Answer: B
Explanation: It allows profit shifting to low-tax jurisdictions.

Q29. A resident Bangladeshi earns interest in Malaysia. The income is:

A) Ignored
B) Taxed only in Malaysia
C) Taxable in Bangladesh with relief
D) Non-taxable

Answer: C
Explanation: Global income is taxed in Bangladesh; relief may apply under DTA.

Q30. The DCT may adjust pricing under Section 107C if:
A) Customs value is lower
B) VAT is not paid
C) Transfer pricing is manipulated
D) Import documents are missing
Answer: C
Explanation: Section 107C empowers DCT to make adjustments in transfer pricing cases.

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 Chapter 21: Tax Planning and Evasion
Q1. Tax planning refers to:
A) Evading tax through illegal means
B) Planning to avoid taxes entirely
C) Arranging finances legally to minimize tax liability
D) Delaying tax payments indefinitely
Answer: C
Explanation: Tax planning is a legal and legitimate method of arranging one’s financial affairs
to reduce tax burden using provisions of the law.

Q2. Which of the following is illegal?

A) Tax planning
B) Tax evasion
C) Tax avoidance
D) Tax compliance
Answer: B
Explanation: Tax evasion involves illegal means like hiding income or false reporting.
Q3. Tax avoidance is:
A) Always illegal
B) Tax fraud
C) Use of legal loopholes to reduce tax
D) Same as evasion
Answer: C
Explanation: Tax avoidance is legal but often seen as ethically questionable; it exploits gaps in
the tax law.

Q4. Which of the following is an example of tax planning?

A) Underreporting business income
B) Investing in approved pension funds
C) Creating fictitious expenses
D) Operating under a false name
Answer: B
Explanation: Investing in tax-saving instruments is a common legal method of tax planning.
Q5. Claiming false depreciation is an example of:
A) Planning
B) Avoidance
C) Evasion
D) Optimization

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 Answer: C
Explanation: Claiming inflated or false depreciation is illegal tax evasion.

Q6. Which is not a characteristic of tax planning?

A) Lawful
B) Goal-oriented
C) Exploits legal loopholes
D) Involves hiding income
Answer: D
Explanation: Hiding income is a feature of tax evasion, not planning.

Q7. Which term describes arranging financial activities to get maximum tax benefit legally?
A) Tax evasion
B) Tax assessment
C) Tax planning
D) Tax appeal
Answer: C

Q8. A salaried individual claiming rebate for life insurance premium is practicing:
A) Tax evasion
B) Tax planning
C) Tax deferral
D) Tax misreporting
Answer: B

Q9. Tax audit helps in detecting:

A) Planning
B) Avoidance
C) Evasion
D) Investment
Answer: C
Explanation: Tax audits are key tools to detect evasion and ensure compliance.

Q10. Misclassifying revenue expenses as capital expenses is an example of:

A) Smart tax planning
B) Unintentional error
C) Tax avoidance
D) Tax evasion
Answer: D

Q11. One of the key objectives of tax planning is:

A) To mislead tax officers

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B) To exploit tax havens
C) To minimize tax legally
D) To show higher profits
Answer: C

Q12. Investing in government bonds for rebate is:

A) Avoidance
B) Planning
C) Non-compliance
D) Penalty avoidance
Answer: B

Q13. Which of the following is a consequence of tax evasion?

A) Refunds
B) Appreciation
C) Penalties and prosecution
D) Investment allowance
Answer: C

Q14. Proper tax planning leads to:

A) Evasion
B) Financial instability
C) Optimized cash flow and savings
D) Criminal liability
Answer: C

Q15. Shell companies are often used for:

A) Tax refund claims
B) Ethical planning
C) Evasion or laundering
D) Filing TDS
Answer: C

Q16. Transfer pricing abuse is a form of:

A) Legal deferral
B) Rebate
C) Tax evasion
D) Compliance
Answer: C

Q17. Use of offshore accounts to hide income is:

A) Planning

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B) Avoidance
C) Investment strategy
D) Evasion
Answer: D

Q18. Which of the following is most ethical?

A) Tax planning
B) Tax evasion
C) False return filing
D) Underreporting sales
Answer: A

Q19. If a taxpayer legally invests in DPS and claims rebate, it is:

A) Tax evasion
B) Tax avoidance
C) Tax planning
D) Tax shifting
Answer: C

Q20. Deliberate suppression of income attracts:

A) Tax rebate
B) Warning only
C) Interest and penalty
D) Investment allowance
Answer: C

Q21. Black money refers to:

A) Capital investment
B) Disclosed income
C) Undisclosed/illegal income
D) Salary income
Answer: C

Q22. Choosing between two legal options to minimize tax is:

A) Evasion
B) Planning
C) Avoidance
D) Bribery
Answer: B

Q23. Making personal expenses appear as business expenses is:

A) Planning

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B) Common practice
C) Evasion
D) Optimization
Answer: C

Q24. Disclosure of all income sources reflects:

A) Evasion
B) Ethical tax practice
C) Non-compliance
D) Loophole usage
Answer: B

Q25. Advance tax payment is a part of:

A) Evasion
B) Planning
C) Avoidance
D) Evasion defense
Answer: B

Q26. Tax avoidance is considered unethical because:

A) It's legal
B) It reduces government revenue using loopholes
C) It is always evasion
D) It results in no tax
Answer: B

Q27. GAAR stands for:

A) Government Anti Audit Rule
B) General Anti-Avoidance Rule
C) General Assessment & Audit Regulation
D) Government Agricultural Assistance Rule
Answer: B

Q28. Which of the following strategies is not permissible under law?

A) Claiming rebate for actual investment
B) Structuring salary for exemption
C) Reporting false rental income
D) Availing 44 rebates legally
Answer: C

Q29. An audit trail helps in detecting:

A) Planning

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B) Avoidance
C) Evasion
D) Allowance
Answer: C

Q30. Effective tax planning must ensure:

A) Evasion
B) Maximum tax refund
C) Compliance with law
D) Tax sheltering
Answer: C

Chapter 22: Ethical Standards in Tax Practice

Q1. Ethics in taxation refers to:
A) Filing maximum deductions
B) Helping clients avoid tax
C) Honesty, integrity, and compliance with tax laws
D) Manipulating numbers for clients
Answer: C
Explanation: Ethical tax practice demands transparency, legal compliance, and fairness.

Q2. Which of the following is unethical for a tax practitioner?

A) Maintaining client confidentiality
B) Advising on legitimate tax savings
C) Submitting false returns knowingly
D) Using updated tax laws
Answer: C
Explanation: Filing incorrect information knowingly is a serious ethical and legal violation.

Q3. A professional accountant must comply with:

A) Only local laws
B) Only company policy
C) Code of Ethics issued by relevant authority (e.g., IFAC, ICAB)
D) Verbal client instructions
Answer: C
Explanation: Accountants are bound by globally recognized ethical frameworks such as those
from IFAC.
Q4. Confidentiality means:
A) Publishing client information

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B) Sharing details with family
C) Keeping client information private unless legally required to disclose
D) Giving data to other clients
Answer: C

Q5. Integrity in tax practice includes:

A) Maximizing tax rebate
B) Making illegal suggestions to clients
C) Avoiding falsehood and deception
D) Finding hidden income
Answer: C

Q6. Objectivity is compromised when:

A) You act independently
B) You have personal interest in the client’s outcome
C) You follow due procedure
D) You reject bribes
Answer: B
Explanation: Personal interest leads to bias, breaching objectivity.

Q7. Independence in tax advisory means:

A) Refusing to meet clients
B) Unbiased and uninfluenced professional judgment
C) Rejecting all payments
D) Ignoring tax rules
Answer: B

Q8. Professional competence requires:

A) Minimum qualifications only
B) Continuous professional education and skill updates
C) No learning after certification
D) Political connections
Answer: B

Q9. Which of the following promotes ethical tax compliance?

A) Bribing tax officers
B) Transparent record keeping
C) Double accounting
D) Ignoring return filing
Answer: B

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Q10. Whistleblowing in tax refers to:
A) Filing late
B) Notifying authorities of unlawful practices
C) Evading VAT
D) Transferring funds abroad
Answer: B

Q11. Conflict of interest must be:

A) Ignored
B) Hidden
C) Disclosed and managed
D) Used to advantage
Answer: C

Q12. Professional negligence in tax can result in:

A) Bonus
B) No consequence
C) Disciplinary action and legal liability
D) Promotion
Answer: C

Q13. Which of the following is part of ethical behavior?

A) Misleading clients for benefit
B) Avoiding legal requirements
C) Ensuring fair tax reporting
D) Ignoring mistakes
Answer: C

Q14. A tax consultant preparing returns without verifying source documents is:
A) Efficient
B) Ethical
C) Negligent
D) Fast
Answer: C

Q15. Which principle requires a professional not to associate with misleading information?
A) Objectivity
B) Integrity
C) Professional behavior
D) Confidentiality
Answer: B

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Q16. A tax advisor should refuse service when:
A) Client is salaried
B) Client wants illegal help
C) Client is rich
D) Client owns multiple firms
Answer: B

Q17. Ethical tax practice ensures:

A) Increased evasion
B) Less tax collection
C) Higher client loyalty and trust
D) Complicated procedures
Answer: C

Q18. Tax professionals must not:

A) Promote education
B) Misrepresent laws
C) Follow rules
D) Keep records
Answer: B

Q19. Tax practitioners are guided by:

A) Random advice
B) Friends’ opinions
C) Professional conduct codes and national laws
D) Street experience
Answer: C

Q20. Breach of ethical standards may result in:

A) Praise
B) Penalties, license suspension, or criminal action
C) Salary hike
D) Fast-track promotion
Answer: B

Q21. Which is not part of ethical responsibilities?

A) Upholding public interest
B) Submitting false documents
C) Staying updated on tax law
D) Being honest
Answer: B

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Q22. ICAB’s Code of Conduct applies to:
A) Students only
B) Retired members
C) Practicing Chartered Accountants
D) VAT officers only
Answer: C

Q23. Giving assurance on tax return without proper review is:

A) Ethical
B) Convenient
C) Acceptable
D) Improper and negligent
Answer: D

Q24. Which of the following ensures compliance with ethics?

A) Ignoring the law
B) Client confidentiality
C) Tax fraud
D) Hiding documents
Answer: B

Q25. Ethical advisors:

A) Encourage evasion
B) Suggest illegal rebates
C) Guide taxpayers honestly
D) Hide income sources
Answer: C

Q26. A tax officer asks for a bribe — what is the ethical response?
A) Pay and proceed
B) Complain to NBR
C) Ignore
D) Discuss with peers
Answer: B

Q27. Professional misconduct includes:

A) Issuing audit report without audit
B) Refusing bribe
C) Using updated software
D) Educating clients
Answer: A

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Q28. A tax consultant who violates client trust can be:
A) Promoted
B) Appointed auditor
C) Disqualified and fined
D) Paid more
Answer: C

Q29. Honest tax reporting:

A) Reduces penalties
B) Reduces reputation
C) Is risky
D) Is discouraged
Answer: A

Q30. Which of the following is best for maintaining ethical tax practice?
A) Following tax rumors
B) Using old tax rules
C) Continuous learning and integrity
D) Working without documents
Answer: C

Chapter 23: Recent Amendments and Case Laws

Q1. Finance Acts in Bangladesh take effect from:
A) January 1
B) July 1
C) March 31
D) June 30
Answer: B
Explanation: The fiscal year in Bangladesh begins on July 1; all tax changes become effective
from that date.

Q2. The Finance Act is passed by:

A) NBR
B) Parliament
C) Supreme Court
D) Ministry of Finance
Answer: B
Explanation: The national Parliament passes the Finance Act annually to modify tax laws.

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Q3. Recent Finance Acts have emphasized:
A) Reducing income tax rates
B) Widening tax base and automation
C) Granting more exemptions
D) Avoiding VAT reform
Answer: B
Explanation: Reforms include digital return filing, eTIN, and limiting exemptions to increase
tax revenue.

Q4. The new VAT & SD Act was implemented in:

A) 2012
B) 2015
C) 2019
D) 2021
Answer: C
Explanation: Though enacted earlier, the VAT & SD Act, 2012 was implemented from July 1,
2019.

Q5. Under a recent amendment, the penalty for non-filing of income tax return is:
A) 5% of total income
B) 10% of tax payable or Tk. 5,000, whichever is higher
C) Tk. 2,000 fixed
D) Exemption granted
Answer: B
Explanation: The latest Finance Acts maintain penalties to enforce compliance.

Q6. eReturn system allows:

A) Paper return filing
B) Online income tax return submission
C) Verbal submission of return
D) Deferred tax
Answer: B
Explanation: The eReturn platform allows secure digital return filing.

Q7. Minimum tax under recent Finance Act is applicable on:

A) Only salaried persons
B) Turnover or location-based rates
C) Business loss cases only
D) Exporters only
Answer: B
Explanation: Minimum tax depends on gross receipts and geographical location.

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Q8. A major amendment now requires mandatory return filing for:
A) Students
B) Bank account holders
C) Any person owning a motor vehicle or credit card
D) Agricultural workers
Answer: C
Explanation: People engaged in high-value transactions must file returns, even if exempt.

Q9. Recent case laws highlight:

A) Tolerance for non-compliance
B) Strict interpretation of exemptions
C) Full refund of all taxes
D) Tax not applicable on corporate income
Answer: B
Explanation: Courts increasingly require strict compliance and narrow interpretation of
exemptions.

Q10. A landmark case on investment rebate held that:

A) Any investment qualifies
B) Only declared and eligible investments qualify
C) Foreign investments get more rebate
D) No audit is required
Answer: B
Explanation: The court ruled that only eligible and disclosed investments qualify for rebates.

Q11. A recent tax case declared that fake donation receipts:

A) Can be verified
B) Are permissible
C) Justify full deduction
D) Do not qualify for exemption
Answer: D
Explanation: Fake or unverified donations are disallowed as deductions.

Q12. Finance Act changes income slab rates:

A) Mid-year
B) Each quarter
C) Annually via Finance Bill
D) Every 5 years
Answer: C
Explanation: Slab changes are typically introduced each year in the national budget.

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Q13. Changes in VAT rate for certain services must be notified via:
A) Facebook
B) Circular only
C) SRO (Statutory Regulatory Order)
D) Newspaper
Answer: C
Explanation: Tax rate changes are published via SROs by NBR.

Q14. A court ruling emphasized that capital gains from land sale are taxable when:
A) Declared by buyer
B) Not shown in books
C) Documented in registered deed
D) Informally agreed
Answer: C
Explanation: Registered document triggers capital gains recognition for tax.

Q15. The recent case of DIT vs. XYZ Ltd. addressed:

A) VAT evasion
B) Transfer pricing
C) Investment rebate misuse
D) Salary misclassification
Answer: B
Explanation: This landmark case clarified transfer pricing adjustment procedures.

Q16. Finance Act 2023 introduced surcharge on:

A) Tobacco only
B) Net wealth above Tk. 3 crore
C) Salaried income
D) Export proceeds
Answer: B
Explanation: High-net-worth individuals face surcharge based on asset value.

Q17. A recent court decision ruled that unexplained credit in bank account is:
A) Not taxable
B) Business turnover
C) Deemed income under section 19
D) Gift
Answer: C
Explanation: Unexplained deposits may be treated as undisclosed income.
Q18. SROs issued by NBR must be:
A) Vague

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B) Registered with RJSC
C) Published in official gazette
D) Printed in private magazine
Answer: C
Explanation: All tax SROs are legally enforceable only after gazette notification.

Q19. Revised return is now allowed only if:

A) Filed before due date
B) Filed before assessment completion
C) No TDS is involved
D) Submitted manually
Answer: B

Q20. Current VAT Act allows input tax credit if:

A) Supplier is VAT-registered and invoice is valid
B) Cash is paid
C) Goods are delivered without documents
D) Only VAT is shown
Answer: A

Q21. A landmark judgment clarified that agricultural income is exempt only if:
A) Sale is within city
B) Reported annually
C) Land is located within Bangladesh
D) Buyer is TIN holder
Answer: C

Q22. The 2023 amendment made return submission mandatory for:

A) Anyone crossing immigration
B) Persons receiving government contracts
C) NGO workers
D) Overseas travelers only
Answer: B

Q23. A recent NBR circular clarified that tax credit is disallowed if:
A) Return is verified
B) TIN is mentioned
C) Invoice lacks VAT registration number
D) Payment is in cheque
Answer: C

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Q24. Minimum tax under section 82C is based on:
A) Net profit
B) Gross receipts
C) Loan balance
D) Asset value
Answer: B

Q25. Case law clarified that salary components must be:

A) Negotiable
B) Reported separately (basic, allowances, etc.)
C) Paid monthly only
D) Deducted from gross salary
Answer: B

Q26. Which amendment introduced e-TDS return requirement?

A) Finance Act 2018
B) Finance Act 2021
C) Finance Act 2022
D) Finance Act 2023
Answer: C

Q27. Recent case law clarified that rental income is taxable even if:
A) Lease is informal
B) Landlord is abroad
C) Rent is unrecorded
D) Property is in rural area
Answer: B

Q28. 2023 budget expanded advance tax collection points to include:

A) Shopkeepers
B) Importers and land developers
C) Exporters
D) Utility providers
Answer: B

Q29. As per recent circulars, investment rebates are disallowed if:

A) Declared before due date
B) Exceeded salary
C) No proof submitted
D) Assessee is a female
Answer: C

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Q30. Landmark case on unexplained wealth held that:
A) Assets without explanation are exempt
B) Ownership is irrelevant
C) Assessee must prove the source
D) Accused can wait 5 years
Answer: C

Chapter 24: Model Questions and Summary (Full Syllabus Review)

Q1. TDS on contractor payment is made under:
A) Section 51
B) Section 52
C) Section 53
D) Section 50
Answer: B
Explanation: Section 52 covers tax deduction at source for contractors and sub-contractors.
Q2. The standard VAT rate under VAT & SD Act, 2012 is:
A) 5%
B) 10%
C) 15%
D) 20%
Answer: C
Explanation: VAT is generally charged at 15% on taxable goods and services.
Q3. Taxable income of a company includes:
A) Exempt interest
B) Capital gains
C) Agricultural income
D) Donation income
Answer: B
Explanation: Capital gains are part of taxable income for companies.

Q4. Minimum tax is applicable based on:

A) Business loss
B) Turnover/Gross receipts
C) Income from salary
D) Donations
Answer: B
Explanation: Minimum tax is levied on gross receipts regardless of profit/loss.

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Q5. Universal Self-Assessment is governed by:
A) Section 75
B) Section 82C
C) Section 83
D) Section 85
Answer: B

Q6. Investment rebate is allowed under:

A) Section 44
B) Section 52
C) Section 82BB
D) Section 29
Answer: A

Q7. Import VAT is collected by:

A) NBR
B) Income Tax Circle
C) Bangladesh Customs
D) Ministry of Trade
Answer: C

Q8. Tax holiday is a:

A) Refund
B) Rebate
C) Period of exemption
D) TDS
Answer: C

Q9. Transfer Pricing applies to:

A) Domestic sales
B) Cross-border related party transactions
C) Donation receipts
D) Agricultural income
Answer: B

Q10. Filing of eTIN is mandatory for:

A) All taxpayers
B) Only companies
C) Retired persons
D) NGOs
Answer: A

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Q11. The Finance Act is passed by:
A) Supreme Court
B) NBR
C) Parliament
D) ICAB
Answer: C

Q12. Which tax is non-creditable under VAT?

A) VAT
B) SD (Supplementary Duty)
C) TDS
D) Excise
Answer: B

Q13. TDS certificate must be issued within:

A) 3 days
B) 7 days
C) 15 days
D) 30 days
Answer: C

Q14. Case law is used in taxation to:

A) Create exemptions
B) Interpret tax provisions
C) Amend Finance Act
D) Issue rebates
Answer: B

Q15. Income from export proceeds is subject to:

A) Section 52
B) Section 53BB
C) Section 53A
D) Section 50
Answer: B

Q16. VAT return is filed:

A) Monthly
B) Annually
C) Quarterly
D) Weekly
Answer: A

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Q17. Wealth surcharge applies when net wealth exceeds:
A) Tk. 1 crore
B) Tk. 2 crore
C) Tk. 3 crore
D) Tk. 5 crore
Answer: C

Q18. Advance tax is paid in how many installments?

A) 2
B) 3
C) 4
D) 1
Answer: C

Q19. Non-resident’s income is taxed under:

A) Section 107
B) DTA provisions
C) Investment rules
D) Section 29
Answer: B

Q20. Presumptive tax applies to:

A) Business with loss
B) Contractors
C) Transport operators under fixed rate
D) Professionals
Answer: C

Q21. Filing a return after due date can attract:

A) Surcharge only
B) Rebate
C) Penalty and interest
D) No consequence
Answer: C

Q22. Ethical standards in tax practice require:

A) Filing false returns
B) Maximizing illegal refunds
C) Honesty and competence
D) Avoiding record-keeping
Answer: C

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Q23. GAAR refers to:
A) General Anti-Avoidance Rule
B) General Assessment of Agricultural Returns
C) General Allowance for Accounting Risk
D) Government Asset Adjustment Rule
Answer: A

Q24. A Taxpayer Charter includes:

A) Rates of TDS
B) Rights and responsibilities
C) List of fines
D) eTIN forms
Answer: B

Q25. Which of the following is a recent trend in tax administration?

A) Manual return only
B) Ignoring TIN
C) Full digitization
D) Rebate removal
Answer: C

Q26. TDS on interest on securities is under:

A) Section 53
B) Section 52
C) Section 50
D) Section 54
Answer: A

Q27. Which of the following is tax-exempt?

A) Business profit
B) Dividend from listed company up to Tk. 50,000
C) Capital gains on shares
D) Rental income
Answer: B

Q28. The “arm’s length principle” is related to:

A) GAAR
B) Transfer pricing
C) VAT adjustment
D) Donation valuation
Answer: B

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Q29. Filing of revised return is allowed:
A) After assessment is done
B) Within 60 days of return
C) Before assessment is completed
D) Never
Answer: C

Q30. A Permanent Establishment (PE) refers to:

A) Temporary stall
B) Fixed base of a foreign entity in Bangladesh
C) Apartment of employee
D) Home office
Answer: B

✅ Top 50 Tax MCQs for ICAB Certificate Level Exam

1. What is the main objective of imposing income tax?
A. Encourage exports
B. Control inflation
C. Generate government revenue
D. Promote savings
Answer: C
Explanation: The primary purpose of income tax is to raise funds for public services and
infrastructure.

2. Which law governs income tax in Bangladesh?

A. Customs Act 1969
B. VAT Act 2012
C. Income-tax Ordinance, 1984
D. Finance Act 1991
Answer: C
Explanation: The Income-tax Ordinance, 1984 is the main legal framework for income tax in
Bangladesh.

3. Income tax is a type of:

A. Indirect tax
B. Wealth tax
C. Direct tax
D. Service tax

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 Answer: C
Explanation: It is directly imposed on an individual’s or entity’s income.

4. What is the assessment year?

A. The year income is earned
B. The year before income is earned
C. The year after income is earned
D. The year income is deposited
Answer: C
Explanation: Assessment year is the year following the income year in which tax is assessed.

5. Who is treated as a “resident” in Bangladesh?

A. Stays 100 days in a year
B. Pays tax in Bangladesh
C. Stays 182 days or more in a year
D. Holds Bangladeshi passport
Answer: C
Explanation: Staying for 182 days or more in Bangladesh in an income year qualifies someone
as a resident.

6. The term “assessee” means:

A. Government employee
B. Taxpayer
C. Inspector
D. Business only
Answer: B

Explanation: An assessee is a person liable to pay tax under the ordinance.

7. Which of the following is not included in “person” under tax law?

A. Individual
B. Company
C. Government
D. Tree
Answer: D
Explanation: “Person” includes individuals, companies, firms, associations, etc.—not inanimate
objects.

8. How many heads of income are there in the Income Tax Ordinance?
A. 4
B. 5
C. 6

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D. 3
Answer: C
Explanation: There are 6 heads: salary, interest on securities, house property, agriculture,
business/profession, and other sources.

9. Dividend income is generally:

A. Fully exempt
B. Fully taxed
C. Taxed at a reduced rate
D. Tax-free after 10 years
Answer: C
Explanation: Dividend income enjoys a concessional tax rate under certain conditions.

10. Agricultural income in Bangladesh is:

A. Fully taxable
B. Partially exempt
C. Fully exempt
D. Taxed above Tk. 300,000
Answer: C

Explanation: Agricultural income is exempt under Section 4(3) of the ordinance if specific
conditions are met.

11. What is self-assessment?

A. Done by tax inspector
B. Voluntary declaration of income by taxpayer
C. Audit by NBR
D. Estimated by bank
Answer: B
Explanation: Self-assessment allows taxpayers to assess and declare their tax liabilities.

12. The deadline for filing individual income tax return is:
A. June 30
B. March 31
C. December 31
D. November 30
Answer: D
Explanation: Without extension, individual returns must be submitted by November 30.

13. Which form is used by individuals to file tax returns?

A. IT-12B
B. IT-15

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C. IT-10GA
D. IT-11GA
Answer: D
Explanation: Form IT-11GA is designated for individual taxpayers.

14. Gratuity received from a government employee is:

A. Fully taxable
B. Partially exempt
C. Fully exempt
D. Exempt up to Tk. 300,000
Answer: C
Explanation: It is fully exempt under Section 4(3).

15. House Rent Allowance (HRA) exemption is:

A. Actual HRA
B. 50% of basic salary
C. Tk. 300,000
D. Least of the above
Answer: D
Explanation: The exemption is the lowest of: actual HRA received, 50% of basic salary, or Tk.
300,000.

16. Fringe benefits provided to employees are:

A. Exempt
B. Fully taxable
C. Perquisites and taxable
D. Considered business expense
Answer: C
Explanation: Fringe benefits are considered perquisites and are taxable under salary.

17. Medical allowance without bills is exempt up to:

A. Tk. 10,000
B. Tk. 30,000
C. Tk. 50,000
D. Fully taxable
Answer: B

Explanation: Cash medical allowance is exempt up to Tk. 30,000 without bills.

18. Salary is taxable on:

A. Receipt basis
B. Due basis

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C. Whichever is earlier
D. At year-end
Answer: C
Explanation: Salary is taxed on “due or receipt basis, whichever is earlier”.

19. Interest from government securities is taxed under:

A. Business
B. Other Sources
C. Capital Gains
D. Interest on Securities
Answer: D
Explanation: It has its own head under Section 22.

20. TDS on interest from government securities for individuals is:

A. 5%
B. 10%
C. 15%
D. 20%
Answer: B
Explanation: TDS rate is 10% for individuals (subject to change via Finance Act).

21. Prize bond interest up to Tk. 5,000 is:

A. Fully taxable
B. Partially exempt
C. Fully exempt
D. Taxable if from private bank
Answer: C
Explanation: Interest on prize bonds is exempt up to Tk. 5,000 under Section 44(2)(b).
22. TDS deducted under section 50 (Interest on Securities) is:
A. Final settlement
B. Minimum tax
C. Adjustable against total tax liability
D. Refundable only
Answer: C
Explanation: TDS on interest income is adjustable when calculating total tax liability.

23. Income from house property is chargeable if:

A. Used for self-occupation
B. Vacant
C. Let out or deemed to be let out
D. Used for agriculture

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 Answer: C
Explanation: Only let-out or deemed let-out properties are taxed under this head.

24. Standard deduction allowed from Net Annual Value of house property:
A. 10%
B. 20%
C. 30%
D. 40%
Answer: C
Explanation: A flat 30% deduction is allowed under Section 24 for repair/maintenance.

25. Interest on borrowed capital for self-occupied property is deductible up to:

A. Tk. 200,000
B. Tk. 300,000
C. Tk. 500,000
D. Full amount
Answer: B
Explanation: Tk. 300,000 is the maximum deduction allowed for interest on loan for self-
occupied house.

26. Rent from vacant land is taxed under:

A. House Property
B. Business Income
C. Capital Gains
D. Other Sources
Answer: D
Explanation: It does not fall under house property; taxed under Other Sources.

27. Agricultural income must be derived from:

A. Land anywhere
B. Land in Bangladesh used for agriculture
C. Contract farming
D. Livestock farming
Answer: B
Explanation: Only income from land in Bangladesh used for agricultural purposes qualifies.

28. Income from fisheries is treated as:

A. Agricultural Income
B. Business Income
C. Other Sources
D. Exempt

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 Answer: B
Explanation: Fish farming is not considered agricultural activity.

29. Poultry farming income is:

A. Agricultural Income
B. Business Income
C. Exempt
D. Other Sources
Answer: B
Explanation: It is treated as a business activity, not agriculture.

30. Income from nursery business is exempt if:

A. Income is below Tk. 100,000
B. Plants are grown on owned agricultural land
C. Plants are purchased and resold
D. Nursery is licensed
Answer: B
Explanation: If plants are cultivated on agricultural land, income is exempt.

31. Business income is computed under which section?

A. Section 20
B. Section 21
C. Section 22
D. Section 33
Answer: A
Explanation: Section 20 covers income from business/profession.

32. Speculative business income is:

A. Added to salary
B. Exempt
C. Treated separately
D. Treated as capital gain
Answer: C
Explanation: Speculative transactions like share trading are taxed separately.

33. Business loss can be carried forward for:

A. 3 years
B. 4 years
C. 6 years
D. 8 years
Answer: C
Explanation: Up to 6 years, subject to conditions.

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34. Capital gains arise from:
A. Sale of agricultural goods
B. Sale of services
C. Transfer of capital asset
D. Sale of stock-in-trade
Answer: C
Explanation: Gains from sale/transfer of capital assets are considered capital gains.

35. Capital asset does not include:

A. Personal effects
B. Shares
C. Buildings
D. Land
Answer: A
Explanation: Personal effects like clothing, furniture are excluded.

36. Capital gains are taxable under:

A. Section 30
B. Section 31
C. Section 32
D. Section 35
Answer: C
Explanation: Section 32 of ITO 1984 deals with capital gains.

37. Indexed cost of acquisition is allowed for:

A. Long-term assets
B. Depreciable assets
C. Short-term assets
D. Inherited assets only
Answer: A
Explanation: Indexation adjusts cost of long-term assets for inflation.

38. Capital gain on sale of listed shares (held >1 year) is:
A. Fully taxable
B. Partly exempt
C. Fully exempt
D. Subject to 10% tax
Answer: C
Explanation: Exempt under Section 19AAA if DSE transaction tax is paid.
39. Cost of acquisition for inherited property is:
A. Zero

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B. Cost to previous owner
C. Book value
D. Market value
Answer: B

Explanation: Inherited assets retain original cost for tax computation.

40. Remuneration of part-time director is taxed under:

A. Salary
B. Business
C. Other Sources
D. Exempt
Answer: C
Explanation: Since not a full-time employee, income is “Other Sources”.

41. Family pension received by legal heir is taxed under:

A. Salary
B. Pension
C. Other Sources
D. Business Income
Answer: C
Explanation: It is not treated as salary but income from “Other Sources”.

42. Interest on fixed deposits is taxed under:

A. Salary
B. Business Income
C. Capital Gains
D. Other Sources
Answer: D
Explanation: Interest not related to business or employment falls under this head.

43. TDS on bank FDR interest (for individuals) is:

A. 5%
B. 10%
C. 15%
D. 20%
Answer: B
Explanation: Usually 10%, subject to yearly budget updates.

44. Gifts from non-relatives above Tk. 50,000 are:

A. Fully exempt
B. Fully taxable

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C. Exempt if in kind
D. Taxable only if in cash
Answer: B
Explanation: Gifts from non-relatives exceeding Tk. 50,000 are taxable.

45. Tax rate on lottery winnings is:

A. 10%
B. 15%
C. 20%
D. 30%
Answer: D
Explanation: Lottery or game show income is taxed at a flat 30%.

46. Advance money forfeited (e.g., for sale of property) is:

A. Capital gain
B. Other Sources
C. Business income
D. Exempt
Answer: B
Explanation: Treated as income under Other Sources.

47. Sub-letting income received by tenant is:

A. House Property
B. Business Income
C. Other Sources
D. Exempt
Answer: C
Explanation: Tenant is not owner, so rental income is “Other Sources”.
48. Casual income includes:
A. Salary
B. Bonus
C. Game show winnings
D. Rent
Answer: C
Explanation: Casual income includes unexpected income like lottery or prize money.

49. Gifts from relatives are:

A. Fully taxable
B. Exempt up to Tk. 100,000
C. Fully exempt
D. Taxable after Tk. 50,000

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 Answer: C
Explanation: Gifts from specified relatives are fully exempt under tax law.

50. Income not classified under any specific head is taxed under:
A. Exempt Income
B. Capital Gains
C. Other Sources
D. House Property
Answer: C
Explanation: “Other Sources” is the residual head under Section 33.

Jamal Hossain ( Department of Finance and Banking, JKKNIU )

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