Definition Page 1 of 4

Taxation 1
Definition

01. Agricultural income [Section 2(1)]: “agricultural income” means-

(a) any income derived from any land in Bangladesh and used for agricultural purposes-
(i) by means of agriculture; or
(ii) by the performance of any process ordinarily employed by a cultivator to render
marketable the produce of such land; or
(iii) by the sale of the produce of the land raised by the cultivator in respect of which
no process, other than that to render the produce marketable, has been performed; or
(iv) by granting a right to any person to use the land for any period; or
(b) any income derived from any building which-
(i) is occupied by the cultivator of such land where any process is carried on to render the
produce of land
(ii) is on, or in the immediate vicinity of such land; and
(iii) is required by the cultivator for dwelling or store or other out-house by reason of his
connection with such land.
02. Amalgamation [Section 2(2)]: “amalgamation” in relation to companies, means the merger of
one or two or more companies with another or to from one company (being merged is amalgamating
and merged is amalgamated company) in such a manner that by virtue of, and for reasons
attributable to the merger- [Kn-nd-10]
(a) all property of amalgamating company, becomes the property of amalgamated company.
(b) all liabilities of amalgamating company, becomes the liabilities of amalgamated company.
(c) the shareholders holding not less than nine-tenths in value of the share in the amalgamating
company become shareholders of the amalgamated company.

03. Annual Value [Section 2(3)]: “annual value” shall be deemed to be-
(a) in relation to any property let out-
(i) the sum for which property might reasonably be expected to let from year to year or
(ii) where the annual rent in respect thereof is in excess of the sum referred to in paragraph
(i) ,the amount of the annual rent.
04. Assessee [Section 2(7)]: “Assessee”, means a person by whom any tax other sum of money is
payable under this ordinance, and includes-
(a) who is assessable;
(b) who is required to file a return under section 75, 89, 91;
(c) who desires to be assessed and submits his return; and
(d) who is deem to be an assessee or assessee in default.
05. Assessment [Section 2(8)]: “assessment” with the grammatical variations and cognate
expressions, includes reassessment and additional or further assessment;

06. Assessment Year [Section 2(9)]: “assessment year” means- [Kn-mj-10]

-the period of twelve months commencing on the first day of July every year
-included any such period which is deemed, under the provision of the ITO 1984.

07. Business [Section 2(14)]: “business” includes any trade, commerce or manufacture or any
adventure or concern in the nature of trade, commerce or manufacture.

08. Capital Asset [Section 2(15)]: “capital asset” means property of any kind held by assessee excluding-
(a) any stock in trade
(b) personal effect, i.e. wearing apparel, jewellery, furniture etc
(c) agricultural land in Bangladesh, other than land-
(i) in any area within municipality by whatever name called, or a cantonment Board
having a population of not less than 10,000 before the first day of Income year.

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 Definition Page 2 of 4

(ii) in any area 5 miles of the municipality or a cantonment board referred to in (i)
above.

09. Company [Section 2(20)]: “company” means a company as defined in the Companies Act. 1994
and includes-
(a) a body corporation established or constituter by or under any law for the time being in force;
(b) any nationalized banking or other financial institute, insurance body and industrial or business
enterprise;
(bb) an association or combination of persons, called by whatever name, if any of such persons is a
company as defined in [the Companies Act, 1994, sec 18]
(bbb) any association or body incorporated by or under the laws of a country outside Bangladesh;
and;
(d) any foreign association or body, not incorporated by or under any law, which the Board may,
by general or special order, declare or to be a company for the purposes of this Ordinance;

10. Dividend [Section 2(26)]: “dividend” includes-

(a) any distribution of profit by any company to its shareholders whether capitalized or not;
(b) any loan or advance by a private company to its shareholders to the extent to which the
company possesses accumulated profit;
But does not include-
(i) any bonus share issued by a company and any advance or loan made to a shareholder in the
ordinary course of its business.

11. Fair Market Value [Section 2(30)]:”fair market value” means, in relation to capital asset-
(a) the open market price of the asset on the relevant day and where such price is not available,
the DCT with the written approval of the IJCT may determine;
(b) the residual value received from the lessee for asset leased by a Financial Institution.

12. Fees for technical services [Section 2(31)]: “fees for technical services” means any
consideration for the rendering of any managerial, technical or consultancy service but does not
consideration for any construction, assembly, and mining or like which would be salaries.

13. Income [Section 2(34)]: “income” includes-

(a) any income, profit or gains from whatever source derived, under any head specified in
sec-20
(b) any loss of such income, profit or gain;
(c) any profits or gain from Mutual insurance;
(d) any sum deemed to be income in Bangladesh

14. Income Year [Section 2(35)]: “income year”, in respect of any separate source of income,
means
(a) the financial year immediately preceding the assessment year
(b) the accounts of an assessee have been made twelve month ending;
(c) business or profession newly set up beginning date of the setting up-
(i) ending with the said financial year;
(ii) accounts ending on the date;
(e) period as may be determined by the board.

15. Market value [Section 2(40)]: ‘market value”, in respect of agricultural produce, means-
(a) where such product is sold ordinarily or after process, the value calculated according to the
average price;
(b) where such produce is not ordinarily sold in the market in its raw state, the aggregate of-
(i) the expenses of cultivation;
(ii) the tax and rent paid for the land
(iii) such rate of profit on sales as fixed by DCT;

16. Non-resident [Section 2(42)]: “non-resident” means a person who is not a resident.
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 Definition Page 3 of 4

17. Perquisite [Section 2(45)]: “perquisite” means- [mj-10]

(i) any payment made to an employee in cash or in any other form excluding
# basic salary
# festival bonus
# incentive bonus not exceeding 10% of disclosed profit of relevant income year,
# arrear salary
# advance salary
# leave encashment or leave fare assistance and
# overtime and
(ii) any benefit whether convertible into money or not provided to an employee other than
# contribution RPF
# approved pension fund
# approved gratuity fund and
# superannuation fund.

18. Person [Section 2(46)]: “person” includes

- an individual,
- a firm,
- an association of person,
- Hindu undivided family,
- a local authority,
- a company and
- every other artificial juridical person

19. Principle officer [Section 2(48)]: “principle officer” used with reference to a local authority, a
company, any other public body or any association of persons, includes- [Kn-nd-10]
(a) managing director, manager, secretary ,treasurer, agent or accountant of the authority, company,
body or association; and;
(b) any person of management of local authority, company, body or association, can be treated as
principle officer by the DCT.

20. Profession [Section 2(49)]: “profession” includes a vocation.

21. Profit in lieu of salary [Section 2(50)]: “profit in lieu of salary” includes- [Kn-nd-10]
(a) the amount of compensation received by an assessee due to any terms and conditions relating to
his employment; and;
(b) any payment from a provident or other fund and interest for which assessee does not contribute;

22. Recognised provident fund [Section 2(52)]: “recognised provident fund” means a provident
fund which has been, and continues to be, recognised by the Commissioner in accordance with the
provisions of Part B of the First Schedule.

23. Resident [Section 2(55)]: “resident” in respect of any income year, means-
(a) an individual who has been in Bangladesh-
(i) for a period of, or for periods amounting in all to, one hundred and eighty-two days
or more in that year; or
(ii) for a period of, or for periods amounting in all to ninety days or more in that year
having previously been in Bangladesh for a period of, or for periods amounting in all
to three hundreds and sixty-five days or more during four years preceding that year.
(b) a Hindu un-divided family, firm or other association of persons, the control and managed
wholly or partly in Bangladesh in that year: and
(c) a Bangladeshi company or any other company the control and managed wholly or partly in
Bangladesh in that year.
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 Definition Page 4 of 4

24. Royalty [Section 2(56)]: “royalty” means consideration excluding “Capital gain” for-
(a) transfer of all or any rights, including the granting of a licence in respect of a patent,
invention, model, design, secret process or formula, or trade mark or similar property;
(b) the impairment of any information concerning the working;
(c) the use of any patent, invention, model, design, secret process or formula, or trade mark or
similar property;
(d) impairment of any information concerning technical, industrial, commercial, or scientific
knowledge, experience or skill;
(e) the transfer of all or any rights, including granting of a licence, in respect of any copyright,
literary, artistic or scientific work, including film or video tapes for television or radio
broadcasting, but not for sale, distribution or exhibition;
(f) the rendering of any service in relation to above activities;
25. Rules [Section 2(57)]: “rules” means rules made under this Ordinance.
26. Salary [Section 2(58)]: “salary” includes-
(a) any wages;
(b) any annuity, pension or gratuity;
(c) any fees, commission, allowances, perquisites or profits in lieu of or in addition to salary or
wages;
(d) any advance of salary;
(e) any leave encashment.

27. Shareholder [Section 2(60)]: “shareholders” includes a preference shareholder.

28. Speculation-business [Section 2(61)]: “speculation business” means business in which a

contract for purchase or sale of any commodity, periodically or ultimately settled not actually deliver
or transfer, but does not include business in which-
(a) any raw material for future safety;
(b) any stock or share by dealer or investor for future safety- a contract;
(c) a contract by a member of forward market or stock exchange by jobbing or arbitrage;

29. Tax [Section 2(62)]: “tax” means the income tax payable under this ordinance and includes-
-any additional tax; [Kn-nd-10]
-excess profit tax;
-penalty;
-interest;
-fee or
-other charges

30. Transfer [Section 2(66)]: “transfer” in relation to capital asset, includes the sales, exchange or
relinquishment of the asset or the extinguishing any right therein, but excluding-
(a) any transfer of capital asset under a gift, bequest, will or an irrevocable trust;
(b) any distribution of the capital assets of company to its share holders on its liquidation; and
(c) any distribution of capital assets on the dissolution of a firm or other association of persons
or on the partition of Hindu undivided family;

31. Year [Section 2(69)]: “year” means a financial year. [Kn-nd-10]

Md. Sayduzzaman Tuhin, S.F.Ahmed & Co. Mob:-01552-639307/01740-599898, E-mail:tuhinsf@yahoo.com