The Finance Act, 1981

An Act to authorise payment and appropriation of certain sums from and out of the Consolidated Fund for the services of the financial year ending on the thirtieth day of June, 1982. WHEREAS it is expedient to authorise payment and appropriation of certain sums from and out of the Consolidated Fund for the services of the financial year ending on the thirtieth day of the June, 1982; It is hereby enacted as follows:-

Section 1. Short title and commencement

(1) This Act may be called the Finance Act, 1981.

(2) Subject to the Provisional Collection of Taxes Act, 1931 (XVI of 1931), and the declaration made thereunder, this Act shall, except as otherwise provided, come into force on the first day of July, 1981.

Section 2. Amendments of Act VII of 1870

In the Court Fees Act, 1870 (VII of 1870), for Schedule I and Schedule II thereto the Schedules set out in the First Schedule to this Act shall be substituted.

Section 3. Amendment of Act II of 1899

In the Stamp Act, 1899 (II of 1899), in Schedule I, in entry 54, against item (b) in the first column, in the second column, for the words “Twenty-five Taka” the words “Seventy-five Taka” shall be substituted.

Section 4. Amendment of Act XI of 1922

The following amendments shall be made in the Income-tax Act, 1922 (XI of 1922), namely:-

(1) in section 4, in sub-section (3),-

“(xvi) any interest, not exceeding Taka three thousand, received by an assessee, being an individual, from a scheduled bank, a co-operative bank or a co-operative society on any deposit;”; and

(2) in section 7, in sub-section (1), in the third proviso, for the words “three thousand and six hundred Taka”, “one thousand and eight hundred taka” and “one thousand and five hundred Taka” the words “four thousand and two hundred Taka”, “two thousand and four hundred Taka” and “one thousand and eight hundred Taka” shall, respectively, be substituted;

(3) in section 9, in sub-section (1), in clauses (i) and (ii), for the word “one-sixth” the word “one-fifth” shall be substituted;

(4) in section 9A, sub-section (6) shall be omitted;

(5) in section 10, in sub-section (4),-

“(g) any allowance in respect of so much of the expenses incurred by an assessee on account of entertainment or services rendered as are not supported by excise stamp or seal in cases of sales and services liable to excise duty.”;

(6) in section 14A,-

“(ii) except in the case of a company or other body corporate under the control of Government or of a corporation the administration and management of which is subject to instruction, direction or control of Government, a subscribed and paid-up capital of not less than Taka one lakh;”;

“(2BB) The provisions of sub-sections (2A) and (2B) shall also apply to an industrial undertaking consisting of an expansion of an existing industrial undertaking if such expansion constitutes-

but nothing contained in this sub-section shall apply to an industrial undertaking which is formed by the splitting up or the reconstruction or reconstitution of any business already in existence or by the transfer to a new business of any machinery or plant used in a business which was being carried on in taxable territories.”;

(7) in section 15,-

“(3A) The aggregate sum of exemption under sub-section (3), other than the sums exempted under the first proviso to sub-section (1) of section 7, sub-section (1) of section 58F and sub-section (1) of this section, shall be calculated subject to the following limits:-

(8) in section 15AA,-

(9) section 15B shall be omitted;

(10) in section 16, in sub-section (1), in clause (b), for the word “super tax” the word “income-tax” shall be substituted and shall be deemed to have been so substituted on and from the first day of July, 1980;

(11) in section, 17, in sub-section (5), in clause (b), in sub-clause (ii), in paragraph (1), in the first column for the words “before five-years” the words “within five years” shall be substituted and shall be deemed to have been so substituted on and from the first day of July, 1980;

(12) in section 18, in sub-section (3BB), after the words “on account of” occurring for the first time, the words and comma “indenting commission”, shall be inserted;

(13) in section 18A,-

(1) in sub-section (1), for the words “twenty thousand taka” the words “twenty-five thousand Taka” shall be substituted; and

(2) in sub-section (3), for the words “Twenty thousand taka” the words “twenty-five thousand Taka” shall be substituted;

(14) in section 22,-

in sub-section (1), in the second proviso, for the words “Taka twenty thousand” the words “Taka twenty-five thousand” shall be substituted;

(15) in section 23, in sub-section (3A),-

(16) in section 24, in sub-section (3), for the full-stop at the end a colon shall be substituted and thereafter the following new proviso shall be added, namely:-

“Provided that for the purposes of this section, the Deputy Commissioner of Taxes shall, in computing any loss, deduct any amount received in cash as subsidy from the Government.”;

(17) in section 28, in sub-section (1A),-

(1) after the word and figure “section 34”, the following words, brackets and letter shall be inserted, namely:-

“or (c) understated the value of any immovable property in connection with sale or transfer with a view to evading tax”;

(2) for the word, brackets and letter “clause (b)” the words, brackets and letters “clause (b) and (c)” shall be substituted;

(3) for the words “either case” the words “any case” shall be substituted;

(18) in section 34, in sub-section (2), in the proviso, in clause (iv),-

(1) in sub-clause (a), the word “and” occurring at the end, shall be omitted;

(2) for sub-clause (b) the following shall be substituted and shall be deemed to have been so substituted on and from the 1st day of July, 1980, namely:-

“(b) in the case of any such order made on or after the 1st day of July, 1976, and before the 1st day of July, 1978, within the thirtieth day of June, 1982; and

(19) in section 46, in sub-section (5A), after the fifth paragraph, the following new paragraph shall be added, namely:-

“If the person to whom a notice under this sub-section is sent fails to make payment in compliance therewith to the Deputy Commissioner of Taxes, he shall be deemed to be an assessee in default for the amount specified in the notice and further proceedings may be taken against him for the recovery of the amount as if it were an arrear of tax due from him in the manner provided in sub-sections (1), (2) and (3) and sections 46A, 46B, 46C and 46D.”.

Section 5. Amendments of Act I of 1944

The following amendments shall be made in the Excises and Salt Act, 1944 (I of 1944), namely:-

(1) in section 2, in clause (m), for sub-clauses (ii) and (iii) the following shall be substituted, namely:-

“(ii) in relation to salt, includes collection, removal, preparation, steeping, evaporation, boiling, or any one or more of these processes, the separation or purification of salt obtained in the manufacture of saltpetre, the separation of salt from earth or other substance so as to produce elementary salt and the excavation or removal of natural saline deposits or efflorescence;

and the word “manufacturer” shall be construed accordingly and shall include not only a person who employs hired labour in the production or manufacture of excisable goods, but also any person who engages in their production or manufacture on his own account if those goods are intended for sale and, in respect of gold and silver and products thereof, steel furniture, fittings and fixtures, footwear, all sorts and wooden furniture, all sorts, also any person dealing in such excisable goods who, whether or not he carries out any process of manufacture himself or through his employees or relatives, gets either directly or indirectly, any process of manufacture carried out on his behalf by any person who is not in his employ and any person so dealing in such goods in any capacity whatever shall be deemed to have manufactured such goods for all purposes of this Act.”

(2) after section 3A, the following new section 3AA shall be inserted, namely:-

“3AA. Additional duty of excise.- The Government may, by notification in the official Gazette, levy and collect, by way of penalty an additional duty of excise on any excisable goods and services, in addition to the duty leviable under sections 3 and 3A in cases when such duty is not paid in time, not exceeding the amount of duty remaining so unpaid, subject to such conditions, limitations and restrictions as it may deem fit to impose.”; and

(3) for the First Schedule the Schedule set out in the Second Schedule to this Act shall be substituted.

Section 6. Amendments of Act X of 1950

The following amendments shall be made in the Estate Duty Act, 1950 (X of 1950), namely:-

(1) in section 25A,-

“(11) Unit Certificates issued by the Investment Corporation of Bangladesh up to the value of Taka two lakh if held continuously for a period of three years by the deceased person.”; and

(2) for the Schedule the following shall be substituted, namely:-

| “THE SCHEDULE | | --- | | | | (See section 4) | | | | Rates of Estate Duty | | |

| | 1. | Where the principal value of the estate does not exceed Taka twenty lakh. | 5 per cent. | | | --- | --- | --- | --- | --- | | | 2. | Where the principal value of the estate exceeds Taka twenty lakh but does not exceed Taka thirty lakh. | Taka 1,00,000 plus 10 per cent of the amount exceeding Taka twenty lakh. | | | 3. | Where the principal value of the estate exceeds Taka thitry lakh but does not exceed Taka forty lakh. | Taka 2,00,000 plus 15 per cent of the amount exceeding Taka thirty lakh. | | | | 4. | Where the principal value of the estate exceeds Taka forty lakh but does not exceed Taka fifty lakh. | Taka 3,50,000 plus 20 per cent of the amount exceeding Taka forty lakh. | | |

| 5. | Where the principal value of the estate exceeds Taka fifty lakh. | Taka 5,50,000 plus 25 per cent of the amount exceeding Taka fifty lakh.”. | | --- | --- | --- |

Section 7. Amendments of Act III of 1951

The following amendments shall be made in the Sales Tax Act, 1951 (III of 1951), namely:-

(1) in section 2, in clause (11), the words “a person engaged in the business of purchasing and selling articles made wholly or partly of gold or silver” shall be omitted;

(2) in section 3,-

“(a) such goods or class of goods as the Board may, by notification in the official Gazette, specify in this behalf which are manufactured or produced in taxable territories, payable by the manufacturer or producer;”;

“(2) The tax shall be-

(3) in section 12, the words, brackets and letters “and clause (aa)” shall be omitted; and

(4) the Schedule shall be omitted.

Section 8. Amendment of Act XI of 1957

The following amendments shall be made in the Urban Immovable Property Tax Act, 1957 (E.P. Act XI of 1957),

(1) for section 8 the following shall be substituted, namely:-

“8. Penalty for default in payment of tax- If any person, on being served with a notice of demand for the payment of the Urban Immovable Property Tax in the manner provided in section 7, wilfully fails to pay, within the period mentioned in the notice, the tax due, such tax and a sum, by way of penalty, not exceeding the tax remaining unpaid shall be recoverable from the assessee as a public demand.”.

(2) for the Schedule the following shall be substituted, namely:-

| “THE SCHEDULE | | --- | | | | (See section 3 ) | | | | Rates of Tax | | |

| 1. | In all cases of holdings with annual value not exceeding Taka six thousand. | Nil. | | --- | --- | --- | | 2. | In other cases- | |

| | (a) not being self-occupied holdings. | 4% of the annual value. | | --- | --- | --- | | | (b) self-occupied holdings. | 2% of the annual value. | | | | | | Provided that in case the holding (not being a self-occupied holding) remains vacant for at least sixty days, the assessee shall be entitled to a remission to the extent of three-fourths of the amount due on account of such period.”. | | |

Section 9. Amendments of Act XIV of 1963

The following amendments shall be made in the Gift Tax Act, 1963 (XIV of 1963), namely:-

(1) in section 5, in sub-section (1),-(a) in clause (ix), for the colon a semi-colon shall be substituted and thereafter the following new clause shall be added, namely:-

“(x) to his real sons, daughters, father and mother, subject to a maximum of Taka three lakh in value in the aggregate in one or more pervious years:”; and

“Provided further that the value of gifts exempted under clause (x) together with the value of gifts, if any, exempted under clause (v), shall in no case exceed Taka three lakh;”; and

(2) for the Schedule the following shall be substituted, namely:-

| THE SCHEDULE (Vide section 3) | | --- | --- | | | | | | Rate of tax | | | |

| 1. | On the first Taka two lakh of the value of all taxable gifts. | 5 per cent. | | --- | --- | --- | | 2. | On the next Taka three lakh of the value of all taxable gifts. | 7 ½ per cent. | | 3. | On the next Taka five lakh of the value of all taxable gifts. | 10 per cent. | | 4. | On the next Taka ten lakh of the value of all taxable gifts. | 12 ½ per cent. | | 5. | On the next Taka fifteen lakh of the value of all taxable gifts. | 15 per cent. | | 6. | On the balance | 20 per cent.;.” |

Section 10. Amendments of Act XV of 1963

The following amendments shall be made in the Wealth-Tax Act, 1963 (XV of 1963), namely:-

(1) in section 5, in sub-section (1), for clause (xii) the following shall be substituted, namely:-

“(xii) agricultural land, subject to a maximum of Taka one lakh in value;

(xiii) a house owned and occupied by an assessee for the purpose of his own residence, subject to the following limits, namely:-

(2) for the Schedule the following shall be substituted, namely:-

| “THE SCHEDULE | | --- | | | | (See section 3 ) | | | | Rates of Gift Tax | | Rate. |

| 1. | On the first Taka ten lakh of net wealth .. .. | Nil. | | --- | --- | --- | | 2. | On the next Taka ten lakh of net wealth .. | ½ % | | 3. | On the next Taka fifteen lakh of net wealth .. | 1% | | 4. | On the next Taka fifteen lakh of net wealth .. | 1 ½ % | | 5. | On the balance of net wealth .. .. | 2%: | | | | | | Provided that where for any year wealth tax is payable along with income-tax by an assessee whose taxable income exceeds Taka 1,50,000 and the aggregate of income-tax and wealth-tax exceeds 60 per cent of the total income, the amount of wealth-tax payable shall be reduced by the amount by which the said aggregate exceeds 60 per cent of the total income.”. | | |

Section 11. Amendment of Act IV of 1969

In the Customs Act, 1969 (IV of 1969), in the First Schedule, against Tariff Heading 85.04 in column (1), in column (3), for the figure “125%” occurring twice the figure “150%” shall be substituted in both the places.

Section 12. Amendment of Act XXIII of 1980

In the Finance Act, 1980 (XXIII of 1980), in section 12, in sub-section (1), for the words “Bangladeshi nationals” the words “all Bangladeshi nationals and Bangladeshis having permanent residence or owning properties or business in Bangladesh or enjoying other facilities not available to foreign nationals” shall be substituted.

Section 13. Flat rates of customs-duty on accompanied goods of a passenger

Notwithstanding anything contained in the Customs Act, 1969 (IV of 1969), a passenger arriving at Bangladesh from a foreign country shall be allowed to import any goods as accompanied baggage under rule 5 of the Passengers (Non-tourists) Baggage (Import) Rules, 1981, the value of which as defined in section 25 of the aforesaid Act does not exceed the amount specified in the aforesaid Rules on payment of sales tax at the effective rate and customs-duty at the rates of 250% ad valorem no textile goods, spirituous beverages, perfumery, cosmetics and toilet preparations and 150% ad valorem on other goods, provided that the import of such goods in not prohibited or restricted under any law for the time being in force.

Section 14. Development surcharge

[Development surcharge.- Omitted by section 6 of the অর্থ আইন, ১৯৯১ (১৯৯১ সনের ২১ নং আইন). ]

Section 15. Income-tax

(1) Subject to the provisions of sub-sections (2), (3), (4) and (5), in making any assessment for the year beginning on the first day of July, 1981, income-tax shall be charged at the rates as specified in the Third Schedule.

(2) In making any assessment for the year beginning on the first day of July, 1981,-

(3) In making any assessment for the year beginning on the first day of July, 1981, where the assessee is a co-operative society, the tax shall be payable at the rate specified in paragraph A, or clause (c) of sub-paragraph (i) of paragraph B, of the Third Schedule, whichever treatment is more beneficial to the assessee:

Provided that in calculating for the purposes of this sub-section, the amount of income-tax at the rates specified in paragraph A of the Third Schedule, no deduction in respect of any allowance or sums referred to in the proviso to the said paragraph shall be made.

(4) (a) In making any assessment for the year beginning on the first day of July, 1981, where the total income of an assessee other than a company not registered in Bangladesh, includes any profits and gains derived from the export of goods out of Bangladesh, income-tax payable by him in respect of such profits and gains shall, subject to the provisions of clauses (b) and (c), be reduced by an amount computed in the manner specified hereunder:-

| | | | | --- | --- | --- | | | | Amount | | (i) | Where the goods exported abroad had not been manufactured by the assessee who exported them: | 30 per cent of the income-tax attributable to export sales. | | (a) | and where the export sales during the relevant year exceed the export sales of the preceding year: | plus an additional 1 per cent for every increase of 10 per cent in export sales over those of the preceding year, subject to an overall maximum of 40 per cent. | | (b) | and where the export sales during the relevant year do not exceed the export sales of preceding year: | minus 1 per cent for every decrease of 10 per cent in export sales from those of the preceding year, subject to an overall minimum of 20 per cent. | | (ii) | where the goods exported had been manufactured by the assessee who had exported them: | |

| | (a) where the export sales do not exceed 10 per cent of the total sales: | Nil. | | --- | --- | --- | | | (b) where the export sales exceed 10 per cent but do not exceed 20 per cent of the total sales: | 30 per cent of the income-tax attributable to export sales. |

| | (c) where the export sales exceed 20 per cent but do not exceed 30 per cent of the total sales: | 40 per cent of the income-tax attributable to export sales. | | --- | --- | --- | | | (d) where the export sales exceed 30 per cent of the total sales: | 50 per cent of the income-tax attributable to export sales. |

| (b) Nothing contained in clause (a) shall apply in respect of the following goods or class of goods, namely:- | | | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | | | | | | | | | | | | | | | | (i) tea; | | | | | | | | | | | | | | | | | | | | | | | | | | | | (ii) raw jute; | | | | | | | | | | | | | | | | | | | | | | | | | | | | (iii) jute manufacture; | | | | | | | | | | | | | | | | | | | | | | | | | | | | (iv) raw hides and skin and wet-blue leather; (v) such other goods as may be notified by the National Board of Revenue form time to time. (c) The National Board of Revenue may make rules providing for the computation of profits and the tax attributable to export sales and for such other matters as may be necessary to give effect to the provisions of this sub-section. (5) In cases to which section 17 of the Income-tax Act, 1922 (XI of 1922), applies the tax chargeable shall be determined as provided in that section but with reference to the rates imposed by sub-section (1), and in accordance, where applicable, with the provisions of sub-section (2). (6) For the purpose of making deduction of tax under section 18 of the Income-tax Act, 1922 (XI of 1922), the rates specified in the Third Schedule shall apply as respects the year beginning on the first day of July, 1981, and ending on the thirtieth day of June, 1982. (7) For the purposes of this section and of the rates of tax imposed thereby, the expression “total income” means total income as determined for the purposes of income-tax in accordance with the provisions of the Income-tax Act, 1922 (XI of 1922). | (iv) raw hides and skin and wet-blue leather; | | (v) such other goods as may be notified by the National Board of Revenue form time to time. | | (c) The National Board of Revenue may make rules providing for the computation of profits and the tax attributable to export sales and for such other matters as may be necessary to give effect to the provisions of this sub-section. | | (5) In cases to which section 17 of the Income-tax Act, 1922 (XI of 1922), applies the tax chargeable shall be determined as provided in that section but with reference to the rates imposed by sub-section (1), and in accordance, where applicable, with the provisions of sub-section (2). | | (6) For the purpose of making deduction of tax under section 18 of the Income-tax Act, 1922 (XI of 1922), the rates specified in the Third Schedule shall apply as respects the year beginning on the first day of July, 1981, and ending on the thirtieth day of June, 1982. | | (7) For the purposes of this section and of the rates of tax imposed thereby, the expression “total income” means total income as determined for the purposes of income-tax in accordance with the provisions of the Income-tax Act, 1922 (XI of 1922). | | | (iv) raw hides and skin and wet-blue leather; | | | | | | | | | | | | | | | | | | | | | | | | | | | | (v) such other goods as may be notified by the National Board of Revenue form time to time. | | | | | | | | | | | | | | | | | | | | | | | | | | | | (c) The National Board of Revenue may make rules providing for the computation of profits and the tax attributable to export sales and for such other matters as may be necessary to give effect to the provisions of this sub-section. | | | | | | | | | | | | | | | | | | | | | | | | | | | | (5) In cases to which section 17 of the Income-tax Act, 1922 (XI of 1922), applies the tax chargeable shall be determined as provided in that section but with reference to the rates imposed by sub-section (1), and in accordance, where applicable, with the provisions of sub-section (2). | | | | | | | | | | | | | | | | | | | | | | | | | | | | (6) For the purpose of making deduction of tax under section 18 of the Income-tax Act, 1922 (XI of 1922), the rates specified in the Third Schedule shall apply as respects the year beginning on the first day of July, 1981, and ending on the thirtieth day of June, 1982. | | | | | | | | | | | | | | | | | | | | | | | | | | | | (7) For the purposes of this section and of the rates of tax imposed thereby, the expression “total income” means total income as determined for the purposes of income-tax in accordance with the provisions of the Income-tax Act, 1922 (XI of 1922). | | | | | | | | | | | | | | | | | | | | | | | | | | |