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THE FINANCE ORDINANCE

Volume - 19 Act - XLV Year - 1976 Date - 28th June, 1976

An Ordinance to give effect to the financial proposals of the Government and to amend certain laws.

WHEREAS it is expedient to make provisions to give effect to the financial proposals of the Government and to amend certain laws for the purposes hereinafter appearing; NOW, THEREFORE, in pursuance of the Proclamations of the 20th August, 1975, and the 8th November, 1975, and in exercise of all powers enabling him in that behalf, the President is pleased to make and promulgate the following Ordinance:-

1. Short title and commencement

1. (1) This Ordinance may be called the Finance Ordinance, 1976. (2) Except as otherwise provided in this Ordinance, this section and sub-clause (c) of clause (15) of section 2 and sections 3 and 4 shall come into force at once, and other sections shall come into force on the first day of July, 1976.

2. Amendments of Act XI of 1922

2. The following amendments shall be made in the Income-tax Act, 1922 (XI of 1922), namely:- (1) in section 2, in clause (6C), after the word and figure “section 12”, the commas and words “, any winning from lotteries, crossword puzzles, races including horse races, card games and other games of any sort or from gambling or betting of any form or nature whatsoever” shall be inserted; (2) in section 4, in sub-section (3),- (a) after clause (vi), the following new clause (via) shall be inserted, namely:- “(via) any receipts which are of casual and non-recurring nature, not being winning from lotteries, to the extent such receipts do not exceed Taka two thousand in the aggregate: Provided that this clause shall not apply to- (i) capital gains chargeable under the provisions of section 12B; or (ii) receipts arising from business or the exercise of a profession, vocation or occupation; or (iii) receipts by way of addition to the remuneration of an employee;”; (b) clause (viii) shall be omitted; (c) in clause (xii), in sub-clause (f), for the full-stop at the end a semicolon shall be substituted; (d) after sub-clause (f) amended as aforesaid, the following new sub-clause (g) shall be added, namely:- “(g) in respect of a building the erection of which is begun and completed at any time between the first day of July, 1975 and the thirtieth day of June, 1980 (both days inclusive) and which is intended to be, and is actually, used for residential purposes only, for a period of five years from the date of such completion, subject to the following conditions, namely:- (i) the plinth area of the building is not more than two thousand square feet; and (ii) the cost of construction is not more than Taka two lakhs exclusive of the cost of land and registration charges. The exemption under this clause shall also apply in the case of housing companies, societies and estates where the construction comprises bungalows, flats, apartments or units (hereinafter referred to as units) each containing plinth area of not more than two thousand square feet and the cost of construction of each unit being not more than Taka two lakhs, exclusive of the cost of land and registration charges, provided the construction comprises not less than twenty-five units.”; and (e) in clause (xiiib), the words “over sixty years of age” shall be omitted; (3) in section 5,- (a) for sub-section (2) the following shall be substituted, namely:- “(2) The National Board of Revenue may appoint as many Commissioners of Taxes as it may deem fit and a Commissioner of Taxes so appointed shall perform such functions of a Commissioner of Taxes under this Act as the National Board of Revenue may assign to him and such functions may be assigned to the exclusion of, or concurrently with, any other Commissioners of Taxes with reference to any area, or any person or classes of persons, or any income or classes of incomes, or any case or classes of cases.”; and (b) for sub-section (3) the following shall be substituted and shall be deemed to have been so substituted on the first day of July, 1975, namely:- “(3) The National Board of Revenue may appoint as many Appellate or Inspecting Joint Commissioners of Taxes, Special Officers, Deputy Commissioners of Taxes, Assistant Commissioners of Taxes and Tax Recovery Officers as it thinks fit.”; (4) in section 6, after clause (iii), the following new clause (iiia) shall be inserted, namely:- “(iiia) Agricultural income.”; (5) in section 7, in sub-section (1), in the fourth proviso, for the words “one thousand and two hundred” the words “two thousand and four hundred”, for the words “six hundred” the words “one thousand and two hundred” and for the words “three hundred and sixty” the words “nine hundred” shall be substituted; (6) after section 9, the following new section 9A shall be inserted, namely:- “9A. Agricultural income.- (1) Subject to the provisions of this Act, the tax shall be payable by an assessee under the head ‘Agricultural income' in respect of all rent and revenue, including any local cess or rates, derived from land and also in respect of any agricultural income derived from such land. (2) Subject to the provisions of this Act, such agricultural income shall be computed after making the following allowances, namely:- (i) any land revenue, rent or tax paid in respect of the land used for agricultural purposes the income of which is subject to tax under this section; (ii) any local rate or cess paid in respect of such land: Provided that nothing in clauses (i) and (ii) shall be deemed to authorise the allowance of any sum paid on account of tax, rate or cess levied on the income arising or accruing or deemed to arise or accrue from agricultural operations or assessed at a proportion of or otherwise on the basis of such income; (iii) any sum paid in respect of the cost of collection of rent or revenue including the cost of maintenance of any katchari or other capital assets and any expense of litigation, not in excess of fifteen per cent of the total amount of rent or revenue excluding cess and selami, if any, which accrued to the assessee in the previous year in respect of the land from which such rent or revenue is derived; (iv) when rent derived from such land is rent in kind the cost incurred by the assessee- (a) in performing any process contemplated in item (ii) of sub-clause (b) of clause (1) of section 2 for rendering the produce which comprises such rent in kind fit to be taken to market; (b) in transporting such produce to market; (c) in maintaining in good repair any agricultural implements or machinery and in providing for the upkeep of cattle for the purpose of such process or transport; (v) where the land is subject to a mortgage or other capital charge, the amount of any interest paid by the assessee in the previous year in respect of such mortgage or charge; and where such land has been acquired, re-claimed or improved by the use of borrowed capital, the amount of any interest paid by him in the previous year in respect of such capital: Provided that no allowance shall be made under this clause in any case for any interest chargeable under this Act which is payable without taxable territories except interest on which tax has been paid or from which tax has been deducted under section 18 or in respect of which there is an agent in taxable territories who may be assessed under section 43 or, in the case of a firm, for any interest paid to a partner of the firm; (vi) any sum paid in respect of the maintenance of any irrigation or protective work or other capital assets. Explanation. For the purpose of this clause, ‘maintenance' includes current repairs and, in the case of protective dykes and embankments, all such work as may be necessary from year to year for repairing any damage or destruction caused by flood, or other natural causes; (vii) depreciation at the prescribed rate in respect of any irrigation or protective work or other capital asset, constructed or acquired for the benefit of the land from which such agricultural income is derived or for the purpose of deriving such agricultural income from such land, provided the required particulars have been duly furnished by the assessee; (viii) any sum paid as premium in order to effect any insurance against loss of, or damage to, such land or any crops to be raised or cattle to be reared thereon; (ix) any expenditure incurred in cultivating such land or raising livestock thereon; (x) any expenditure incurred in performing any process contemplated in item (ii) of sub-clause (b) of clause (1) of section 2 for rendering the produce of such land fit to be taken to market; (xi) any expenditure incurred in transporting such produce or livestock to market; (xii) any expenditure incurred in maintaining agricultural implements and machinery in good repair and in providing for the upkeep of cattle for the purpose of such cultivation, process, or transport: Provided that where no books of account have been maintained in respect of agricultural income derived from land, the allowances admissible under clauses (ix), (x), (xi) and (xii) shall, instead of such expenditure, be a sum equal to sixty per cent of the market value of the produce raised from such land: Provided further that where the agricultural income is derived according to the local ‘barga' or ‘bhag' system, no allowances under clauses (ix), (x), (xi) and (xii) shall be admissible and in all such cases the cost of production shall be limited to the share of ‘bargadar' or ‘bhagchasi' according to the local ‘barga' or ‘bhag' system, as the case may be; (xiii) in respect of any machinery or plant used exclusively for agricultural purposes which has been sold, transferred by way of exchange, or is compulsorily acquired by a competent authority under any law for the time being in force or discarded or demolished or destroyed in the previous year, the amount by which written down value thereof exceeds the amount for which the machinery or plant is actually sold, transferred or compulsorily acquired, as the case may be, or its scrap value: Provided that such amount is actually written off in the books of the assessee: Provided further that where the amount for which such machinery or plant is sold, transferred or compulsorily acquired exceeds the written down value, so much of the excess as does not exceed the difference between the original cost and the written down value shall be deemed to be the income of the previous year in which the sale, transfer or compulsory acquisition, as the case may be, took place: Provided further that where any insurance, salvage or compensation moneys are received in respect of any such machinery or plant which has been discarded or demolished or destroyed and the amount of such moneys does not exceed the writ

3. Amendments of Act XXXII of 1934

3. The amendments set out in the First Schedule to this Ordinance shall be made in the Tariff Act, 1934 (XXXII of 1934).

4. Amendments of Act I of 1944

4. The following amendments shall be made in the Excises and Salt Act, 1944 (I of 1944), namely:— (1) in section 3-A, in sub-section (1),— (a) in clause (a),— (i) for the figure "40" the figure "100" shall be substituted; (ii) for the figure "10" occurring for the first time the figure "30" shall be substituted; and (iii) for the figure "10" occurring for the second and third times the figure "25" shall be substituted in both the places; and (b) in clause (b),— (i) for the figure "20" occurring for the first time the figure "50" shall be substituted; and (ii) for the figure "20" occurring for the second and third times the figure "35" shall be substituted in both the places; (2) the First Schedule shall be amended in the manner set out in the Second Schedule to this Ordinance.

5. Repeal

5. (1) The Agricultural Income-tax Act, 1944 (Ben. Act IV of 1944), hereinafter referred to as the said Act, is hereby repealed. (2) Without prejudice to the operation of the General Clauses Act, 1897 (X of 1897), any right, privilege, obligation or liability acquired, accrued or incurred under, or any penalty, forfeiture or punishment incurred in respect of any offence against, the said Act and any investigation or legal or other proceeding or remedy in respect of any such right, privilege or obligation, liability, penalty, forfeiture or punishment may be enforced, instituted, continued or prosecuted subject to the following modifications as if the said Act had not been repealed, namely:- (a) the powers and functions of the Director, Deputy Directors and Taxation Officers appointed under the said Act shall be exercised and performed by the Commissioners of Taxes, Joint Commissioners of Taxes and the Deputy Commissioners of Taxes, respectively, appointed under the Income-tax Act, 1922 (XI of 1922), as if the Commissioners of Taxes, Joint Commissioners of Taxes and Deputy Commissioners of Taxes were the Director, Deputy Directors and Taxation Officers, respectively, appointed under the said Act; (b) the functions of the Appellate Tribunal under the said Act shall be performed by the Appellate Tribunal appointed under the Income-tax Act, 1922 (XI of 1922), as if the Appellate Tribunal appointed under the Income-tax Act, 1922, were the Appellate Tribunal appointed under the said Act; (c) all appeals pending before the Appellate Tribunal appointed under the said Act shall be transferred to, and heard and disposed of by, the Appellate Tribunal appointed under the Income-tax Act, 1922 (XI of 1922), in accordance with the provisions of the said Act.

6. Repeal

6. The Transfer of Property Ordinance, 1947 (Ordinance IV of 1947), is hereby repealed.

7. Amendment of Act X of 1950

7. In the Estate Duty Act, 1950 (X of 1950), in section 25A,— (a) in clause (1), in the proviso, for the words "one lakh Taka" the words "two lakh Taka" shall be substituted; (b) in clause (3), the following new provisos shall be added, namely:- “Provided that where the principal value of such house exceeds three lakh Taka this clause shall not apply to so much of such value as exceeds that amount: Provided further that the aggregate of the principal value exempted under this clause together with such value exempted under clause (1) shall not exceed four lakh Taka;”.

8. Amendments of Act III of 1951

8. The following amendments shall be made in the Sales Tax Act, 1951 (III of 1951), namely:— (1) in section 27, in sub-section (3) the words, brackets and figure “sub-section (1) or" shall be omitted; (2) in section 27C, for the figures, commas, words and brackets "43, 49, 50, 51 and 52 of Sea Customs Act, 1878 (VIII of 1878)" the figures, commas, words and brackets "38, 39, 40 and 41of the Customs Act, 1969 (IV of 1969)" shall be substituted; (3) for section 31, the following shall be substituted, namely:— “31. When the ownership of the business of a manufacturer, producer or exporter is transferred any tax payable in respect of such business remaining unpaid at the time of the transfer shall be payable by the transferee as if he were the manufacturer, producer or exporter.”.

9. Amendment of Act XIV of 1963

9. In the Gift-tax Act, 1963 (XIV of 1963), in section 4, clause (a) shall be omitted.

10. Amendments of Act IV of 1969

10. The following amendments shall be made in the Customs Act, 1969 (IV of 1969), namely:— (1) in section 25, after sub-section (6), the following new sub-section shall be added, namely:— “(7) Notwithstanding anything contained in this section, the Government may, by notification in the official Gazette fix for the purpose of levying customs-duties, tariff values for any goods imported or exported as chargeable with customs-duty ad valorem.”; (2) in section 156, in sub-section (1) in the

11. Income-tax and Super-tax

11. (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, 1976,— (a) incomes-tax shall be charged at the rates specified in Part I of the Third Schedule, and (b) the rates of super-tax shall, for the purpose of section 55 of the Income-tax Act, 1922 (XI of 1922), be those specified in Part II of the Third Schedule. (2) In making any assessment for the year beginning on the first day of July, 1976,- (a) where the total income of an assessee, not being a company, includes any income chargeable under the head "salaries" or any income chargeable under the head "interest on securities'' the income-tax payable by the assessee on that part of his total income which consists of such inclusion shall be an amount bearing to the total amount of income-tax payable according to the rates applicable under the operation of the Finance Act, 1975 (III of 1975), on his total income the same proportion as the amount of such inclusion bears to his total income; and (b) where the total income of a company includes any profits and gains from life insurance business, the super-tax payable by the company shall be reduced by an amount equal to 12.5 per cent of that part of its total income which consists of such inclusion. (3) In making any assessment for the year beginning on the first day of July, 1976, where the assessee is a co-operative society, the tax shall be payable at the rates specified in paragraph A of Part I, or paragraph B of Part I and paragraph A of Part II of the Third Schedule as if the assessee were a company to which the proviso to sub-paragraph (1) of paragraph A of the said Part II applied, 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 Part I of the Third Schedule, no deduction in respect of any allowance or sums referred to in clause (i) of 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, 1976, where the total income of an assessee, not being a company to which the proviso to sub-paragraph (1) of paragraph A of Part II of the Third Schedule does not apply, includes any profits and gains derived from the export of goods out of Bangladesh, income-tax and super-tax, if any, 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:-



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