deemed income

8/2/2019 Deemed Income

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DEEMED INCOME- SECTION 19

Total 28 subsections related to 4 heads of income:

1. Income from House Property 1 sub-section: (22) 3. Income from Business of Profession 7 sub-sections: (6), (14) (16), (18), (20) & (23)

2. Agricultural Income 2 sub-sections: (17) & (19) 4. Income from other Sources 18 sub-sections: (1)(5), (7)(13), (21), (21A), (21B), (24), (26), (27)

Section Items of deemed

income

Grounds of considering as deemed income Year during which

added to total

income

Head of income

under which

added

Extent of the

deemed income to

be added with

total income

19(1) Unexplained cash

credit in the books

of accounts

Offering no explanation about the nature and source of the

credited amount, or the explanation offered is not

satisfactory in the opinion of the Deputy Commissioner of

Taxes (DCT).

Same income year

for which the cash

credit is done in the

books of accounts.

Income from

other sources

Entire amount

19(2) Unrecorded

investment oracquisition of

bullion, jewellery

or other valuable

articles

Amount expended in the investment or acquisition of the

valuable articles exceeds the amount recorded in this behalfin the books of accounts and no explanation is offered about

the excess amount or the explanation offered is not

satisfactory in DCTs opinion

Same income year

for which the booksof accounts are

maintained

-do- Excess of the

amount expendedover the amount

recorded

19(3) Unexplained

expenditure

Offering no explanation about the nature and source of the

money for the expenditure, or the explanation offered is not

satisfactory in DCTs opinion.

Same income year

in which the

expenditure is

incurred

Income from

other sources

Entire amount of

expenditure

19(4) Unrecorded

investments

Investments are not recorded in the books of accounts, if

any, for any source of income and no explanations is offered

about the nature and source of fund for the investments, or

the explanation offered in not satisfactory in DCTs opinion.

Same financial year

immediately

preceding the

assessment year forwhich the

investments are

made

-do- The value of

investments

19(5) Unrecorded

ownership of

money, bullion,

jewellery or other

valuable articles

The assessee is found to be the owner of the money, bullion,

jewellery or other valuable articles which is not recorded in

the books of accounts, if any, maintained for any source of

income and he offers no explanation about the nature and

source of fund for acquiring the assets or the explanation

offered is not satisfactory in DCTs opinion.

Same financial year

immediately

preceding the

assessment year for

which the ownership

of the assets in

-do- The money or the

value of the

bullion, jewellery

or other valuable

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income


added to total

income

Head of income

under which

added

Extent of the

deemed income to

be added with

total income

found. articles.

19(6) Income derived

from discontinued

business or

profession

The business or profession has been or was discontinued at

any time before the commencement, or during the course of

any income year and any income from such business or

profession would have been chargeable to tax if it had been

received in the income year in which it accrued or arose.

Same income year

during which the

income is derived

Income from

business or

profession

Entire amount

19(7) Dividend declared

or distributed

Dividend has been declared or distributed by a company The income year in

which the dividend

is received

Income from

other sources

Entire amount

19(8) Difference

between the

underpaid

purchase price

and the fair

market value of

any assets (other

than stock-in-

trade or stocks &

shares)

The asset has been purchased from any company and the

DCT has reason to believe that the price paid is less than the

fair market value thereof

Year of purchase -do- Difference between

the price paid and

the fair market

value.

19(9) Salami or premia

receipts by virtue

of any lease

The salami or premia are received or receivable by virtue of

lease as a lump sum amount

Usually the income

year of receipt, but

at the option of the

assessee, the amount

may be allocated for

assessment purpose

proportionately to

the years covered by

the entire lease

period, but not

exceeding 5 years

-do- Entire amount in

the receiving

income year orproportional yearly

amount in other

case


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income


added to total

income

Head of income

under which

added

Extent of the

deemed income to

be added with

total income

19(10)

Goodwill money

or receipt as

compensation or

damages

The amount is received by way of goodwill money or receipt

in the nature of compensation or damages for cancellation or

termination of contracts or licenses by the Government or

any person.

Income year during

which the amount is

received

Income from

other sources

Entire amount

19(11) Benefit or

advantage for

cancellation of

indebtedness

The benefit or advantage, whether convertible into money or

not, is derived or account of cancellation of indebtedness

[not applicable for bank loan/interest waiver].

Income year during

which the benefit is

derived

Income from

other sources

Money of the

benefit or

advantage

19(12) Managing agency

commission

The managing agency commission including compensation

is received for termination of agencies or any modification

of the terms and conditions relating thereto.

Income year during

which the

commission isreceived

-do- Entire amount

19(13) Accidental

income

The income is received by way of winnings from lotteries,

crossword puzzles, card games and other games of any sort

or from gambling or betting in any form or of any nature

whatsoever.

Income year during

which the income is

received

-do- Entire amount

19(14) Income from

insurance

business carried

on by a mutual

insurance

association

Profits and gains are derived from insurance business carried

on by the mutual insurance association and computed

according to provisions of paragraph 8 of the fourth schedule

to the Income Tax ordinance(ITO)

Income year during

which the profits

and gains are

received

Income from

business or

profession

Entire amount to be

the income of the

mutual insurance

association

19(15) (a) Receipt backof loss, bad debt

or expenditure

(other than bank

interest)

Any amount of deduction was allowed in the part for anyloss, bad debt or expenditure and subsequently received back

in cash or in any other manner

Income year duringwhich the receipt is

happened

Income frombusiness or

profession

Amount of receipt

(aa) Bank interest

or share of profit

remaining unpaid

for 3 years

Interest payable to any commercial bank, or the Bangladesh

Shilpa Bank or the Bangladesh Shilpa Rin Sangstha, or share

of profit payable to a bank run or Islamic Principles, though

not paid actually, was allowed as deduction because of

Income year

immediately

following the expiry

of 3 years after the

-do- Amount repining

unpaid.

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income


added to total

income

Head of income

under which

added

Extent of the

deemed income to

be added with

total income

mercantile system of accounts, but unpaid within 2 years

after the expiry of the concerned year of deduction

concerned year of

deduction

(b)Benefit

received regarding

unpaid trading

liability

Benefit has been derived regarding any trading liability for

which deduction was allowed in the part and it has not been

already treated as income

Income year during

which the benefit is

derived

-do- The value of the

benefit

(c) Trading

liability or portion

thereof remaining

unpaid for 3 years

A deduction was allowed in the part for a trading liability,

but it has not been paid partly or fully within 3 years of the

expiration of the concerned year of deduction.

Income year

immediately


of those 3 years

Income from

business or

profession

Amount remaining

unpaid

19(16) Profit from sale of

business building,

machinery or

plant

The building, machinery or plant used for business or

profession is disposed of and the sale proceeds thereof

exceeds the written down value (WDV)

Income year during

which the asset is

disposed of

Income from

business or

profession

Excess of sale

proceeds over the

written down value

(up to the

difference between

original cost &

WDV)

19(17) Profit from sale ofagricultural

machinery or

plant.

The machinery or plant exclusively used for agriculturalpurpose is disposed of and the sale proceeds thereof exceeds

the WDV

-do- Agriculturalincome

-do-

19(18) Insurance, salvage

or compensation

moneys regarding

business building,

machinery or

The insurance, salvage or compensation moneys are received

in respect of building, machinery or plant used for business

or profession which is discarded, demolished or destroyed

and the amount of such money exceeds the WDV of the

asset

Income year during

which the money are

received

Income from

business or

profession

Excess of the

moneys over the

WDV (up to the

difference between


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income


added to total

income

Head of income

under which

added

Extent of the

deemed income to

be added with

total income

plant the original cost

and WDV less the

scrap value

19(19) Insurance salvage

or compensation

moneys regarding

agricultural

machinery or

plant

The insurance, salvage, or compensation moneys are

received regarding machinery or plant used exclusively for

agricultural purpose which is discarded, demolished or

destroyed and the amount of such moneys exceeds the WDV

of the asset

-do- Agricultural

income

-do-

19(20) Sale proceeds of

any asset

representing

capital

expenditure on

scientific research

related to business

The asset represents expenditure of a capital nature on

scientific research related to business [as per the meaning of

section 29(1) (xx)] and is sold

Income year during

which the asset is

disposed of

Income from

business or

profession

Sale proceeds [up

to the capital

expenditure on

scientific research

in Bangladesh

related to business

allowed as

deduction as per

section 29(1) (xx)

19(21) Loan from anyperson other than

a banking

company or a

financial

institution

remaining unpaid

for 3 years

Any sum or aggregate of sums exceeding Tk.1 lakh isclaimed or shown to have been received as loan from any

person, other than a banking company or a financial

institution, otherwise than by a crossed cheque drawn on a

bank, and the loan is not paid back in full within 3 years

from the end of the income year is which it is claimed or

shown to have been received.

Income yearimmediately


of 3 years after the

end of concerned

year of taking loan

Income fromother sources The sum or partthere of remaining

unpaid

19(21A) Loan or gift Where any sum is claimed to have been received by an The income year in Income from The loan or gift

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income


added to total

income

Head of income

under which

added

Extent of the

deemed income to

be added with

total income

received from

initial capital

shown by other

person in his

return under self-

assessment

scheme during the

period of

limitation

assessee as loan or gift during any income year from a

person who has transferred the sum within the period of

limitation stipulated in the rule made under the ITO, from

the initial capital of his business or profession shown in his

return filed under section 83A (i.e., under self-assessment

scheme) [Note: Sec. 83A omitted by FO 2008; thus ineffective

from AY 2008-09].

which the loan or

gift is received

other sources

19(21B) Initial capital

transferred within

the period of

restriction

(FA2011)

Applicable to any assessee having income from

business of profession Violation of the bar at section 82BB to transfer

partly or fully initial capital formed under

universal self assessment scheme within 5 years of

its formation.

The income year of

transfer

Income from

other sources

Amount transferred

19(22) Receipt from

tenant not

adjustable against

rent (Security

money)

An owner of a house property receives any amount from

tenant which is not adjustable against rent

The income year in

which the amount is

received, or at the

option of the

assessee, the amount

may be allocated for

assessment purpose

in equal proportionfor 5 income years

Income from

house property

Entire amount in

the receiving

income year or

proportional yearly

amount in other

case

19(23) Prescribed portion

of export value of

garments

exportable against

the export quota

transferred to

other person

An exporter of garments transfers to pay person, the export

quota or any part thereof allotted to him by the Government

Income year during

which the export

quota is transferred

Income from

business or

profession

Prescribed portion

of the export value

of the garments

exportable against

the transferred

quota (this is 3% of


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income


added to total

income

Head of income

under which

added

Extent of the

deemed income to

be added with

total income

export value u/r 30A)

19(24) Increase in paid-

up capital by

issuing shares

received by an

assessee being a

private limited

company or

public limited

company not

listed with a stockexchange

The amount is not received by crossed cheque or

bank transfer

This will be treated as the income of the company.

The income year of

equity receipt

Income from

other sources

Entire amount

19(26) Loan taken by a

company

otherwise than by

a crossed cheque

or bank transfer

(FA2011)

The loan is not received by crossed cheque or bank

transfer

This will be treated as the income of the borrowing

company.

The income year of

taking loan

Income from

other sources

Entire amount

19(27) Purchase or hire

of motor car

where the value

exceeds 10% of

the paid-up capital(FA2011)

Applicable for company only

If the company purchases directly or at hire

purchase system any car or jeep value of which

exceeds 10% of its paid up capital then 50% of the

amount that exceeds 10% of paid up capital

The income year of

purchase or hire

Income from

other sources

50% of the amount

that exceeds 10%

of paid up capital

Deemed income subsequently to be allowed as deductions on payment or refund:

i) Proviso to section 19(15) (c) :

Trading liability or portion thereof remaining unpaid for 3 years is deemed to be income with the expiry of these 3 years but if it is paid in a subsequent

year, the amount paid shall be deducted in computing income of the year of payment.

ii) Proviso to section 19(21):

Personal loan previously considered as deemed income for non-payment within 2 years from the end of the year of taking loan, if paid in a subsequent

income year, the amount paid is to be allowed as deduction in the year of payment.

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ii i) Proviso to section 19(22):

Unadjustable security money received by a house-owner from tenant if refunded partly or fully in a subsequent year, the amount refunded to be allowed as

deduction in the year of refund.

deemed income

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