29. Deductions from income from business or profession.-

29. Deductions from income from business or profession.-

(1) In computing the income under the head "Income from business or profession", the following allowances and deductions shall be allowed, namely:-

(i)   the amount of any rent paid for the premises in which the business or profession is carried on:

Provided that if a substantial part of the premises is used by the assessee as a dwelling-house, the amount shall be a proportionate part of the rent having regard to the proportionate annual value of the part so used;

(ii)  the amount paid for the repair of the hired premises in which the business or profession is carried on if the assessee has undertaken to bear the cost of such repair;

Provided that if a substantial part of the premises is used by the assessee as a dwelling-house, the amount shall be a proportionate part of the sum paid for such repair having regard to the proportionate annual value of the part so used;

(iii) the amount of any interest paid or any profit shared with a bank run on Islamic principles in respect of capital borrowed for the purposes of the business or profession;

Provided that if any part of such capital relates to replenishing the cash or to any other asset transferred to ¹[any other entity, when lending of money is not the business of transferor, the amount shall be proportionate part of the interest so paid or the profit so shared having regard to the proportion of such capital so used;

(iv) any sum paid or credited to any person maintaining a profit and loss sharing account or deposit with a bank run on Islamic principles by way of distribution of profits by the said bank in respect of the said account of deposit;

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¹ Subs.  for  "a  newly  set  up  industrial  undertaking  or  to  an  extension  of  an  existing  industrial undertaking whose income is exempted from payment of tax" by F.O. 2007

(v)  an amount not exceeding ¹[five percent] of the total income carried to any special reserve created by such financial institution and for such purposes as may be approved by the Government in this behalf, if the aggregate amount standing in such reserve does not exceed the paid up share capital of the institution;

(vi) the amount paid on account of current repairs to buildings, machinery, plant or furniture used for the purposes of the business or profession;                                                             

(vii) the whole or the proportionate part of the amount of any premium paid for insurance, against risk of damage, destruction or loss of buildings, machinery, plant or furniture, stocks or stores according as the whole or part thereof is used for the purposes of the business or profession;

(viii) in respect of depreciation of building, machinery, plant or furniture, being the property of the assessee ²[or bridge or road or fly over owned by a physical infrastructure undertaking] and used for the purposes of business or profession, the allowances as admissible under the Third Schedule;

³[(viiia) in respect of amortization of license fees as admissible under the Third Schedule;]

(ix) in the case of a ship, being a passenger vessel plying ordinarily on inland waters, or a fishing trawler, which is entitled to a special depreciation allowance under paragraph 8 of the Third Schedule, an investment allowance of an amount equivalent to twenty percent of the original cost to the assessee for the year in which the ship or the trawler is first put to use for public utility;

⁴[(x)] ) in the case of any machinery or plant (other than office appliances and road transport vehicles) which is entitled to accelerated depreciation under paragraph 7 of the Third sehedule,an investment allowance, for the year in which the undertaking starts commercial production, at the following rates,namely:-

(a)    if the undertaking is set up in areas specified in this behalf by   

       the Board,  -----   an amount equivalent to 25 percent of the actual cost to the assessee;

(b)   in other cases,  ---- an amount equivalent to 20 percent   of the actual cost to the assessee; ]

⁵[(xa)] where an assessee being a company registered under ⁶[the Companies Act, 1913 (VII of 1913) or কোম্পানী আইন, 1994 (1994 সনের 18 নং আইন)] invests any amount in the purchase of any new plant or machinery for installation in an industrial undertaking set up in Bangladesh and owned by it for the purpose of balancing, modernisation or replacement of the plant or machinery already installed therein, an investment invested allowance at the rate of twenty-five percent of the amount so invested;]

(xi) where any building , machinery  ⁶[plant or any other fixed asset not being importe software] which, after having been used by the assessee for the purpose of his business, has been discarded, demolished or destroyed in any income year or any such asset has been sold, transferred by way of exchange or compulsorily acquired by a legally competent authority or

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¹ Subs. for "ten percent" by F.O. 2007
² Ins. by F.A. 2010
³ Ins.by F.A. 2013
⁴ Omitted by F.A. 2005
⁵ Ins. by F.A. 1989 and subsequently Omitted by F.A. 2004

⁶ Subs. for "or plant" by F.A. 2015

exported outside Bangladesh in any income year, an obsolescence allowance to the extent and computed in the manner specified in paragraph 10 of the Third Schedule;

(xii) in the case of any animal which has been used by the assessee for the purpose of business or profession otherwise than as stock-in-trade, has died or become permanently useless for such purpose, an amount equivalent to the difference between the original cost of the animal to the assessee and the sum, if any, realised by sale or other disposition of the carcass, as the case may be, of the animal

(xiii) any sum paid on account of land development tax or rent, local rates or municipal taxes in respect of such premises or part thereof as is used by the assessee for the purpose of business or profession;

(xiv) any sum paid in the income year to an employee as bonus or commission for services rendered where such sum would not have been payable to him as profits or dividend if it had not been paid as bonus or commission and is reasonable with reference, except in the case of payment of festival bonus, to                

(a) the general practice in similar business or profession,

(b) the profits of the business or profession in that year, and

(c) the pay and other conditions of service of the employee:

 ¹[provided that no deduction on account of bonus other than festival bonus, to its employees shall be allowed to a banking company under this clause if such banking company is allowed deduction from its income under clause (xviiiaa)]  

(xv) the amount of any debt or part thereof which is established to have become irrecoverable and has actually been written off as such in the books of accounts of the assessee for the income year if the debt or part thereof has been taken into account in computing the income of the assessee of that income year or an earlier income year and, in the case of the business of banking or money-lending carried on by the assessee, represents money lent in the ordinary course of business;

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  ¹.Ins. by F.A. 1993 and subsequently Omitted by F.A. 2002   

(xvi) where any amount of debt or part thereof which has actually been written off as irrecoverable in the books of accounts of the assessee in any income year but has not been allowed on the ground that it has not then become irrecoverable, so much of such debt or part thereof as has been established to have become irrecoverable in any subsequent income year shall be allowed as a deduction in that income year;

(xvii) where any such debt or part thereof is written off as irrecoverable in the books of accounts of the assessee for an income year and the Deputy Commissioner of Taxes is satisfied that such debt or part thereof became irrecoverable in an earlier income year not falling beyond a period of four years immediately preceding the income year in which it was written off, the Deputy Commissioner of Taxes may, notwithstanding anything contained in this Ordinance, allow such debt or part thereof as a deduction for such earlier income year if the assessee accepts such finding of the Deputy Commissioner of Taxes and re-compute the total income of the assessee for such earlier income year and make the necessary amendment; and the provisions of section 173 shall, so far as may be, apply thereto the period of four years referred to in sub- section ¹[ the proviso of sub-section (1)] of that section being reckoned from the end of the year in which the assessment relating to the income year in which the debt or part thereof is written off was made;

2[(xviii) in respect of provision for bad and doubtful debt made by a bank for overdue agricultural or rural loan, a sum equal to one and a half per cent of such overdue loan or the amount of actual provision for such bad or doubtful debt in the books of the assessee, whichever is the less;

Provided that if any amount out of the amount so allowed is ultimately recovered, the same shall be deemed to be a profit or the year in which it is recovered];

3[(xviiia)  in  respect  of  provision  for  bad  and  doubtful  debt made by 4[,Bangladesh Development Bank Ltd.] for overdue loan,a some equal five per cent of such overdue loan of the amount of actual provision for such  bad  or  doubtful  debt  in  the  books  of  the Assessee, whichever is the less:

Provided that the deduction shall be allowed only in respect of the assesment years 1987-88, 1988-89, 1989-90 and 1990-91;

Provided further that if any amount out of the amount so allowed is ultimately recoverd, the same shall be deemed to be a profit of the year in which it is recovered.

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1Subs. by F.A. 2017

²Omitted by F.A. 1990
³ Ins. by F.A. 1987
4 Subs. by F.A. 2014

¹[(xviiiaa)  in  respect  of  provision  for  bad  and  doubtful  debt and interest there on made by made by a Commercial Bank including the Bangladesh krishi Bank ²[, Karmo Shongsthan Bank] and the Rajshahi krisi Unnayan Bank,a sum equal to ³[one percent] of the total outstanding loan including interest thereon or the amount of actual provision for such  bad  or  doubtful  debt  nterest  thereon  in  the  books  of  the Assessee, whichever is less:

Provided that the provisions of this cluse shall apply only in respect of such loan as the Bangladesh Bank may, from time to time,classify as bad or doubtful debt;

⁴[Provided further that deduction shall be allowed only in respect of the assessment years 1987-88, 1988-89, 1989-90 and 1990-91; 1991-92, 1992-93, 1993-94, 1994-95,⁵[1995-96, 1996-97, 1997-98, 1998-99 ⁶[ , 1999-2000, 2000-2001 ⁷[, 2001-2002, 2002-2003, 2003-2004 ⁸[, 2004-2005, 2005-2006 and 2006-2007];]]

⁹[Provided further that if any amount out of the amount so allowed isn ultimately recovered, the same shall be deemed to be a profit of the year in which it is recovered:]

¹⁰[Provided  further  that  no  deduction  under  this  clause  shall  be allowed in respect of-

(a)  any  amount  representing  grant  allowed  by  the Government in the form of 15-years Special Treasury Bonds;

(b) any loan advanced to any government  organization, body corporate,  local  authority,  autonomous  body,  or  any  other loan guaranteed by the Government; and

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¹ Ins by F.A. 1990
² Ins. by F.A. 2006
³ Subs. for "five per cent" by F.A. 1997, re-subs. for "three per cent" by F.A. 2003, re-subs. for "two per cent" by F.A. 2005
⁴ Subs. by F.A. 1993
⁵ Subs. by F.A. 1997 for "and 1995-96 or till the assessment year the actual provision in respect of which is equal to the bad and doubtful debts as per Bangladesh bank's guideline in this behalf" ins by F.A. 1995
⁶ Subs. for "and 1999-2000 by F.A. 1999
⁷ Subs. for "and 2001-2002" by F.A. 2002
⁸ Subs. for "and 2004-2005" by F.A. 2005
⁹ Ins. by F.A. 1995
¹⁰ Ins. by F.A. 1993

(c)  any  debt  representing  loans  advanced  to  any  director  of the bank, his nominees or dependants;]

(xix) any expenditure, not being in the nature of capital expenditure, laid out or expended on scientific research in Bangladesh related to the business carried on by the assessee;

(xx) any expenditure of a capital nature laid out or expended on scientific research in Bangladesh related to the business carried on by the assessee:

 (xxi) any sum paid to a scientific research institute, association or other body having as its object the undertaking of scientific research, or to a University, College, Technical School or other Institution for the purpose of scientific research or technical training related to the class of business carried on by the assessee, if such Institute, association or body, or such University, College, Technical School or Institution is, for the time being, approved by the Board for the purpose of this clause.

Explanation- in this clause and in clauses (xix and (xx),-

 (a) "scientific research" means any activities in the field of natural or applied science for the extension of knowledge;

(b) references to expenditure incurred on scientific research do not include any expenditure incurred in the acquisition of rights in, or arising out of, scientific research, but save as aforesaid, include all expenditure incurred for the prosecution of, or the provision of facilities for the prosecution of, scientific research;

(c) reference to scientific research related to a business or class of business includes-

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¹Ins. by F.A. 1996 and subsequently omitted by F.A. 1997

(i)   any scientific research which may lend to or facilitate an extension of that business or, as the case may be, all businesses of that class;

(ii)  any scientific research of a medical nature which has a special relation to the welfare of workers employed in that business or, as the case may be, business of that class;

(xxii) any expenditure, not being in the nature of capital expenditure, laid out or expended on any educational institution or hospital established for the benefit of the employees of the assessee, their families and dependents or on the training of industrial workers, if-

(a) no charge is made for services rendered by such institution or hospital or for the training of the workers; and

(b) no deduction or allowance is claimed for such expenditure under any other clause of this section;

(xxiii) any expenditure in the nature of capital expenditure laid out or expended on the construction and maintenance of any educational institution or hospital established by the assessee for the benefit of his employees, their families and dependents, or on any institute for the training of industrial workers, if-

(a)       no charge is made for the services rendered by such institution or hospital or for the training of the workers; and

(b)       no deduction or allowance is claimed under any other clause of this section for the same income year in respect of expenditure represented either wholly or partly by any asset;

(xxiv) any expenditure laid out or expended on the training of citizens of Bangladesh in connection with a scheme approved by the Board for purposes of this clause;

(xxv)       any expenditure, not being in the nature of capital expenditure or personal expenses, incurred by an assessee in connection with visits abroad as a member of a trade delegation sponsored by the Government;

(xxvi)      any sum paid on account of annual membership subscription to a registered trade organisation within the meaning of the Trade Organisations Ordinance, 1961(XLV of 1961), or to a professional institution recognised by the Board in this behalf;

(xxvii)     any expenditure, not being in the nature of capital expenditure or personal expenses of the assessee, laid out or expended wholly and exclusively for the purpose of the business or profession of the assessee.

(2) Where any premises, building, machinery, plant or furniture is not wholly used for the purposes of business or profession, any allowance or deduction admissible under this section shall be restricted to the fair proportional part of the amount which would be allowable if such premises, building, machinery, plant or furniture was wholly so used.

Explanation.- For the purposes of this section, the expression "plant" includes ships, vehicles, books, scientific apparatus and surgical and other instruments or equipment's used for the purpose of business or profession.

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