Chapter -6 Income from Salary

Meaning of salary
Salary means a fixed amount of payment received from employer by an employee for service
rendered. In general, salary means any payments received by an employee for physical or mental
work from the employer for a specific time period.
In Income Tax Ordinance, 1984 an exclusive definition is given in Section 2(58) where it is said
that salary includes:
(a) any pay or wages,
(b) any annuity, pension or gratuity,
(c) any fees, commissions, allowances, perquisites or profit in lien of in addition to salary and
wages,
(d) any advance salary; and
(e) any leave encashment.

Chargeability of Income under Salary

There are three conditions under section 21(1) where income shall be chargeable to income tax
under the head “Salaries”. The three conditions are given bellow-

1. Any salary due from an employer to the assessee in the income year, whether paid or not.
2. Any salary paid or allowed to employee in the income year, by or on behalf of an
employer though not due or before it become due to him; and
3. Any arrears of salary paid or allowed to him in the income year by or on behalf of an
employer, if not chargeability to income tax for any earlier income year.

Under section 21(2) the amount shall not again be included in his income of any other year, if the
amount of salary of an assessee is one time included in his total income of a year on the basis of
it had become due or that it had been paid in advance in that year. Under the head “Salaries”
some points are included with regard to the chargeability of income.
 Employer and employee relationship: An income is chargeable under the head of “
Salaries” if there must have the “Employer and employee” relationship. Generally, a
director of a company is not an employee but can be treated if it is contracted with
him.
 Voluntary foregoing of salary: Voluntary foregoing or surrender of salary is mere
application of the income and the salary is nevertheless taxable. But if the salary is to
forego compulsorily, it cannot be treated as income.
 Place of accrual: Where services are rendered at that place salaries accrue. If the any
people work for Bangladesh or local authority to citizen of the country serving
outside of Bangladesh then the peoples’ salary will be deemed to accrue in
Bangladesh. It may even be paid in outside of Bangladesh.

Elements of salary
Based on the definition of salary and practical situation elements of salary can be identified as
follows:
 1. Basic salary
2. Bonus
3. Dearness allowance (e.g. cause of inflation)
4. Commission and fees
5. Annuity
6. Pension
7. Gratuity
8. Leave encashment
9. Compensation (for loss)
10. Special allowance
11. Medical allowance
12. HRA (cash, rent free accommodation and accommodation with concessional rate)
13. Entertainment allowance
14. Conveyance allowance (cash, car and car with cash)
15. Servant allowance
16. Outstanding and advanced salary
17. Contribution to RPF or URPF or SGF
18. Overtime and
19. Other benefits.

The provision regarding perquisites

Perquisites generally mean any casual emoluments or allowances other than the salary or wages
the employee get from employer. Perquisites also known as personal advantages get from the
employer if contracted or not. Mixed reimbursements of necessary disbursements are not
perquisites. The inclusive definition of “Perquisites” as per section 2(45) is as under:

Perquisites includes-
a) The value of rent-free accommodation;
b) The value of any concession in the matter of rent respecting any accommodation;
c) Any sum payable by the employer, whether directly or indirectly, to affect an insurance
on the life of, or to affect a contract for an annuity for the benefit of, the assessee or his
spouse or any of his dependent child;
d) The value of any benefit provided free of cost or at a concessionary rate; and
e) The sum paid by an employer in respect of any obligation of an employer.

Of the above five items, provisions have been made in Rule 33(B) for (a) and (b) respecting
determination of value for taxation purpose. The item under (c) is specific and requires no
explanation. And for the item (d) and (e) provisions made in Rule 33.

An employee receives the different types of perquisites, which are discussed below-

1. House rent allowance (HRA): An employee can receive in cash for rent of his
house rent allowance or quarter. The provision for calculating of the amount chargeable to tax
are as follows-
  Where HRA paid in cash- Sum of HRA exceeding lower of Tk.25000 per month or
50% of basic salary.
 Where rent-free residential accommodation is provided- Lower of Annual value of
the house or 25% of basic salary.
 Where concessional rent residential accommodation is provided- Excess of annual
value of the house as computed under the last one over the actual rent paid by the
employee.

2. Conveyance allowance: An employee may receive cash conveyance allowance or vehicle

from his employer. Provisions for computation of allowance or inclusion in salary for this
perquisite are as follows-

 Where conveyance allowance is paid in cash- Conveyance allowance up to Tk.30000

is exempted. If it exceeds Tk.30000 the exceeding amount will be added with the
salary.
 Where a vehicle is provided for office and personal use- An amount of 5% of the
basic salary or Tk. 60000, higher one will be added with salary.
 If additional allowance over and above the vehicles is received- Additional allowance
plus 5% of basic salary or Tk. 60000higher one will be added with salary.

3. Medical allowance: 10% of Basic salary or Tk. 120,000 whichever is less is exempted.

4. Entertainment allowance: Amount received by the employee in full will be added with
salary.

5.Contribution to Recognized Provident Fund (RPF): In case of RPF an equal amount is

contributed by the employee is also given by the employer. Here the contribution of employer’s
is added with the salary.

6. Interest of Recognized Provident Fund: Interest exceeding 14.5% rate or 1/3rd of basic
salary (lower one) is added with salary.

7. Balance of Unrecognized Provident Fund: Amount received by the employee at the end of
service will be added with salary to the extent of employer’s contribution and interest thereof.

Effect of Various types of Provident Fund on Tax assessment:

So far we have discussed various type of provident fund. The effect of various types of Provident
Fund on tax assessment can now be seen from the following two charts:
i. Effect on computing Total Salary Income:

Item R.P.F. Govt. P. F. URPF

Employee’s contribution Remain with salary, no future Remain with salary, Remain with salary,
addition in required. no future addition no future addition
required. required.
Employer’s contribution To be added with salary. Irrelevant. Not added with salary.

Interest on P.F. Exempted up to ⅓ of Basic Not to be added. Not to be added.

Salary or to the extent of
interest @ 14.5% whichever is
less.
Accumulated Balance Not to be added with salary. Not to be added to Only the employees
received at end of the salary. contribution and
service interest there of
needed to be added.
i. Effect on tax Exemption:

Item RPF Govt. P. F. URPF

i) Employee’s contribution Eligible for tax exemption. Eligible for tax Not
exemption. exempted.

ii) employer’s contribution Tax exempted. Irrelevant. Irrelevant.

iii) interest on P.F. Tax exempted. Irrelevant. Irrelevant.
iv) accumulated Balance As previously not added, so question Irrelevant. Taxable.
of exemption does not arise.

COMPUTATION OF INCOME FROM SALARY AT A GLANCE:

Description Amount/Percentage that will be added to salary 

1. Basic Salary Full
2. Dearness Allowance Full
3. Bonus Full
4. Commission and fees Full
5. Advance salary Full
6. Accrued Salary Full, provided it was not taxed in earlier period.
Last 2 months due, 10 months taxed, current year
12+2=14
7. Leave encashment Full
8. Pension Nothing, since fully exempted
9. Gratuity Actual amount less Tk. 2.5 crore exempted
10. Annuity Full
11. Profit in lieu of Salary Full
12. Profit in addition to Salary Full
13. Education Allowance for children Full
14. Employer's contribution to RPF Full
15. Employer's contribution to Full
Approved Superannuation Fund
16. Employer's contribution to Full
Approved Gratuity Fund
17. Employer's contribution to life Full
insurance policy
18. Entertainment Allowance Full(cash)
19. Medical Allowance* Medical allowance received less Tk. 120,000 or 10%
of basic salary whichever is lower.
20. Traveling Allowance Excess over actual.
21. Special Allowance Nothing, if given for official purpose.
22. House Rent Allowance (cash) Actual allowance less exemptions of Tk. 25,000 per
month (annually Tk. 300,000) or 50% of basic salary
whichever is less
23. Rent Free Accommodation Rental value or 25% of basic whichever is less
24. Accommodation at concessional Rental value or 25% of basic whichever is less, minus
rate deducted rent
25. Conveyance Allowance Actual amount less exemption of Tk. 30,000 on an
annual basis.
26. Transport/conveyance facility Higher of Tk. 60,000 or 5% of basic salary; if
conveyance facility is given for personal, both
personal and official purpose. Nothing will be added if
it is given only for official purpose.
27. Both Conveyance Allowance & Higher of Tk. 60,000 or 5% of basic salary Plus
Transport / conveyance facility Conveyance Allowance; Here no exemption will be
allowed for cash allowance.
28. Interest on RPF Actual Interest less exempted to the extent of the
interest 14.5% rate or 1/3 of basic salary, whichever is
less.
29. Free tea, coffee or lunch in office Nothing
premises
30. Free dress, telephone, power, gas, Nothing
water in office etc.
31. Free caretaker, sweeper etc. Nothing
32. Servant allowance Full
33. Compensation Full
34. Allowance received as Head of the Full
department / Charge allowance
35. Overtime Full
36. Residence telephone bills / utility Full
bills / club bills reimbursed
* Medical expense or medical allowance not exceeding Tk. 10,00,000 received or receivable by
an employee being a person with disability shall not be included in his total income; Medical
expenses reimbursed by an employer to an employee, other than an employee who is a
shareholder director, for a surgery relating to heart, kidney, eye, liver and cancer of the
employee, shall not be included in the total income of such employee.
 Specimen form for computing “income from salary”
Name of the assessee:
Income year:
Assessment year:
Computation of total taxable income under the head of income from salary, section 21
Particulars Tk. Tk.
1. Basic salary
2. Dearness allowance
3. Annuity
4. Festival bonus / performance bonus
5. Leave encashment/Compensation
6. Employer's contribution to recognized provident fund
7. Interest on recognized provident fund
Less: exempted - lower of interest @ 14.5% or 1/3rd of basic salary
8. Advance salary / outstanding salary
9. Entertainment allowance
10. Medical allowance
Less: exempted - Tk. 120,000 or 10% of basic salary whichever is
lower
11. House-rent allowance
Less: exempted - lower of 50% of basic salary or Tk. 300,000
(annually)
12. Rent free accommodation (furnished or not furnished):
The rental value or 25% of basic salary whichever is lower
13. Accommodation at a concessional rate:
The rental value or 25% of basic salary whichever is lower
Less: rent paid by the employee
14. Conveyance allowance
Less: exempted - (up to Tk. 30,000)
15. Conveyance facility: Higher of Tk. 60,000 or 5% of basic salary
16. Conveyance facility & allowance: both will be added & no exemption
is allowed.
17. Servant's allowance
18. Overtime / Charge allowance
19. Residence telephone bill/utility bill/ club bill reimbursed
20. Pension
Less: Exempted - Full
21. Gratuity
Less: Exempted - Up to Tk. 2,50,00,000
22. Other benefits
Total income from salaries

Problem-1 Mr. Rahman is a service holder. Following are the particulars of his income from
salary for the year ended on 30th June 2019.
1. Basic salary Tk. 30,000 per month and Dearness allowance @ 20% of B.S
2. Three festival bonus each equal to one month’s B.S which he spent partly for family and
partly for poor people.
3. House rent allowance 60% of B.S and Conveyance allowance Tk. 5,000 per month.
4. Medical allowance Tk. 2,500 per month (Actual expense Tk. 22,500 in a year).
5. He receives Tk. 3,000 pm as commission and fee.
6. Received entertainment allowance Tk. 300 per month (The actual expense has been
incurred during the year Tk. 3,000.) and he has been provided daily office lunch and
coffee for Tk. 250
7. His contribution to recognized provident fund @ 10% of B.S. The employer also
contributes the same amount.
8. He received interest on provident fund @ 20% on accumulated balance equivalent to
Tk.10,000.
9. He received Tk.16,000 as traveling allowance in India but he saved Tk.2,000
10. He has been given a servant allowance of Tk. 2,000 per month.
11. He contributes 1% of his B.S to the group insurance scheme.
12. He has also been provided with telephone facilities at his residence, the bill for this
telephone reimbursed amounted to Tk.12,000.
13. He has paid Tk. 500 per month on a deposit pension scheme.
14. During the year he received arrear salary of Tk. 16,000, not charged to income for any
earlier income year.
15. Overtime received Tk. 5,000 and Leave encashment Tk.20,000
16. Annuity received Tk. 15,000 and Gratuity received Tk. 50,000
17. Compensation received from previous employer Tk. 60,000
18. Company pays Tk. 2,000 pm for his two school going children which is paid to the
school authority directly.

Required: Compute the total taxable income under the head of Income from Salary.

Name of the assessee: Mr. Rahman

Income year: 2018-19
 Assessment year: 2019-20
Computation of total taxable income under the head of income from salary, section 21
Particulars Tk. Tk.
Basic salary (BS) 30000x12 360,000
Dearness allowance 20% of BS 72,000
Festival bonus (3x30000) 90,000
House rent allowance (60% of BS) 216000
Less: exempted Tk. 25000 pm or 50% of BS, which one is less 180,000 36,000
(300000 or 180000)
Conveyance allowance (5000x12) 60000
Less: exempted upto Tk.30000 30000 30,000
Medical allowance (2500x12) 30000
Less: Tk. 120,000 or 10% of BS, less one 36,000 ----
Commission and fee (3000 x12) 36,000
Entertainment allowance (300x12) 3,600
Entertainment allowance: lunch and coffee (250x360) 90,000
Less: exempted full 90,000 -----
Employer’s contribution to RPF 10% of BS 36,000
Interest on RPF 20% 10,000
Less: exempted 1/3 of BS or 14.5% of interest on RPF 7,250 2,750
(120000 or 7250, which is less)
Travel allowance saved (16000-14000) 2,000
Servant allowance 2000x12 24,000
Telephone bill 12,000
Arrear salary 16,000
Overtime 5,000
Leave encashment 20,000
Annuity 15,000
Gratuity 50,000
Less: exempted upto 2.5 crore 50,000 ----
Compensation 60,000
Educational expense for children (2000x12) 24,000
Total taxable income from salary 8,44,350
20%= 10000
1%= 10000/20
14.5%= 10000/20x14.5= 7250

Problem 6-1: Mr. Pritom is a service holder. His sources of income for the year ended 30 th June,
2021 were: Basic Salary Tk. 27,500 per month; Medical Allowance Tk. 1,000 per month;
Conveyance Allowance 5% of Basic Salary; Performance Bonus 4 months Basic Salary; and
Leave encashment 10 days leave. He has been provided with a car both for personal use and
office purpose and also a rent-free furnished house with annual rental value of Tk. 50,000. He
received two festival bonuses each equal to 50% of a month's basic salary. He contributed 10%
of basic salary to Recognized Provident Fund (RPF) and his employer also contributed the same
amount. He received interest @ 15% Tk. 20,000 on the accumulated balance of RPF.

Required: Calculate Mr. Pritom's income under the head income from salary.

Problem 6 - 2: Mr. Limon is a service holder. His sources of income for the year ended 30th
June, 2021 were: Basic Salary Tk. 25,000 per month; House rent Allowance 70% of Basic
Salary; Medical Allowance Tk. 1,250 per month; Conveyance Allowance 7.5% of Basic Salary;
Performance Bonus 5 months Basic Salary; and Dearness Allowance 10% of Basic Salary. He
has been provided with a car both for personal use and office purpose. He received two festival
bonuses each equal to a month's basic salary. He contributed 10% of basic salary to Recognized
Provident Fund (RPF) and his employer also contributed the same amount. He received interest
@ 15% Tk. 15,000 on the accumulated balance of RPF.

Required: Calculate Mr. Limon's income under the head income from salary.

Problem 6-3: Mr. Mahfuz is a service holder. He received basic salary of Tk. 22,500 in the
month of July 2018 following the salary structure of 18,000 - 1,500 X 4 - 24,000. The date of
annual increment is 16th November. Besides basic salary he received: Medical Allowance Tk.
1,500 per month; Conveyance Allowance Tk. 2,500 per month; Entertainment Allowance Tk.
500 per month; Performance bonus Tk. 80,000; Mobile bill allowance Tk. 2,000 per month; and
Overtime allowance Tk. 25,000. He has been provided free furnished accommodation for which
the company paid rent of Tk. 5,500 per month. He received two festival bonuses (one in October
and another in December) each equal to one month's basic salary. He contributed 10% of basic
salary to Recognized Provident Fund (RPF) like his employer. He received interest @ 16% Tk.
12,800 on the accumulated balance of RPF.
During the year he incurred and made the following expenses and investments: Life insurance
premium paid: Own (policy value Tk. 500,000) Tk. 60,000 and Spouse (policy value Tk.
300,000) Tk. 25,000; Family expenses Tk. 85,000; Contribution to approved superannuation
fund Tk. 48,000; Purchase of shares: Initial public offerings Tk. 40,000; Unlisted company Tk.
30,000; Listed company Tk. 22,000; Donated to: Prime Minister's Relief Fund Tk. 15,000;
Religious institution Tk. 10,000; Zakat fund Tk. 30,000; Dhanmondi Sports club Tk. 8,000;
Deposited to Pension Scheme per month Tk. 6,000; Purchase of books Tk. 12,000; Purchase of
land Tk. 80,000 and Purchase of motor vehicles Tk. 250,000.

Required: Calculate taxable income for the assessment year 2019 - 20.

Problem 6 - 4: Mr. Mozumder is an executive of a private telecommunication firm. He received

basic salary of Tk. 35,000 per month with: House rent allowance 50% of basic salary: Medical
allowance Tk. 3,500 per month; Conveyance allowance Tk. 2,500 per month; Traveling
allowance Tk. 60,000; Performance bonus Tk. 80,000 and Overtime allowance Tk. 25,000.

He has been provided with a full-time car that he can use both for office and personal purposes.
In this income year he saved Tk. 13,000 from Medical Allowance. He received two festival
bonuses (one in the month of December another in February) each equal to one and half month's
basic salary. He contributed 10% of basic salary to Recognized Provident Fund (RPF) and his
employer also contributed the same amount. He received interest @ 16% Tk. 67,200 on the
accumulated balance of RPF. He also contributed 5% of basic salary to a group insurance
premium.

Because of a salary restructure Mr. Mozumder received Tk. 40,000 as basic salary from the
month of February. During the year he incurred and made the expenses and investments for: Life
insurance premium paid (Policy value Tk. 300,000) Tk. 15,000; Purchase of land Tk. 295,000;
Purchase of shares from primary market Tk. 5,000; Purchase of shares of an unlisted company
Tk. 30,000; Purchase of savings certificate Tk. 15,000; Donated to: Religious institution Tk.
10,000; Zakat fund Tk. 6,000; Sobujbag Sporting club Tk. 8,000; and Purchase of motor vehicles
Tk. 250,000

Required: Calculate taxable income under the head of income from salary for Mr. Mozumder
for the assessment year 2020-21.

35000x7=245000
40000x5=200000 So, total BS 445,000

Problem 6-5: Ms. Rabeya is a service holder. Following are the particulars of her income from
salary for the year ended on 30th June 2021. Compute taxable income from salary and investment
allowance.

Basic salary Tk. 40,000 per month; Dearness allowance 10% of Basic salary, Two festival
bonuses and one performance bonus each equal to one month's basic salary: She has been
provided with a rent free quarter, the annual rental value of which is Tk. 60,000; She has been
provided with a car for official purpose; Tk. 200,000 for Open Heart Surgery, During the year
she received Tk. 6,000 as traveling allowance and Tk. 60,000 from Worker's Participation Fund.

Her contribution to a statutory provident fund @ 10% of basic salary; Interest on provident fund
@ 13% on accumulated balance equivalent to Tk. 2,500; She is given a servant allowance of Tk.
200 per month; She contributes 1% of his basic salary to the Group Insurance Scheme: She has
paid Tk. 500 per month on a Deposit Pension Scheme.

Problem 6 - 6: Mr. Nahid is a service holder. Following are the particulars of his income from
salary for the year ended on 30th June 2021. Compute taxable income from salary.

Basic salary Tk. 35,000 per month; Dearness allowance 10% of Basic salary; Two festival
bonuses each equal to one month's basic salary: He has been provided with a house at a
concessional rate for which Tk. 1,000 per month is deducted from his salary. The annual value of
the house is Tk. 70,000; He has been provided with a car for both office and private use. In
addition to it, he is also provided with Tk. 2,000 per month as conveyance allowance; He has
also been provided with telephone facilities at his residence. The bill for this telephone
reimbursed amounted to Tk. 12.000. During the year he received advance salary of Tk. 16,000;
His contribution to unrecognized provident fund @ 10% of basic salary. The employer also
contributes the same amount: Compensation received from previous employer Tk. 30,000; Leave
encashment Tk. 20,000; Gratuity received Tk. 50,000; and Overtime received Tk. 5,000
Problem 6 - 7: On June 2021, Mr. Areean's basic salary falls on Tk. 10,200 in the scale of
9,600-200 x 12-12,000. His date of yearly increment is on 26th April. He received dearness
allowance @ 10% of basic salary and medical allowance Tk. 300 per month. He received two
bonuses equivalent to one month's basic salary-one received before the date of increment and
another after increment. He contributes 10% of his basic salary to a recognized provident fund
from which he has also received an interest of Tk. 1,500 @ 14% interest. His employer also
contributes the same amount to the RPF.

He has been provided with a rent-free quarter and a car for both official and personal purpose.
He is also provided with cash conveyance allowance of Tk. 2,000 per month. During the year he
has also received an entertainment allowance of Tk. 5,000 of which Tk. 4,500 has actually been
spent. His investments during the year were: Purchase of shares of a unlisted company Tk. 2.000;
Purchase of land Tk. 10,000; Payment of his life insurance premium Tk. 4,000 (Policy value Tk.
45,000); Purchase of books and magazine Tk. 3,000; and Contribution to a Deposit Pension
Scheme Tk. 500 on a monthly basis.

Requirement: Compute taxable income of Mr. Areean.

2020July 10000……………………………………….. April 200…………………June 10200 21

10000x9+10200x2+ 10000/30x25+10200/30x5=

Name of the assessee: Mr. Areean

Income year: 2020-21
Assessment year: 2021-22
Computation of total taxable income under the head of income from salary, section 21
Particulars Tk. Tk.
Basic salary (10000x9+10200x2+10000/30x25+10200/30x5) 120433
Dearness allowance 10% of BS 12043
Medical allowance (300 x12) 3600
Less: exemption Tk. 120000 or 10% of BS, which is less 12043 ----
Bonus (10000+10200) 20200
Interest on RPF 14% 1500
Less: exempted upto 14.5% or 1/3 of BS, less one 1554 ----
(1554 or 40144)
Employer’s contribution to RPF 10% of BS 12043
RHA: Rent free accommodation (rental value or 25% of BS) less 30108
one (RV or 30108)
Conveyance facilities: Tk. 60000 or 5% of BS higher one 60000
Add: Conveyance allowance (2000x12) 24000 84000
Entertainment allowance 5000
Total taxable income 283,827
14%=1500

1%= 1500/14

14.5%= 1500/14x14.5=1554

July………10000……………April Increment 200……………June 10200

9x10000+10200x2+10000/30*25+10200/30*5

Problem 6-8: Mr. Nazmul Haque is the head of the Department of Business Administration of a
reputed private university in Bangladesh. He has joined the university on July 01, 2019. He has
received the following income for the year ended on 30th June, 2020.

Basic pay Tk. 100,000 per month sent directly to his bank account; He has been provided with
accommodation fully furnished by the university; the annual rental value of the house is Tk.
250,000; 10% of his basic salary is deducted for this purpose; Full time car for 24 hours for his
own and family use; Company pays Tk. 20,000 per month for his two school going children
which is paid to the school authority directly; He received two festival bonuses and one
performance bonus each equivalent to basic pay during the Eid time which he spent partly for his
family and partly for the poor people in his village; Driver's salary of the full time car Tk. 7,000
per month paid to driver's bank account.

Company has also paid Tk. 200,000 to him during the year being the reimbursement of various
utility bills of his house; Office phone and mobile bill paid by the university Tk. 20,000 during
the year; He was paid Tk. 200,000 for his overseas travels for the official conference out of
which he saved 25% during the year; Bill paid for the membership of Dhaka club by the
university Tk. 100,000; Medical allowance Tk. 10,000 per month; Entertainment allowance Tk.
10,000 per month; actual expense in this regard Tk. 150,000; He has contributed 10% of her
basic salary to an unrecognized provident fund. His employer also contributed the same amount.
Interest on the said fund @ 18% is Tk. 1,800 during the period; He has contributed 2% of her
basic pay to a group insurance scheme.

During the year he has claimed investment allowance for: Purchase of Debentures from the
secondary market Tk. 25,000; Insurance premium Tk.20,000 (Policy value Tk. 250,000);
Household expenses Tk. 200,000; Payment to his teaching assistant Tk. 25,000; Purchase of
government treasury bond Tk. 100,000; Donated Tk. 50,000 to the Prime Minister's Relief Fund;
Donated to Government Zakat Fund Tk. 25,000; Donated to his children's school Tk. 10,000;
and Loan installment paid to Prime bank Tk. 40,000 (including Tk. 2.000 interest).

Required: Calculate the total taxable income of Mr. Nazmul Haque for the year under the head
of income from salary, Section 21.

Problem 6-9: On June 2021, Ms. Tania Ali's basic salary falls on Tk. 56,000 in the scale of
40,000-4,000 x8 -72,000. Her date of yearly increment is on 21 st March. She received dearness
allowance @ 20% of basic salary and medical allowance Tk. 3,000 per month. She received two
festival bonuses and one performance bonus each equivalent to one month's basic salary in the
month of September, December and May respectively.

She contributes 10% of his basic salary to a recognized provident fund from which she has also
received an interest of Tk. 1,500 @ 15% interest. Her employer also contributes the same
amount to the RPE. She has been provided with 60% of his basic salary as house rent allowance
and a full-time car by the employer. Company gave her International Air ticket for a tour as a
reward for her performance in addition to her service contract for which the company spent Tk.
50,000. During the year she has also received an entertainment allowance of Tk. 10,000 of which
Tk. 7,500 has actually been spent. Her taxable income from other sources was Tk. 400,000
during the year.

Her investments during the year were: Purchase of shares of secondary shares of public limited
company Tk. 10,000; Purchase of shares of a registered partnership firm Tk. 8.000; Payment of
her life insurance premium Tk. 12,000 (Policy value Tk. 1,00,000); Purchase of books and
magazine Tk. 3,000; Contribution to a benevolent fund Tk. 500 on a monthly basis; Donation to
a mosque Tk. 15,000; and Donation to Anjuman Mufidul Islam Tk. 6,000.
Required: Compute taxable income.