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  • Income From Agriculture (Chapter 9)

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    Fahim Shahriar Mozumder
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    Income from Agriculture (Chapter 9) Agricultural income is the fourth of seven income heads under the Income Tax Ordinance of 1984, though agriculture remains an important sector of Bangladesh's economy. Bangladesh did not tax agricultural revenue until 1976 when it was brought under the tax net through legislative changes. Agricultural income is defined as income derived from agricultural activities in Bangladeshi land, including income from buildings on or near the land. Certain processing activities and the sale of native agricultural products can also constitute agricultural income. Allowable expenses against agricultural income include land development taxes, local taxes on agricultural land, production costs, insurance, and interest payments.

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    Income from Agriculture (Chapter 9)

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    Income from Agriculture (Chapter 9) Agricultural income is the fourth of seven income heads under the Income Tax Ordinance of 1984, though agriculture remains an important sector of Bangladesh's economy. Bangladesh did not tax agricultural revenue until 1976 when it was brought under the tax net through legislative changes. Agricultural income is defined as income derived from agricultural activities in Bangladeshi land, including income from buildings on or near the land. Certain processing activities and the sale of native agricultural products can also constitute agricultural income. Allowable expenses against agricultural income include land development taxes, local taxes on agricultural land, production costs, insurance, and interest payments.

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    26 views2 pages

    Income From Agriculture (Chapter 9)

    Uploaded by

    Fahim Shahriar Mozumder
    Income from Agriculture (Chapter 9) Agricultural income is the fourth of seven income heads under the Income Tax Ordinance of 1984, though agriculture remains an important sector of Bangladesh's economy. Bangladesh did not tax agricultural revenue until 1976 when it was brought under the tax net through legislative changes. Agricultural income is defined as income derived from agricultural activities in Bangladeshi land, including income from buildings on or near the land. Certain processing activities and the sale of native agricultural products can also constitute agricultural income. Allowable expenses against agricultural income include land development taxes, local taxes on agricultural land, production costs, insurance, and interest payments.

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    Income from Agriculture (Chapter 9)

     Introduction (9.1)
    According to section 20 of the Income Tax Ordinance (ITO), 1984,
    Agricultural income is the fourth of seven income heads. It's the most
    important sector in Bangladesh's economy, although its tax contribution is
    small.
    Bangladesh didn't tax agricultural revenue until 1976. It has brought
    under the tax net through the Finance Act 1976.

     Characteristics of agricultural income (9.4)


    According to the ITO, 1984, agricultural revenue has the following
    characteristics:
    1. It comes from Bangladeshi agricultural land. Land might be urban or rural.
    Any agricultural income from land outside Bangladesh is not considered
    agricultural income.
    Such money will be included in a Resident assesses total world income under
    "Foreign income" and would be liable to tax.
    2. Any building on or close to agricultural land can provide income.
    3. It must originate from basic agricultural activities like field cultivation,
    sowing seeds, planting, and similar operations on the soil.
    4. Agricultural products should be marketed normally. Native produce may not
    be marketable.
    Produce may need processing to be marketable. Increasing the value of crops
    is also considered agricultural revenue.
    5. Income may come from gain on sale or discarded value of agricultural
    machinery or plant;
    6. Some income, such as tea, rubber, tobacco, sugar, may be deemed
    agricultural.
     Admissible Expenses
    1. Land development tax:
    Any land development tax or rent paid in respect of the land used for
    agricultural purposes.
    2. Local tax:
    Any tax, local rate paid for the agricultural land is an allowable deduction.
    As long as the tax is paid on any income that comes from or arises from
    agriculture production, this deduction is not allowed.
    3. Production Costs
    4. Insurance premium
    5. Maintenance cost for irrigation plant
    6. Depreciation
    7. Interest on mortgage
    8. Interest on borrowed capital
    9. Losses from the sale of demolished Machineries
    10.Losses on sale or exchange of machinery
    11.Other expenses

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