Special agricultural income under Section 41 | Bangladesh Income Tax Act -2023

Special agricultural income under Section 41(ITA-2023)

 

Special agricultural income under Section 41 | Bangladesh Income Tax Act -2023:

As per section-41(ITA-2023),

 

(1) Without prejudice to the generality of section 40, special agricultural income shall be computed in accordance with the provisions of this section.

(2) If an asset is sold in any income year after being used by the assesses for agricultural purposes under section 40, it shall be computed as follows,

namely: —

 

Serial No.	Sales Proceeds	The amount of money deemed as income
(1)	(2)	(3)
1.	If the sale proceeds exceeds the acquisition value of the asset	The amount equal to A-B shall be deemed as income of the concerned assesses for that income year classifiable under the head' Capital Gain';   The amount equal to of B-C shall be deemed to be income of the concerned assesses for that income year classifiable under the head 'Income from Agriculture’;
2.	If the sale proceeds does not exceed the acquisition value of the asset, but exceeds written down value	The amount equal to A-C shall be deemed as income of the concerned assesses for that income year classifiable under the head 'Income from Agriculture'.

 

(3) Where any amount received as insurance, salvage, or compensation in any income year in respect of any asset which has been used by the assesses for agricultural purposes is discarded, demolished, or destroyed and the amount of such money exceeds the written down value of such asset, the said amount shall be included under the head income from agriculture as described below,

namely: —

 

Serial No.	Sales Proceeds	The amount of money deemed as income
(1)	(2)	(3)
1.	If the amount from insurance, salvage or compensation exceeds the acquisition value of the asset	The amount equal to A-B shall be deemed as income of the concerned assessee for that income year classifiable under the head 'Capital Gain'; The amount equal to B-C shall be deemed as income of the concerned assesses for that income year classifiable under the head 'Income from agriculture'.
2.	If the amount for insurance, salvage or compensation amount does not exceed acquisition value of the asset, but exceeds the written down value	The amount equal to A-C shall be deemed as income of the concerned assesses for that income year classifiable under the head 'Income from Agriculture'.

 

(4) For the purposes of this section, —

A = the sale proceeds of the asset or, as the case may be, the proceeds of

insurance, salvage or compensation against the asset,

B = acquisition value of assets, and

C= the written down value of asset after allowing for depreciation

under Third Schedule.

(5) As per column (2) of the tables in sub-sections (2) and (3), if the difference between the sale proceeds or, as the case may be, the amount received on account of insurance, salvage or compensation and the written down value of the asset, is negative, the amount shall be deemed to be spent on “Income from Agriculture”, and shall be included under the allowable general deduction.

 

 Frequently Asked Questions (FAQs):

1. What is Special Agricultural Income under Section 41?

 Special agricultural income refers to specific earnings derived from agricultural activities as defined by Section 41 of the Bangladesh Income Tax Act 2023. This includes income from land used for agricultural purposes, such as crop cultivation and primary processing by the cultivator.

2. Is agricultural income tax-free in Bangladesh under the 2023 Act?

Agricultural income is partially exempt. Under the Income Tax Act 2023, individual taxpayers may enjoy an exemption on agricultural income up to a certain threshold (currently 200,000 BDT) provided it is their primary source of livelihood. Always check current year schedules for updates.

3. How is income from tea and rubber treated under Section 41?

Income from tea and rubber estates is generally treated as a hybrid of business and agricultural income. Typically, 60% is considered agricultural income (often falling under special provisions), while 40% is taxed as business income.

4. What are the tax rates for special agricultural income?

The tax rate depends on the taxpayer category. While small-scale farmers may be exempt, commercial agricultural ventures and companies are taxed at applicable corporate rates or specific reduced rates as notified by the NBR.

5. Which documents are needed to claim Section 41 tax benefits?

To claim benefits for special agricultural income, you must maintain a "Krishok" (Farmer) card, land ownership records (Khatian), receipts for inputs (seeds/fertilizer), and a detailed record of sales/produce.

6. Does Section 41 apply to fisheries and poultry?

While fisheries and poultry are agricultural in nature, they often fall under specific SROs (Statutory Regulatory Orders) or distinct sub-sections. Section 41 primarily focuses on land-based crop production and its direct derivatives.