Special Allowance of Interest under Section 53 | Bangladesh Income Tax Act, 2023 (As Amended by the Finance Act, 2026)
As per Section 53 of the Bangladesh Income Tax Act, 2023:
Special Allowance of Interest
Notwithstanding anything contained elsewhere in this Act, any interest paid by a resident person—other than a bank, finance company, or leasing company—to an Associated Enterprise during an assessment year shall be allowed as a deductible business expense.
Frequently Asked Question(FAQ):
1. What is the special allowance of interest under Section 53 of the Bangladesh Income Tax Act, 2023?
Section 53 allows a resident taxpayer, other than a bank, finance company, or leasing company, to claim interest paid to an Associated Enterprise as a deductible business expense, subject to the conditions, procedures, and limits prescribed under the Income Tax Act and the Finance Act, 2026.
2. Who can claim the interest deduction under Section 53?
The deduction is available to resident taxpayers except banks, finance companies, and leasing companies. The interest must be paid to an Associated Enterprise and must satisfy the applicable legal requirements.
3. What is an Associated Enterprise for the purpose of Section 53?
An Associated Enterprise is a related party as defined under Section 233 of the Bangladesh Income Tax Act, 2023. It generally refers to enterprises that are connected through ownership, management, or control and are subject to the transfer pricing provisions of the Act.
4. How did the Finance Act, 2026 affect Section 53?
The Finance Act, 2026 amended Section 53 by providing that the deductibility of interest paid to an Associated Enterprise is subject to the procedures, conditions, and limits prescribed by the National Board of Revenue (NBR). Taxpayers must comply with these requirements to claim the deduction.