Illustration explaining the rules for determining capital gains under Section 61 of the Bangladesh Income Tax Act 2023.

Other matters in determination of capital gains under Section 61 | Bangladesh Income Tax Act -2023

 

As per section-61(ITA-2023),

 

Other Matters Relating to the Determination of Capital Gains

(1) If the fair market value (FMV) of a capital asset exceeds the consideration value declared by the assesses by more than 15%, the Deputy Commissioner of Taxes (DCT) may determine the FMV of that asset, subject to obtaining prior approval from the Inspecting Joint Commissioner.

(2) Where the fair market value of an asset is more than 25% higher than its declared acquisition value, the Deputy Commissioner of Taxes may, in accordance with the procedure prescribed by the Board, offer to purchase the asset at the declared acquisition value.

(3) Any capital gain arising from the transfer of all capital assets of a partnership firm to a new company incorporated under the Companies Act, 1994 (Act XVIII of 1994) shall be exempt from tax, provided that the entire consideration received from the transfer is invested in the equity shares of the newly formed company.

You may learn more-

Special agricultural income under Section 41 | BangladeshIncome Tax Act -2023-https://shorturl.at/6kJwx

Charge of tax on retained earnings, reserves or surplus etcunder Section 22(ITA-2023)-https://shorturl.at/DSpdE

Frequently Asked Question (FAQ):

Q1. What are the other matters in determination of capital gains under Section 61?
Section 61 provides additional rules for determining capital gains, including the use of fair market value when the declared consideration is significantly lower than the asset's actual value.

Q2. When can the tax authority determine the fair market value of an asset?
The Deputy Commissioner of Taxes may determine the fair market value of an asset, with prior approval from the Inspecting Joint Commissioner, when the fair market value exceeds the declared consideration by more than 15%.

Q3. Why is fair market value important in capital gains calculation?
Fair market value helps ensure that capital gains are calculated accurately and prevents undervaluation of assets for tax purposes.

Q4. Who approves the determination of fair market value under Section 61?
The determination of fair market value must receive prior approval from the Inspecting Joint Commissioner before being applied by the Deputy Commissioner of Taxes.