Icab pe iii taxation ii suggested answer may june 2002 to nov dec 2006

Answer 11(b) According to Section 5 of Gift tax Act, 1990 The value of any property other than cash transferred by way of gift shall be estimated to be the price, which in the opinion of the Deputy Commissioner of Tax would fetch if sold in the open m a r k e t i n t h e d a t e o n which th e gift was made .

Where the value of any property cannot be estimated because it is not salable in the open market, the value shall be determined in the prescribed [Rule #6] manner.

Answer 11(c) According to Rule 6 of Gift tax Rule, 1990 Insurance policy: The amount of money that would be received by encashment of gifted insurance policy would be the price of the said policy.

Shares of Private limited company or firm: The value share shall have to be determined in the proportion of asset of the concerned company or firm in the year in which shares were gifted.

Q.12. Mention the gifts which are exempted from Gift Tax. Answer 12 According to Section 4 of Gift tax Act, 1990 The followings are the gifts that are exempt from gift tax:  Of property situated outside Bangladesh:  Gift made to the Government or any local authority;  To the following funds or institutions for charitable purposes: i) any university established under the law in force in Bangladesh or any educational institutions including polytechnic institute, recognized by the education board or recognized or run by the Government; ii) any hospital recognized or run by the Government or any local authority or any hospital aided by the Govt. or any local authority; iii) any flood or disaster management fund established or approved by the Government; iv) Such institutions or funds for religious or charitable purpose not being a private religious institutions or funds which does not ensure for the benefit of the public, as are established in Bangladesh and approved by the Government for such purposes or to any institutions established for religious or charitable purposes and registered under any law for the time being in force, up to 20% of total income determined for the concerned year or Tk. 100,000 whichever is less;  To dependent relative up to Tk. 20.000 on the occasion of his/her marriage;  By way of payment of policy on insurance or annuity for any person (other than wife) dependent upon him for support and maintenance up to Tk. 20,000;  Under a will;  Under contemplation of death;  To sons, daughter, father, mother, his/her spouse, own brothers and sisters.

General exemption Gift tax shall not be charged under this Act in respect of gifts made by any person during any financial year, subject to a maximum of Tk. 20,000 in the value Q.13. What are the consequences for failure to deposit travel tax collected under section 3(5) of the Travel Tax Act, 2003 within the prescribed time?

Answer 13: Consequences of failure to deposit the collected travel tax to the Government Treasury within the scheduled time 1) Interest @ 2% per month payable for delayed deposits shall be realized from the persons who have the responsibility of collecting travel tax.

2) May forfeit the bank account of the concerned person or association for the default; 3) May take steps through the Civil Aviation authority prevent the flying of the Aircraft of the concerned airlines from the soil of Bangladesh.

4) May take steps for prevention of repatriation of any money of the concerned Airlines out of Bangladesh.

5) May take any necessary measures/modes of recovery similar to the ones available under the provisions of section 143 of the IT Ordinance 1984.

Q.14. You have been appointed as a Finance Manager in a new manufacturing company which will start commercial production of VATable goods very soon. You are required to submit a report to the Managing