0411-323 Final Solved Questions & Study Guide (Fall 2025)

0411-323 Income Tax Accounting Final Exam Solved Questions — Semester Fall 2025 (DIU BBA)

Introduction

Income Tax Accounting (Course Code: 0411-323) is a core subject in the BBA program at Daffodil International University (DIU), designed to equip students with practical knowledge of Bangladesh’s income tax laws, computation methods, and compliance requirements. This course covers key topics such as tax deducted at source (TDS), capital gains, income from financial assets, business income, and taxable vs. exempt income—all critical for future accountants, tax consultants, and business professionals in Bangladesh.

For DIU BBA students preparing for the Fall 2025 final exam, practicing past questions is one of the most effective ways to master the subject. This solved guide provides detailed, step-by-step solutions to the Income Tax Accounting final exam paper, helping you understand how to apply tax laws, compute taxable income, and avoid common mistakes. Whether you're revising for the exam or clarifying complex concepts, this resource is tailored to boost your confidence and performance.

Exam Overview & Mark Distribution

The Income Tax Accounting (0411-323) final exam for Fall 2025 assesses students' ability to interpret tax laws, compute taxable income under different heads, and apply accounting principles to real-world scenarios. The paper includes:

• Conceptual questions (e.g., definitions, interpretations)
• Numerical problems (e.g., capital gains, financial asset income, taxable income computation)
• Mark distribution: 7 + 8 + 8 + (remaining marks from truncated question) = 31+ marks

Solved Questions

Question 1(a): Explain tax deducted at source, tax-exempt government securities, and taxable government securities.

• Tax Deducted at Source (TDS):

- TDS is a pre-payment of income tax where the payer deducts tax at a prescribed rate before making payments (e.g., salary, rent, interest, or brokerage).

- Under Bangladesh’s Income Tax Ordinance, 1984, TDS applies to various income sources, and the deducted amount is credited to the taxpayer’s account.

- Example: When Mr. Anwar sells a house, the buyer deducts TDS on the brokerage fee (as seen in Question 2).

• Tax-Exempt Government Securities (TEGS):

- These are government-issued bonds or securities where the interest income is fully exempt from income tax.

- Example: 10% TEGS (as in Question 3) means the interest earned is not included in taxable income.

- However, collection charges (e.g., bank fees) can be deducted from the exempt income.

• Taxable Government Securities (TGS):

- Unlike TEGS, interest from TGS is fully taxable under the head "Income from Financial Assets."

- Example: Interest on taxable government bonds (Tk. 4,750 in Question 3) is added to taxable income after deducting allowable expenses (e.g., collection commission).

Question 1(b): Interpret business, business income, capital gain, and financial asset income.

• Business:

- Defined under Section 2(13) of the Income Tax Ordinance as any trade, commerce, or manufacture carried out for profit.

- Includes professions, vocations, or adventures in the nature of trade.

- Example: Running a retail shop or providing consultancy services.

• Business Income:

- Income derived from business activities, computed after deducting allowable expenses (e.g., rent, salaries, depreciation).

- Taxed under the head "Income from Business or Profession."

- Example: Profit from selling goods or services.

• Capital Gain:

- Profit from the sale of a capital asset (e.g., land, house, shares).

- Computed as: Sale Price – (Purchase Price + Improvement Costs + Transfer Expenses).

- Taxed under "Income from Capital Gains" (as in Question 2).

• Financial Asset Income:

- Income from investments like interest, dividends, or bond profits.

- Taxed under "Income from Financial Assets" (e.g., interest on debentures, dividends from shares).

- Example: Interest on taxable government securities or debentures (Question 3).

Question 2: Calculate taxable capital gains for Mr. Anwar.

Given Data:

• Purchase price (Nov 2020): Tk. 1,612,000
• Brokerage (2%): Tk. 32,240
• Renovation cost: Tk. 560,000
• First sale agreement (July 2023): Tk. 5,400,000 (earnest money Tk. 155,000 forfeited)
• Final sale (June 2024): Tk. 5,612,000
• Brokerage (1.5%): Tk. 84,180 (TDS deducted)
• Fair market value (FMV) on sale date: Tk