Taxation – Spring 2026 – Midterm

Question 01: (a) How would you define public finance? Briefly explain the importance of taxation as a source of public revenue. (b) Explain the tax rates applicable to different types of companies under the Finance ACT 2023. [Marks: 2.5+2.5=5] Question-02: A, B & C are partners sharing profits and losses equally. The particulars of income for the year ended on 30th June 2025 are as under: Rental Income: The firm has a house property in Tejgoan Commercial area, Dhaka consisting 4 commercial floors. One floor is solely used by the firm and rest of the floors are let out to the 3 private banks at monthly rent of Taka 40,000 per floor. The firm received Taka 90,000 at the beginning of the income year for putting an advertising billboard of Partex group in the roof of the building for 02 years agreement. Business in Textile industry: The trading account of the textile business is as under: Debit Opening stock Purchase Gross profit 5,00,000 3,400,000 3.300,000 7,200,000 Sales revenues Closing stock Credit 6,500,000 7,00,000 7,200,000 The closing stock has been valued at 10% under cost. Depreciation and other expenses debited to the profit and loss account amount to Taka 4,72,000 which include among others, repairs for the building Tk. 12,000 (for let out part) and Tk. 8,000 (for the part used by the firm). Municipal tax Tk. 23,000 (total municipal tax Tk. 27,000 of which tenant paid Tk. 4,000). Annual contribution to a trade association Tk. 4,500, Contribution to the Chief Advisor's relief fund Tk. 2,06,200, Salaries to the partners A, B & C Tk. 26,000, 24,000 and 32,000 respectively, installment paid for a loan Tk. 20,000 (Interest 4,200). Further there was a loss of Tk. 75,000 from speculative transaction. A has no other sources of income but B and C were also partners in another frim with D as the third partner. The shares of B, C & D for the year ended 30th June 2024 were as under: Partners B C D Salary 20,000 60,000 Interest 30,000 Profit/Loss 10,000 (62,000) 0.00 Total 30,000 (32,000) 60,000 C has also income from a house property in Dubai amounting Tk. 9,60,000 (After deducting 20% tax at source) and B has other personal income of Tk. 51,000 Required: (i) Compute the taxable income and tax liability of the Firm owned by A, B & C (ii) Compute the taxable income in the hand of the partners A, B & C [Marks: 10]