1. Computation:

Amortization allowance under this part shall be computed on the basis of straight line method.

2. Amortization of license fee.—

Where an assessee, being a resident company, paid any sum as licence fees for the purpose of obtaining a permission from any authority authorized by the government applicable for two or more years to run a business, the assessee shall be allowed a deduction of an amount proportionate to such years and such deduction shall continue till the last year of the period for which the licence was granted.

3. Amortization of pre-commencement expenditure.—

The rate of amortization of pre-commencement shall be 20% (twenty percent).

4. Amortization of research and development expenditure.—

The rate of amortization of research and development expenditure shall be 10% (ten percent).

5. Amortization of computer software and applications.—

The rate of amortization of usable computer software and applications shall be allowed as follows, namely:—

(a) 20% (twenty percent) in respect of any software and applications developed in Bangladesh;

(b) 10% (ten percent) in respect of any software and applications from outside Bangladesh.

6. Amortization of inadmissible expenses.—

If any expenditure claimed by the assessee during an assessment under this Act is disallowed as capital in nature, the said expenditure of the assessee shall be allowed as amortization allowance at the rate of 10% (ten percent) in subsequent assessment years.

7. Explanation.—

(1) For the purposes of this Part,—

(a) “pre-commencement” expenditure shall mean all such expenditure incurred wholly and exclusively for the purpose of the business in the years prior to the year of commencement of commercial operations but not allowable under other provisions of the Third Schedule and shall include the cost of business feasibility study, model or prototype construction and trial production, but shall in no case exceed the actual cost and shall not be allowed again if previously allowed in any way;

(b) “research and development expenditure” means research and development expenditure as defined in clause 33 of section 2; and

(c) “Licence Fee” means spectrum assignment fee paid by a cellular mobile phone operator or any other license fee paid as an integral part of the activities of a company engaged in providing specialized services.