1. Separate account of profits earned from exploration and extraction of mineral reserves.-

The account of profits and gains earned by a person by conducting business related to exploration or extraction of non-renewable mineral reserves other than petroleum in Bangladesh shall be accounted separately from the income, profits or gains earned from his other businesses; and the said business shall, for the purposes of this section, be treated as a separate enterprise, hereinafter referred to in this Part as the said enterprise.

2. Calculation of profits.-

(1) The profits and gains of the said establishment shall, subject to the provisions of this Part, be calculated in accordance with the provisions of sections 49-53.

(2) The money spent by the said organization for the exploration of mineral resources up to the stage of commercial production shall be treated as a loss, unless it is possible to adjust it against the other income of the said organization in accordance with section 70.

(3) The loss calculated in the manner mentioned in sub-section (2) shall be adjusted against the income of the said establishment after commencement of commercial production if it is not possible to completely adjust the loss of the company against its earned income, profit or gain in the income year of the commencement of commercial production, the part that is not possible to be adjusted will have to be adjusted accordingly in the next income year and the adjustment will continue in phases; any loss shall be adjusted up to a maximum of 10 (ten) years from the income year of commencement of commercial production.

(4) Notwithstanding anything contained in paragraphs 4 and 5 of Part 1 of the Third Schedule, profits and gains on machinery and plant purchased or acquired for the extraction of mineral ores, after commencement of commercial production, in the year in which the same is first used, on the contrary, depreciation allowance shall be allowed at the rate equal to the actual cost of such asset; where it is not possible to allow such allowance in full due to non-earning of profit or profit in any year or the profit or gain being less than the depreciation allowance, in that case the said unclaimed depreciation allowance or part thereof shall be added to the depreciation allowance of the subsequent year and in subsequent years also in the same manner, continued:

Provided that where any loss under sub-section (3) is to be carried forward the said penalty adjustment shall be made before carried forward.

3. Depletion Allowance.-

(1) In calculating the profits and gains of the said establishment in any year, an additional expenditure, hereinafter referred to in this section as depletion allowance, shall be allowed which is 15% (fifteen percent) of the gross income of the establishment, (before deducting such allowance). or 50% (fifty percent) of the invested capital of the said institution (for the purposes of this clause, calculating such capital in accordance with provisions made by the Board), whichever is less.

(2) No depletion allowance shall be allowed under sub-section (1) unless an amount equal to the depletion allowance is set aside as profit and loss of the said institution in the relevant income year and deposited in a fund reserved for the purpose of development and expansion of the said institution.

(3) Where a depletion allowance is allowed in any year, and the said amount is subsequently used for any purpose other than that specified in sub-section (2), the amount of expenditure allowed as such benefit shall be deemed to have been allowed in ertor and notwithstanding anything contained in this Act, the Deputy Commissioner of Taxes may recalculate the total income of the taxpayer in the relevant income year and the provisions of sections 212 and 197 shall apply in that case as far as possible and in the year in which the said amount has been utilized the period prescribed in section 197 shall be calculated from the date of completion of that income year.

4. Exemption from tax on profits arising from refining or concentrating mineral resources.

(1) Where the said company refines or concentrates minerals extracted from Bangladesh in Bangladesh, such profits and gains not exceeding 5% (five percent) of the capital invested in such business will be exempted from income tax; and for the purposes of this section, the capital invested in such business shall be accounted for in accordance with rules made by the Board.

(2) Where the profits and gains of such business are so computed in any tax year, the period of which is less than or more than 1 (one) year, the amount of the profits and gains exempted from tax under sub-section (1) shall be in respect of the period of 1 (one) year proportionate to the amount of profit and gain stated for the period.

(3) he profits and gains of the business to which this section applies shall be calculated in accordance with the provisions of Chapter V of Part 5.

(4) The provisions of this clause shall be a full adjustment of any loss under sub-section (3) of section 2 or any allowance allowed under subsection (4) of section 2 in the assessment of tax for the year subsequent to the income year in which commercial production commenced. or in the case of deduction, whichever occurs later, and shall apply to the assessment of tax for the next 4 (four) years.