BD cuts source tax on savings certificates for small investors

The government has reduced the tax deducted at source (TDS) on profits from savings certificates, or Sanchaypatra, to 5 per cent from 10 per cent for investments of up to Tk 0.5 million, officials said.
The National Board of Revenue (NBR) issued a clarification following complaints from investors who alleged that banks and savings offices were incorrectly deducting 10 per cent tax on profits from smaller investments, reports UNB.
According to the NBR, the reduced tax rate applies when an individual's total investment across all types of savings certificates does not exceed Tk 0.5 million.

For investments above this threshold, a 10 per cent TDS will remain applicable, under Section 105 of the Income Tax Act 2023.
The Department of National Savings also confirmed that rules for Pensioner Savings Certificates remain unchanged. Investments in this scheme of up to Tk 0.5 million continue to enjoy a zero percent tax rate.
The Department of National Savings currently offers four primary schemes: Family Savings Certificate (Paribar Sanchaypatra), Pensioner Savings Certificate, 5-Year Bangladesh Savings Certificate, and Three-Month Profit-Based Savings Certificate.
Institutional investment is permitted in all schemes except the Family Savings Certificate.
Officials said the clarification is expected to provide 'significant relief' to small savers and retirees who depend on monthly or quarterly returns from these government-backed instruments for their livelihoods.