Official order on savings tool tax deduction soon
Monday, 29 October 2007
Doulot Akter Mala
The National Board of Revenue (NBR) Sunday said the ordinance issued earlier to deduct 10 per cent tax at source on saving instruments income above Tk 25,000 will remain effective until issuance of a new ordinance.
After issuance of the revised ordinance, the board will readjust or refund the tax deducted up to Tk 150000 from interest income, said the NBR in a clarification issued Sunday.
The board has sent a letter of clarification to banks, financial institutions and the national saving directorate to remove widespread confusion over the issue.
The procedure for the issuance an official order raising the tax ceiling at source on saving tools would be finalised within a short period, sources said.
Promulgation of a new ordinance increasing the tax exemption level at source on the interest income from saving instruments is in a final stage now, the clarification said.
A gazette to this effect will be issued after receiving president's consent, a NBR source said.
In the Finance Bill 2007, the government had imposed 10 per cent tax deduction at source from the interest income amounting above Tk 25,000.
Later, the government amended the order increasing the ceiling of tax exemption up to Tk 150000. The order came into effect from July 1, 2007.
But, as the government is yet to issue the necessary official order in this connection small savers as well as banks are confused over the implementation of the procedure.
In the clarification, The NBR said: "The government will not deduct tax on the income of the saving instruments generated up to June 30, 2007."
So the amended rule, which is under process, is not relevant to the tax assessment for the current tax year.
Sources said the government, for the first time, changed the budgetary measure relating to income tax.
The National Board of Revenue (NBR) Sunday said the ordinance issued earlier to deduct 10 per cent tax at source on saving instruments income above Tk 25,000 will remain effective until issuance of a new ordinance.
After issuance of the revised ordinance, the board will readjust or refund the tax deducted up to Tk 150000 from interest income, said the NBR in a clarification issued Sunday.
The board has sent a letter of clarification to banks, financial institutions and the national saving directorate to remove widespread confusion over the issue.
The procedure for the issuance an official order raising the tax ceiling at source on saving tools would be finalised within a short period, sources said.
Promulgation of a new ordinance increasing the tax exemption level at source on the interest income from saving instruments is in a final stage now, the clarification said.
A gazette to this effect will be issued after receiving president's consent, a NBR source said.
In the Finance Bill 2007, the government had imposed 10 per cent tax deduction at source from the interest income amounting above Tk 25,000.
Later, the government amended the order increasing the ceiling of tax exemption up to Tk 150000. The order came into effect from July 1, 2007.
But, as the government is yet to issue the necessary official order in this connection small savers as well as banks are confused over the implementation of the procedure.
In the clarification, The NBR said: "The government will not deduct tax on the income of the saving instruments generated up to June 30, 2007."
So the amended rule, which is under process, is not relevant to the tax assessment for the current tax year.
Sources said the government, for the first time, changed the budgetary measure relating to income tax.