Tax at source from income of two saving tools withdrawn
Thursday, 1 July 2010
Doulot Akter Mala
The government has withdrawn tax at source from income of two saving tools while the interest income from other saving tools will be subjected to a 10 per cent tax.
The Finance Act-2010 has waived the tax from pensioner's saving certificate and the newly launched family saving certificate.
The government has withdrawn the tax-free ceiling of Tk 1,50,000 from interest amount of the saving tools.
Investors of the other saving instruments will have to pay tax at source at the rate of 10 per cent on interest amount from July 1, 2010.
An official of National Board of Revenue (NBR) said they have imposed the tax on interest amount of saving tools after they found poor collection of advance tax despite huge investment in saving tools.
"We have found the slide in revenue income from this sector after introduction of the tax-free ceiling on saving tools," said the NBR official.
The taxmen suspect that a number of people have invested in saving tools in different names of their near and dear ones to avoid tax payment, he said.
The government launched the family saving certificate last week for women in a bid to ensuring a secured investment for women.
The finance ministry has cut interest rate of the saving tools by 0.50 per cent as per recommendation of a committee.
The national saving certificates offer highest rate of interest at 12.0 per cent while it is less than 9.0 per cent in banking system.
The government considers the saving certificates as a social safety net for country's deprived section and small investors as state support is constrained due to fund crunch.
The government's borrowing from saving instruments increased by 313.21 per cent in the first six months of the 2009-10 fiscal while it dropped by 22 per cent from banking system.
There are seven kinds of investment tools under the National Saving Directorate (NDS). Five-year saving certificate offers highest 12 per cent interest while three-month term deposit offers 11.50 per cent, pensioners and family saving certificates 12 per cent, post office investment bank 7.50 per cent, three-year certificate 8.50 per cent and US dollar investment bond 6.5 per cent.
The government has withdrawn tax at source from income of two saving tools while the interest income from other saving tools will be subjected to a 10 per cent tax.
The Finance Act-2010 has waived the tax from pensioner's saving certificate and the newly launched family saving certificate.
The government has withdrawn the tax-free ceiling of Tk 1,50,000 from interest amount of the saving tools.
Investors of the other saving instruments will have to pay tax at source at the rate of 10 per cent on interest amount from July 1, 2010.
An official of National Board of Revenue (NBR) said they have imposed the tax on interest amount of saving tools after they found poor collection of advance tax despite huge investment in saving tools.
"We have found the slide in revenue income from this sector after introduction of the tax-free ceiling on saving tools," said the NBR official.
The taxmen suspect that a number of people have invested in saving tools in different names of their near and dear ones to avoid tax payment, he said.
The government launched the family saving certificate last week for women in a bid to ensuring a secured investment for women.
The finance ministry has cut interest rate of the saving tools by 0.50 per cent as per recommendation of a committee.
The national saving certificates offer highest rate of interest at 12.0 per cent while it is less than 9.0 per cent in banking system.
The government considers the saving certificates as a social safety net for country's deprived section and small investors as state support is constrained due to fund crunch.
The government's borrowing from saving instruments increased by 313.21 per cent in the first six months of the 2009-10 fiscal while it dropped by 22 per cent from banking system.
There are seven kinds of investment tools under the National Saving Directorate (NDS). Five-year saving certificate offers highest 12 per cent interest while three-month term deposit offers 11.50 per cent, pensioners and family saving certificates 12 per cent, post office investment bank 7.50 per cent, three-year certificate 8.50 per cent and US dollar investment bond 6.5 per cent.