The government has cut tax deducted at source on profits from savings certificates to 5 per cent from 10 per cent for investments of up to Tk5 lakh, following complaints over incorrect higher deductions.
The National Board of Revenue National Board of Revenue issued a clarification after investors alleged banks and savings offices were deducting 10 per cent tax on profits from smaller holdings.
The reduced rate applies when an individual’s cumulative investment across all types of savings certificates does not exceed Tk5 lakh, the NBR said.
For investments above that threshold, a 10 per cent tax will continue to apply under Section 105 of the Income Tax Act 2023, according to the clarification.
The Department of National Savings said rules for Pensioner Savings Certificates remain unchanged, with investments of up to Tk5 lakh continuing to attract zero tax.
The department offers four main schemes: Family Savings Certificate, Pensioner Savings Certificate, five-year Bangladesh Savings Certificate, and three-month profit-based Savings Certificate.
Institutional investment is allowed in all schemes except the Family Savings Certificate, officials said according to a report by UNB.
Officials said the clarification is expected to ease pressure on small savers and retirees who rely on regular returns from the government-backed instruments.
