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Deduction of Tax from Any Payment in Excess of Premium Paid on Life Insurance Policy under Section 100 of the Bangladesh Income Tax Act, 2023 |
Deduction of tax from any payment in excess of premium paid on life insurance policy under Section 100 | Bangladesh Income Tax Act -2023
As per section-100(ITA-2023),
Deduction of Tax from Insurance Commission
Any person responsible for paying a resident any amount as remuneration or reward, whether in the form of commission or otherwise, for soliciting or procuring insurance business, including efforts to secure the continuance, renewal, or revival of insurance policies, shall deduct tax at the rate of 5% (five percent) on such amount.
The tax shall be deducted at the earlier of:
1. the time the amount is credited to the account of the payee; or
2. the time the amount is paid in cash, by cheque, draft, or through any other mode of payment.
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Frequently Asked Question (FAQ):
1. What is Section 100 of the Bangladesh Income Tax Act, 2023?
Section 100 requires tax deduction at source from any payment made under a life insurance policy that exceeds the total premium paid, subject to the provisions of the Bangladesh Income Tax Act, 2023.
2. When is tax deducted from a life insurance policy payment?
Tax is deducted when the amount paid to the policyholder exceeds the total premium paid under the life insurance policy, as specified in Section 100.
3. Who is responsible for deducting tax under Section 100?
The insurer or the person responsible for making the payment must deduct tax before paying the amount that exceeds the total premium paid.
4. Does every life insurance maturity payment attract tax deduction?
No. Tax deduction generally applies only to the portion of the payment that exceeds the total premium paid, unless another exemption or provision under the Bangladesh Income Tax Act, 2023, applies.