Deduction of tax on savings deposits and fixed deposits, etc under Section 102 | Bangladesh Income Tax Act -2023

Deduction of Tax on Savings Deposits and Fixed Deposits under Section 102 of the Bangladesh Income Tax Act, 2023—explaining tax deduction at source (TDS) on deposit interest, applicable rates, exemptions, and compliance requirements

 

 Deduction of tax on savings deposits and fixed deposits, etc under Section 102 | Bangladesh Income Tax Act -2023

As per section-102(ITA-2023), 

Deduction of tax on savings deposits and fixed deposits, etc.—1[(1) Notwithstanding anything contained in this Act or any other law for the time being in force in Bangladesh, any person engaged in the operation of banking, insurance, leasing, financing, postal banking, co-operative or mobile financial services, or any person responsible for paying any sum by way of interest or share of profit on deposit to a resident shall deduct, at the time of credit of such interest or share of profit to the account of the payee or at the time of payment thereof, whichever is earlier, tax on such sum at the rate mentioned in the following table and deposit it to the Government treasury, namely:—

Table

Serial. No.	Types of the payee	Rate
(1)	(2)	(3)
1.	In case of a trust, association of persons and company	20% (twenty percent)
2.	In case of a primary educational institution, Institute of Chartered Accountants, Institute of Cost and Management Accountants or Institute of Chartered Secretaries	10% (ten percent)
3.	In case of persons not mentioned in serial no. 1 and 2	10% (ten percent)]

 

(2) Nothing contained in this section shall apply—

(a) to interest or share of profit arising out of any deposit pension scheme sponsored by the Government or by a Scheduled Bank with prior approval of the Government; or (b) to such payee or class of payees as the Board may, by a general or special order, specify that income of such payee or class of payee is otherwise exempted from tax. (3) For the purposes of this section, the proof of submission of return of legal guardian of a minor shall be considered as the proof of submission of return of the minor.

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Frequently Asked Question (FAQ):

1. What is the deduction of tax on savings deposits and fixed deposits under Section 102?

Answer:
Section 102 of the Bangladesh Income Tax Act 2023 requires tax to be deducted at source from interest earned on eligible savings deposits, fixed deposits (FDRs), and similar financial instruments at the prescribed rate before the interest is paid or credited.

2. Who is responsible for deducting tax under Section 102?

Answer:
Banks, financial institutions, cooperative banks, and other authorized deposit-taking institutions are responsible for deducting tax from applicable interest payments under Section 102 before paying the depositor.

3. Is tax deducted on all savings and fixed deposit interest?

Answer:
No. Tax deduction depends on the applicable provisions, exemptions, thresholds, and tax rates specified in the Bangladesh Income Tax Act 2023 and any relevant government notifications.

4. Can taxpayers claim credit for tax deducted under Section 102?

Answer:
Yes. Tax deducted at source under Section 102 can generally be claimed as a tax credit when filing an income tax return, subject to the provisions of the Bangladesh Income Tax Act 2023.