Govt to refund of excess tax deducted at source on savings certificates

The government has decided to refund the excess tax deducted at source from customers on savings certificates. This money may be refunded along with next month's profit, according to relevant sources.

Although 5 per cent tax at source was levied on profits from investments in savings certificates up to five lakh taka, 10 percent tax at source was suddenly deducted in January. Small investors in savings certificates expressed anger and disappointment over this.

On February 3, a letter was sent from the National Board of Revenue (NBR) to the National Savings Department clarifying that tax at source on the profit of investment in savings certificates up to five lakh taka will be deducted at 5 per cent- not 10 per cent.

Now, steps have been taken to refund the additional tax to the affected customers as the tax deducted on savings certificates is higher than the tax rate set by the government.

A source at the Internal Revenue Department said that 5 percent will be deducted at source for savings certificates up to five lakh taka. Those who had 10 percent deducted from their income tax in January instead of 5 percent will have their excess tax deducted at source refunded. The process is underway.

Director General of the Savings Department Dr. Rawshan Ara Begum said, "We have received the letter from the NBR. Everyone has been asked to take action in light of the NBR's letter."

Will the customers get the excess tax deducted at source refunded? When asked, he said, "I cannot say anything about this. It is the government's decision. 

"The Internal Revenue Department will decide on this matter. The Internal Revenue Department instructs us accordingly, and we work accordingly", she said.

The Bangladesh Bank made it mandatory to show proof of last year's income tax return for investment in savings certificate worth more than Tk5 lakh. In addition, income tax return documents were made mandatory to open account of more than Tk 5 lakh in Bangladesh Post Office Savings Bank.