Government to Refund Excess Withholding Tax on Savings Certificates Below BDT 500,000

Feb 05, 2026
Business

Symbolic Image: Savings Certificates (Collected)

Staff Report: PNN:

In Bangladesh, investors who accumulated up to BDT 500,000 in savings certificates were erroneously charged excess withholding tax. In December and January, 10% tax was deducted instead of the prescribed 5%, prompting dissatisfaction among investors. The government has now taken steps to refund the excess tax.

According to the Internal Resources Division (IRD) of the Ministry of Finance, profits from investments up to BDT 500,000 in savings certificates are subject to 5% withholding tax. Pension savings below BDT 500,000 are exempt from tax. Investments above BDT 500,000 are subject to 10% tax. However, without any new notification, 10% tax had been applied since December for investments below BDT 500,000, causing some investors to receive BDT 100–150 less profit.

The IRD stated that at least 1.45 million people have invested less than BDT 500,000. Considering 1 million investors, nearly BDT 25 crore was deducted as excess tax over two months. Following this, NBR Chairman Abdur Rahman Khan told Prothom Alo that steps are being taken to resolve the issue. For investments under BDT 500,000, the withholding tax will again be set at 5%.

The Director General of the National Savings Directorate, Roushan Ara Begum, has been instructed to follow the 2019 notification, exempting profits below BDT 500,000 from tax. According to Section 105 of the 2023 Income Tax Act, profits from investments above BDT 500,000 are taxed at 10%. The NBR stated that excess tax refunds can be applied for online with necessary proof. Until a new notification is issued, this regulation will remain effective, and customers will receive refunds.