Tax will not be deducted at source on the profit on Family Savings Instrument and Pensioner Savings Instrument purchased before June 30, the Internal Resource Division (IRD) said in a statement yesterday.
IRD will issue a circular to Bangladesh Bank, commercial banks and the office of the Savings Directorate next week, it added.
In the current fiscal year, the rate of interest on all savings instruments has been increased. Tax at source has also been lowered to 5 percent from an earlier rate of 10 percent.
However, no tax has been deducted on the profit of the two savings instruments in the past.
But many banks have been charging 5 percent on profits of the two savings instruments maturing after July 1.
A finance ministry official said they are going to issue a new circular prohibiting deduction of tax on the savings instruments purchased before July 1.
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