Regulatory Alerts2026-08-10
Added · Updated
BRPD-1 Circular Letter No. 27: Deduction of source tax at the applicable rate on interest/profit paid on deposits in accordance with the Income Tax Act, 2023 and timely deposit thereof into the Government Treasury
The Bangladesh Bank directs all scheduled banks operating in Bangladesh to strictly adhere to the Income Tax Act, 2023 and the Withholding Tax Rules, 2023 regarding the deduction of source tax on interest or profit paid on deposits. Banks must apply the correct withholding tax rates based on the recipient's category and impose a 50% higher rate if taxpayers fail to submit valid tax return proof. Additionally, banks are required to deposit withheld amounts into the Government Treasury within specific timeframes—within two weeks of the month's end for collections between July and May, within seven days for collections between June 1-20, and on the following day for other June collections—and must maintain proper records and submit necessary reports to the competent authority.
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