DMD Circular No. 04: Deducting Source Tax from Pensioner Sanchayapatra and Wage Earners Development Bond

Department of Management and Development (Prize Bond, Sanchayapatra and Savings Bond Division) Circular No. DMD-04/2014

Date: 08/07/2014

To: Director/General Manager Bangladesh Bank Motijheel, Dhaka/Chittagong/Khulna/Rajshahi/Bogura/Sylhet/Barisal/Rangpur/Mymensingh/Sadarghat, Dhaka. Managing Director/Chief Executive All Scheduled Banks of Bangladesh.

Dear Sir,

Regarding the deduction of source tax on Pensioner Sanchayapatra and Wage Earners Development Bond.

You are hereby informed that, through the Budget Programme 2014, Section 52 of the Income Tax Ordinance, 1984 has been amended. Accordingly, interest income from investments up to 500,000 BDT in Pensioner Sanchayapatra and Wage Earners Development Bond is exempt from tax, and a 5% source tax rate is maintained for interest on investments exceeding 500,000 BDT, as before. The tax deducted at source shall be considered as final tax for the taxpayer. Furthermore, in the case of other Savings Bonds, the existing provision for imposing tax at the 5% rate and the general rate of tax imposition shall remain in force.

2. The aforementioned rules shall come into effect from 01/07/2014 AD. That is, these rules shall apply to Pensioner Sanchayapatra and Wage Earners Development Bond purchased on or after July 1, 2014.

3. You are advised to issue instructions to your own office counters as well as branch offices to duly comply with the aforementioned instructions.

Yours faithfully,

(Bishnu Pad Sah) General Manager Phone: 9530131