The National Board of Revenue (NBR) has clarified that the tax at source on profit from savings certificates up to BDT 500,000 is 5 percent, not 10 percent. The clarification was issued on Tuesday in a letter sent to the Director General of the National Savings Directorate.

The letter also confirmed that, as before, no tax at source will be applied to profits from pension savings certificates up to BDT 500,000.

Since January, some savings certificate holders had complained that a 10 percent tax at source was being deducted on profits up to BDT 500,000, causing dissatisfaction among investors. After receiving these complaints, NBR issued the clarification today.

NBR’s Explanation:

• According to the 2019 notification, if the total investment in all savings certificates does not exceed BDT 500,000 in a financial year, the tax at source on the earned profit will be 5 percent.

• If an individual’s cumulative investment in pension savings certificates alone does not exceed BDT 500,000 in a financial year, the tax at source on the profit will be 0 percent—meaning no tax will be deducted.

• Under Section 105 of the Income Tax Act 2023, if the total investment across all types of savings certificates exceeds BDT 500,000 in a year, the tax at source on profit will be 10 percent.

Types of Savings Certificates:
Currently, the National Savings Directorate offers four types of certificates:

1. Family Savings Certificate

2. Pension Savings Certificate

3. Five-Year Bangladesh Savings Certificate

4. Three-Month Profit-Based Savings Certificate

All certificates except the Family Savings Certificate allow investment by both individuals and institutions.