Tax relief for marginal FD holders
The government has imposed 10pc tax at source on interest income for the twelve digit TIN holders and 15pc tax at source for non TIN holders from last financial year. Before that 10pc tax at source was imposed. Bank and other financial institutions have drastically reduced interest on deposits in recent years. In most cases, the rate of interest is below 10pc, which was above 10pc a few years back. In Bangladesh, we are experiencing 7pc to 8ps inflation in recent years.
That is when the rate of inflation is deducted from interest income in real term a depositor gets negligible income from fixed deposits. In Bangladesh, there are a good number of small marginal depositors who live on their small fixed deposits in bank or financial institutions. In such a low interest bearing situation it become difficult to live on deposit bearing income. Government can help them by withdrawing tax at source on up to Taka one million fixed deposit.
Md. Ashraf Hossain
Dhaka.
