TDS rates with section references in income tax of Bangladesh for 2017-18

Are you working as an accountant or auditor in a corporate house?

Salient features of income tax for the year 2018-19 may help you to understand the major changes by the Finance Act 2018.

Every day you have to disburse cheque to customers. And you require to deduct tax at source. But sometimes you couldn’t recall the TDS rates?

You are not alone.

Most of the people who work in a position like you have the same experience.

Guess you are not going to seat for taxation exam under ICAB.

You keep confidence that you don’t require to memories the full list of deduction or collection rates.

Just print out this article and hang the list in front of your desk.

You will get the rates whenever you will require.

But what will do a CA student?

When I was a student in Knowledge Level we asked to write any 10 TDS rates with section references in November-December session exam.

We all knew that after passing of finance act the changes in TDS rates may be appeared in exam question.

So I was preparing myself for the upcoming exam.

But you know that there is a long list and very hard to memories within very short period.

If you only try to memories the full list it will be very difficult for you and there is a chance that you may forget any of the rates.

So now what is the easy way to remember the rates?

Yes, I will share my own experience when I was a student like you.

I had printed the full list of TDS rates and kept it in my bag.

You know who are generally junior carry the bag where required to carry audit related materials like calculator, pen, pencil, highlighter, roller, eraser etc.

When senior required the above materials as a junior I had to provide these.

I guess you also have the same experience.

Besides this, I had to carry bag with me to carry my study materials to read when I was stuck in the traffic jam.

And also I had to carry bag during my coaching class in ICAB academic campus.

During my audit work, I had to check the compliance of tax deducted or collected at source as per specified rate in the income tax of Bangladesh.

Whenever I couldn’t remember the rate I find out the TDS list and check the rate.

All the period during my audit work in knowledge level I had followed the process and I don’t require to memories the full TDS rates.

Day after day I had done that practice and the rates with section had fixed in my memory.

So if you think this is the easy way you may also follow the method.

Or you may save the environment.

I was not as lucky as now you are!

The internet and Smartphone was not so available in 6 years back.

Now everyone has internet connection and Smartphone in your hand.

So you can easily save the link or like my facebook page www.facebook.com/jasimraselpresents from where you can easily check out not only the TDS rates but also all daily necessary materials related with income tax of Bangladesh.

In my last article ‘Salient features of income tax of Bangladesh in 2017-18‘ I had promised to publish full list of TDS rates and I hope the following TDS list will be helpful in your daily financial routine work.

I have cross checked the rates and references but though if any mistakes happened unintentionally then please notify me to correct the particular item or if you require further clarifications then requested to follow income tax law of Bangladesh.

If you are from Smartphone then please rotate your mobile screen during go through the following TDS rates table for more readability mode.

SI	Heads	Ref	Rate
1	Salaries	Section 50	Average
	Salaries (Government)	Section 50 (1A)	Average
2	Discount on the real value of Bangladesh Bank Bills	Section 50A	Maximum
3	Interest or profit on securities	Section 51	5%
4	(a) Execution of contract, other than a contract for providing or rendering a service mentioned in any other section of Chapter VII. (b) Supply of goods; (c)Manufacture, process or conversion; (d) Printing, packaging or binding	Section 52 & Rule 16	Annexure 1
5	Royalties, franchise, fee for issuing license, brand name, patent, invention, formula, process, method, design, pattern, know-how, copyright, trademark, trade name, literary or musical or artistic composition, survey, study, forecast, estimate, customer list or any other intangibles	Section52A	Annexure 2
6	(1) Advisory or consultancy service (2) Professional service, Technical services fee, Technical assistance fee. (excluding professional services by doctors)	Section 52AA	Annexure 3
	(2) Professional service (by doctors)	Section 52AA	Annexure 3
	3. (i) Catering service; (ii) Cleaning service; (iii) Collection and recovery service; (iv) Private security service; (v) Manpower supply service; (vi) Creative media service; (vii) Public relations service; (viii) Event management service; (ix) Training, workshop, etc. organization and management service; (x) any other service of similar nature (4) Media buying agency service (5) Indenting commission (6) Meeting fees, training fees or honorarium (8) Credit rating agency (9) Motor garage or workshop (10) Private container port or dockyard service (11) Shipping agency commission (12) Stevedoring /berth operation commission (13) Transport service, carrying service, vehicle rental service (14) Any other service which is not mentioned in Chapter VII, and is not a service provided by any bank, insurance or financial institutions	Section 52AA	Annexure 3
	(7) Mobile network operator, technical support service provider or service delivery agents engaged in mobile banking operations	Section 52AA	Annexure 3
7	C&F agency commission	Section 52AAA	10%
8	Manufacturer of nonmechanical cigarette (Bidi)	Section 52B	10% of the value of banderols
9	Compensation against acquisition of property	Section 52C	(a) 2% of the amount of such compensation against the immovable property situated within a city corporation, paurashava or cantonment board(b)1% of the amount of such compensation against the immovable property situated outside the jurisdiction of a city corporation, paurashava or cantonment board
10	Interest on saving instruments	Section 52D	5% (No witholding tax on interest on pensioners savings certificate if cumulative investment in such certificate at the end of the income year does not exceed tk. 5 lakh)
11	Payment to a beneficiary of Workers’ Participation Fund	Section 52DD	5%
12	Brick Manufacturer	Section 52F	Tk.45,000/-for one section brickfield, Tk.70,000/-for one and half section brickfield, Tk.90,000/-for two section brick field, Tk.1,50,000/-for automatic brickfield
13	Commission of letter of credit	Section 52I	5%
14	Travel agent	Section 52JJ	Annexure 4
15	Renewal of trade license by City Corporation or Paurashava	Section 52K	Tk.500/-for Dhaka North City Corporation, Dhaka South City Corporation & Chittagong City Corporation; Tk.300 for anyother city corporation, and any paurashava of any district headquarters;Tk.100 in any other paurashava
16	Freight forward agency commission	Section 52M	15%
17	Rental power	Section 52N	6%
18	Foreign technician serving in diamond cutting	Section 52O	5%
19	Services from convention hall, conference centre etc.	Section 52P	5%
20	Any income in connection with any service provided to any foreign person by a resident person	Section 52Q	10%
21	International gateway service in respect of phone call.	Section 52R	(1)1.5%of total revenue received by IGW services operator.(2) 7.5% of revenue paid or credited to ICX,ANS and others(2A) 7.5% on the whole amount so paid or credited at the time of payment or credit
22	Manufacturer of soft drink, etc	Section 52S	4% of the value of such soft drinks or mineral or bottled water as determined for the purpose of Value Added Tax (VAT)
23	Payment in excess of premium paid on life insurance policy	Section 52T	5%
24	Payment on account of purchase through local L/C	Section 52U	3% (If purchase of goods through local L/C exceeds taka 5 lakh) No tax shall be deducted under this section from the payment related to local letter of credit (L/C) and any other financing agreement in respect of purchase or procurement of rice, wheat, potato, onion, garlic, peas, chickpeas, lentils, ginger, turmeric, dried chilies, pulses, maize, coarse flour, flour, salt, edible oil, sugar, black pepper, cinnamon, cardamom, clove, date, cassia leaf, computer or computer accessories, jute, cotton, yarn and all kinds of fruits
25	Payment of fees, revenue sharing etc. by cellular mobile phone operator	Section 52V	10%
26	Import	Section 53 & Rule 17A	(a) 5% (general rate) (b) 2% on certain imported goods (c)Tk.800 per ton in case of import of certain items
27	House property	Section 53A	5% of the gross rent
28	Shipping business of a resident	Section 53AA	5% of total freight received or receivable in or out of Bangladesh 3% of total freight received or receivable from services rendered between two or more foreign countries
29	Export of manpower	Section 53B & Rule 17C	10%
30	Export of knit wear and woven garments, terry towel, carton and accessories of garments industry, jute goods, frozen food, vegetables, leather goods ,packed food	Section 53BB	1% of the total export proceeds of all goods (other than jute goods)0.60%of the total export proceeds of jute goods
31	Member of Stock Exchanges	Section 53BBB	0.05%
32	Export of any goods except the goods mentioned in section 53BB	Section 53BBBB	1% of the total export proceeds of all goods except the goods mentioned in section-53BB
33	Goods or property sold by public auction	Section 53C & Rule 17D	5% of sale price
34	Courier business of a non-resident	Section 53CCC	15% on the amount of service charge
35	Payment to actors, actresses, producers, etc	Section 53D	(a)10% on the payment in case of purchase of film, drama, any kind of television or radio program(b)10% on the payment to actor/actress(If the total payment exceedTk.10,000)
36	Export cash subsidy	Section 53DDD	3%
37	Commission, discount or fees	Section 53E(1) and (2)	Annexure 5
38	Commission, discount or fees	Section 53E(3)	Annexure 5
39	Commission or remuneration paid to agent of foreign buyer	Section 53EE	10%
40	Interest or share of profit on saving deposits and fixed deposits etc	Section53F(1)	10% if there is TIN; 15% if there is no TIN (not applicable if the balance does not exceed tk. 1 lakh at any time in the year in case of saving deposit) (not applicable on the amount of interest or share of profit arising out of any deposit pension scheme sponsored by the Government or by a schedule bank with prior approval of the Government)
	Interest or share of profit on any saving deposits or fixed deposits or any term deposit by or in the name of a fund	Section 53F(2)	5% (Annexure 6)
41	Real estate or land development business	Section 53FF	See annexure 7 in case of Building or apartment In case of Land: (i)5% for Dhaka, Gazipur, Narayanganj, Munshigang, Manikganj, Narshindi & Chittagong district;(ii) 3% for any other district
42	Insurance commission	Section 53G	5%
43	Fees of survey or so for general insurance company	Section 53GG	15%
44	Transfer of property	Section 53H	As mentioned in section 53H
45	Collection of Tax from lease of property	Section 53HH	4%
46	Interest on deposit of post office Saving bank account	Section 53I	10%
47	Rental value of vacant land or plant or machinery	Section 53J	5%of the rent
48	Advertisement of newspaper or magazine or private television channel or private radio station or any web site or any person on account of advertisement or purchasing airtime of private television channel or radio station or such website.	Section 53K	4%
49	Transfer of shares by the sponsor shareholders of accompany listed with stock exchange	Section 53M	5%
50	Transfer of shares of any Stock Exchange	Section 53N	15% on gain
51	Any sum paid by real estate developer to land owner	Section 53P	15%
52	Dividends	Section 54	Resident/nonresident Bangladeshi company —- 20% Resident/nonresident Bangladeshi person other than company -If TIN, 10% -If No TIN, 15%
53	Income from lottery	Section 55	20%
54	Income of non-residents (Section 56): (1) Advisory or consultancy service (2) Pre-shipment inspection service (3) Professional service, technical services, technical know-how or technical assistance (4) Architecture, interior design or landscape design, fashion design or process design (5) Certification, rating etc. (6) Charge or rent for satellite, airtime or frequency, rent for channel broadcast (7) Legal service (8) Management service including event management (9) Commission (10) Royalty, license fee or payments related to intangibles (11) Interest (12) Advertisement broadcasting (13)Advertisement making or Digital marketing (14) Air transport or water transport (15) Contractor or sub-contractor of manufacturing, process or conversion, civil work, construction, engineering or works of similar nature (16) Supplier (17) Capital gain (18) Insurance premium (19)Rental of machinery, equipment etc. (20) Dividend (21) Artist, singer or player (22) Salary or remuneration (23) Exploration or drilling in petroleum operations (24) Survey for oil or gas exploration (25) Any service for making connectivity between oil or gas field and its export point (26) Any payments against any services not mentioned above	Section 56	Annexure 8
	(27) Any other payments under section 56	Section 56	30%
55	Advance tax for private motor car	Section 68B	Annexure 9

Annexure 1: Rate of deduction under section 52

(a) subject to clause (b), in case of a payment made sub-section (1) of section 52, the deduction on payment shall be at the following rate:

SI	Amount	Rate
1	Where base amount does not exceed BDT 15 lakh	2%
2	Where base amount exceeds BDT 15 lakh but does not exceed BDT 25 lakh	3%
3	Where base amount exceeds BDT 25 lakh but does not exceed BDT 1 crore	4%
4	Where base amount exceeds BDT 1 crore but does not exceed BDT 5 crore	5%
5	Where base amount exceeds BDT 5 crore but does not exceed BDT 10 crore	6%
6	Where base amount exceeds BDT 10 core	7%

(b) the rate of deduction from the following classes of persons shall be at the following rate:

1	In case of oil supplied by oil marketing companies- (a) Where the payment does not exceed taka 2 lakhb) Where the payment exceeds taka 2 lakh	Nil 0.60%
2	In case of oil supplied by dealer or agent (excluding petrol pump station) of oil marketing companies, on any amount	1%
3	In case of supply of oil by any company engaged in oil refinery, on any amount	3%
4	In case of company engaged in gas transmission, on any amount	3%
5	In case of company engaged in gas distribution, on any amount	3%

Annexure 2: Rate of deduction under section 52A

Description of payment	Rate
Where base amount does not exceed taka 25 lakh	10%
Where base amount exceeds taka 25 lakh	12%

Annexure 3: Rate of deduction from the payment of certain services under section 52AA

SI	Description of service and payment	Rate
		Where base amount does not exceed Tk. 25 lakh	Where base amount exceeds Tk. 25 lakh
1	Advisory or consultancy service	10%	12%
2	Professional service, technical services fee, or technical assistance fee	10%	12%
3	(i) Catering service; (ii) Cleaning service; (iii) Collection and recovery service; (iv) Private security service; (v) Manpower supply service; (vi) Creative media service; (vii) Public relations service; (viii) Event management service; (ix) Training, workshop, etc. organization and management service; (x) any other service of similar nature- (a) on commission or fee (b) on gross bill amount	10% 1.5%	12% 2%
4	Media buying agency service (a) on commission or fee (b) on gross bill amount	10% 0.5%	12% 0.65%
5	Indenting commission	6%	8%
6	Meeting fees, training fees or honorarium	10%	12%
7	Mobile network operator, technical support service provider or service delivery agents engaged in mobile banking operations	10%	12%
8	Credit rating service	10%	12%
9	Motor garage or workshop	6%	8%
10	Private container port or dockyard service	6%	8%
11	Shipping agency commission	6%	8%
12	Stevedoring/berth operation commission	10%	12%
13	Transport service, carrying service, vehicle rental service	3%	4%
14	Any other service which is not mentioned in Chapter VII of this Ordinance and is not a service provided by any bank, insurance or financial institutions	10%	12%

Annexure 4: Rate of deduction from income of non-residents under section 52JJ

Any person responsible for making any payment to a resident any sum by way of commission or discount or any other benefits, called by whatever name, convertible into money for selling passenger tickets or air cargo carriage shall deduct or collect advance tax at the rate of zero point three zero percent (0.30%) of the total value of the tickets or any charge for carrying cargo by air at the time of payment to such resident.

Where any incentive bonus, performance bonus or any other benefits, called by whatever name, is to be paid in relation to such sale of tickets or bill for carrying cargo by air in addition to the amount mentioned in sub-section (1), person responsible for making such payment shall deduct an amount equal to (A/B) x C, where:

“A” is the amount of incentive bonus, performance bonus or any other benefits as mentioned in sub-section (2),

“B” is the amount of commission or discount or any other benefits as mentioned in subsection (1), and

“C” is the amount of source tax on commission or discount or any other benefits as mentioned in sub-section (1).

For the purpose of computation of value of tickets or charge, any payment made in respect of any embarkation fees, travel tax, flight safety insurance, security tax and airport tax shall not be included in such value or charge.

“payment” includes a transfer, a credit or an adjustment of payment.

Annexure 5: Rate of deduction from income of non-residents under section 53E

(1) Any company making a payment or allowing an amount to a distributor, called by whatever name, or to any other person by way of commission, discount, fees, incentive or performance bonus or any other performance related incentive or any other payment or benefit of the similar nature for distribution or marketing of goods, shall deduct or collect tax at the time of payment or allowing the amount at the rate of ten percent (10%) of the amount of payment or the amount allowed or the value of benefits allowed, as the case may be.

(2) Any company making a payment in relation to the promotion of the company or its goods to any person engaged in the distribution or marketing of the goods of the company shall, at the time of payment, deduct tax at the rate of one point five percent (1.5%) of the payment.

(3) Any company, other than an oil marketing company, which sells goods to:
(a) any distributor, or
(b) any other person under a contract,

at a price lower than the retail price fixed by such company, shall collect tax from such distributor or such any other person at the rate of five percent (5%) on the amount equal to B x C,

where B = the selling price of the company to the distributor or the other person;
C = 5%:

Provided that a cigarette manufacturer company shall collect tax at the time of sale of its goods to such distributor or to such other person at the rate of three percent (3%) of the difference between the sale price to the distributor or the other person and the retail price fixed by such company.

(4) In this section:
(a) “payment” includes a transfer, credit or an adjustment of payment;
(b) “contract” includes an agreement or arrangement, whether written or not.

Annexure 6: Rate of deduction from income of non-residents under section 53F (2)

TDS @ 5% is applicable on profit or share of profit.

The responsible person who will paid or credit, earlier one, profit or share of profit on savings deposit, fixed deposit or term deposit by Fund or Name in any schedule bank, cooperative bank, bank operated under Islami Shariah, non-banking finance institute, leasing company or house finance company shall deduct the tax at the above rate.

Fund means approved superannuation fund, pension fund, gratuity fund, recognized provident fund or workers’ participation fund which is created and operated by law has a legal identity and can operate separate bank account under law.

The above rate will be applicable from July 01, 2016.

However, the fund which was exempted from source tax shall enjoy the facility upto June 30, 2016.

Annexure 7: Rate of deduction from income of non-residents under section 53FF

1. a) in case of building or apartment constructed for residential purposes:

Area	Per square metre (BDT)
i) Gulshan Model Town, Banani, Baridhara, Matijheel C/A and Dilkusha C/A of Dhaka	1,600
ii) Dhanmondi R/A, DOHS, Mohakhali, Lalmatia Housing Society, Uttara Model Town, Bashundhara R/A, Dhaka Cantonment Area, Karwanbazar C/A of Dhaka and Panchlaish R/A, Khulshi R/A, Agrabad and Nasirabad of Chittagong	1,500
iii) Dhaka North City Corporation, Dhaka South City Corporation and Chittagong City Corporation other than areas mentioned in (i) and (ii)	1,000
iv) Other City Corporations than Dhaka North City Corporation, Dhaka South City Corporation and Chittagong City Corporation	700
v) in areas other than areas mentioned in the above (i), (ii), (iii) & (iv)	300

Source tax for residential apartment consisting below 70 sqm including common space will be 20% lower and below 60 sqm including common space will be 40% lower.

1. b) in case of building or apartment or any space constructed not for the residential purposes:

Area	Per square metre (BDT)
i) Gulshan Model Town, Banani, Baridhara, Matijheel C/A and Dilkusha C/A of Dhaka	6,500
ii) Dhanmondi R/A, DOHS, Mohakhali, Lalmatia Housing Society, Uttara Model Town, Bashundhara R/A, Dhaka Cantonment Area, Karwanbazar C/A of Dhaka and Panchlaish R/A, Khulshi R/A, Agrabad and Nasirabad of Chittagong	5,000
iii) Dhaka North City Corporation, Dhaka South City Corporation and Chittagong City Corporation other than areas mentioned in (i) and (ii)	3,500
iv) Other City Corporations than Dhaka North City Corporation, Dhaka South City Corporation and Chittagong City Corporation	2,500
v) in areas other than areas mentioned in the above (i), (ii), (iii) & (iv)	1,200

Annexure 8: Rate of deduction from income of non-residents under section 56

SI	Description of services or payments	Rate
1	Advisory or consultancy service	20%
2	Pre-shipment inspection service	20%
3	Professional service, technical services, technical know-how or technical assistance	20%
4	Architecture, interior design or landscape design, fashion design or process design	20%
5	Certification, rating etc.	20%
6	Charge or rent for satellite, airtime or frequency, rent for channel broadcast	20%
7	Legal service	20%
8	Management service including event management	20%
9	Commission	20%
10	Royalty, license fee or payments related to intangibles	20%
11	Interest	20%
12	Advertisement broadcasting	20%
13	Advertisement making or Digital marketing	15%
14	Air transport or water transport	7.5%
15	Contractor or sub-contractor of manufacturing, process or conversion, civil work, construction, engineering or works of similar nature	7.5%
16	Supplier	7.5%
17	Capital gain	15%
18	Insurance premium	10%
19	Rental of machinery, equipment etc.	15%
20	Dividend- (a) company– (b) any other person, not being a company–	20% 30%
21	Artist, singer or player	30%
22	Salary or remuneration	30%
23	Exploration or drilling in petroleum operations	5.25%
24	Survey for oil or gas exploration	5.25%
25	Any service for making connectivity between oil or gas field and its export point	5.25%
26	Any payments against any services not mentioned above	20%
27	Any other payments	30%

Annexure 9: Rate of advance tax under section 68B

SI	Types of car and engine capacity	BDT
1	Upto 1500cc motor car or jeep	15,000
2	More than 1500cc to 2000cc motor car or jeep	30,000
3	More than 2000cc to 2500cc motor car or jeep	50,000
4	More than 2500cc to 3000cc motor car or jeep	75,000
5	More than 3000cc to 3500cc motor car or jeep	100,000
6	Above 3500cc motor car or jeep	125,000
7	For each microbus	20,000

In case of more than one car or jeep solely or jointly owned by any person then the advance tax will be 50% higher for each next car or jeep.

The advance tax shall be paid at the time of registration or before expired date of fitness renewal.

The responsible authority who will issue the registration or fitness renewal certificate should confirm that the advance tax has been paid for respective motor car, jeep or microbus.

Where the fitness renewal is not required in each year then the advance tax shall be paid before the expired date of financial year. And the payment receipt of advance tax shall be submitted at the time of next renewal date.

The tax paid as advance shall be adjusted as credit but non refundable or will not adjusted in next income year.

If regular tax is less than advance tax then the advance tax shall be treated as minimum tax.