Tax

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

July 14, 2017
TDS rates image

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.

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4 Comments

  • Reply Tareq July 14, 2017 at 10:03 PM

    Thanks a lot vai .

    • Reply shishir Rajbangshi April 18, 2018 at 11:35 AM

      Great to know….its a inspiration

  • Reply Tapas Mondal December 14, 2017 at 11:20 AM

    Can you please provide pfa file for above mentioned details.

  • Reply erfanul Haue April 24, 2018 at 12:51 PM

    May you describe the process/computation of TDS?
    Example – BDT.100/- bill amount, including 10% tax.

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