Tax

TDS rates with section references in income tax of Bangladesh for financial year 2019-20

July 2, 2019
TDS Rates

Do you know the updated TDS rates with section references?

Are you working in an accounts section and responsible for payment or collection of money? Then you have to know the updated TDS rates to deduct or collect tax at the time of payment or collection of money to comply with Income Tax Law of Bangladesh.

I have updated the list based on the Finance Act 2019. After submitting Finance Bill 2019 on 13 June 2019, I have also published salient features of Finance Bill 2019 in my last article in this website.

Guess, you are also searching for VAT rates and Supplementary Duty (SD) rates which I have also published in this blog.

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Anyway, there are few changes in the TDS rates in the financial year 2019-20.

In brief, the changes are discussed here and the details will be presented below in table. And for your help, I have also included explanation in annexure.

So, for more details, you may go in annexure following table.

Few major changes made by Finance Act 2019 in tax deduction or collection like areas of TDS extended, rates changed and the full section replaced for more clarification.

The big changes in TDS rate on the bill of contractors and suppliers under section 52. The rates on the base value changed and decreases the slab of base value and rates.

Previously, the rate was up to 7% which is now reduced to 5% if the base value exceeds BDT 1 crore. And the minimum TDS rates is 2% up to BDT 25 lakh which was previously BDT 15 lakh. In both ways, the businessmen will be benefited.

TDS rate on interest on saving instruments under section 52D has been increased to 10% from 5% and now the cost will increase for the people citizen who are only depended on this secured high return instruments compare to other investment facilities. This is the final settlement tax under section 82C minimum tax and will not be refunded/adjusted who are below the tax exemption threshold limit.

Payment for hotel accommodation is included under section 53A which was previously only for the rent payment to house property owner. The rate remain same at 5% irrespective of payment by the specified person. The replaced section included two definitions “specified person” and “payment” which refer to the section 52.

Same definitions included in the section 52P services from convention hall, conference centre etc. and section 53J rental value of vacant lanf or plant or machinery.

Last year dividend on corporate taxpayer has been exempted as there was much talk about the multiple tax payment on dividend distribution by the corporate taxpayers. And then it exempted to the resident companies from taxed dividend. But this year non-resident companies will also get relief from taxed dividend under section 54.

Trade license fee from city corporation or paurashava has been increased significantly. This year the government has reduced company registration fee from RJSC to develop the rank in ease of doing business. But whether the increase of trade license will impact the world ranking?

Hope, you have understand all the changes are made through the Finance Act 2019 in TDS rates.

Now, let’s start for details TDS rates with section references.

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Please rotate your smartphone screen for friendly view of the below table.

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) Courier service;

(xi) Packing and Shifting service;
(xii) 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 or ride sharing services

(13A) Wheeling charge for electricity transmission
(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 immovableproperty situated
within a city corporation, paurashava orcantonment board

(b)1% of the amount of such
compensation against the
immovableproperty situated
outside thejurisdiction of a city corporation, paurashava orcantonment board

10

Interest on saving instruments

Section 52D

10%
(No withholding tax on interest on pensioners savings certificate if cumulative investment in suchcertificate at theend of the income year does notexceed 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. 3,000/-for DhakaNorth City
Corporation, Dhaka South City Corporation & Chittagong City Corporation;

Tk. 2,000 for any other city corporation,

Tk. 1,000 for any paurashava of any district
headquarters;

Tk. 500 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;

No tax against remittance on sale of software or services if it is exempted under paragraph 33 of part A of the sixth schedule.

Section 52Q

10%

21

International gateway service in respect of phone call.

Section 52R

(1)1.5%of totalrevenue received byIGW services
operator.

(2) 7.5% of revenue paid or credited toICX,ANS and others

(2A) 7.5% on the whole amount sopaid or credited at
the time of payment or credit

       

22

Payment in excess of premium paid on life insurance policy

Section 52T

5%

23

Payment on account of purchase through local L/C

Section 52U

3%
(If purchase of goods for the purpose of trading or reselling after process or conversion)

1%

(Payment against the invoice or sale of goods to distributor)

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

24

Payment of fees, revenue sharing etc. by cellular mobile phone operator

Section 52V

10%

25

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

26

House property or hotel accommodation

Section 53A

5% of the gross rent

27

Shipping business of a resident

Section 53AA

5% of total freightreceived or receivable inor out of Bangladesh

3% of total freight received or receivable from services rendered between two or more foreign countries

28

Export of manpower

Section 53B & Rule 17C

10%

29

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

30

Member of Stock Exchanges

Section 53BBB

0.05%

31

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

32

Goods or property sold by public auction

Section 53C & Rule 17D

5% of sale price

33

Courier business of a non-resident

Section 53CCC

15% on the amount of service charge

34

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
paymentexceedTk.10,000)

35

Export cash subsidy

Section 53DDD

10%

36

Commission, discount or fees

Section 53E(1) and (2)

Annexure 5

37

Commission, discount or fees

Section 53E(3)

Annexure 5

38

Commission or remuneration paid to agent of foreign buyer

Section 53EE

10%

39

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)

40

Real estate or land development business

Section 53FF

See annexure 7 incase 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

41

Insurance commission

Section 53G

5%

42

Fees of survey or so for general insurance company

Section 53GG

10%

43

Transfer of property

Section 53H

As mentioned in section 53H

44

Collection of Tax from lease of property

Section 53HH

4%

45

Interest on deposit of post office Saving bank account

Section 53I

10%

46

Rental value of vacant land or plant or machinery

Section 53J

5% of the rent

47

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%

48

Transfer of shares by the sponsor shareholders of accompany listed with stock exchange

Section 53M

5%

49

Transfer of shares of any Stock Exchange

Section 53N

15% on gain

50

Any sum paid by real estate developer to land owner

Section 53P

15%

51

Dividends

Section 54

Resident/nonresident
Bangladeshi
company —-
20%
Resident/nonresident
Bangladeshi
person other
than company
-If TIN, 10%
-If No TIN,
15%

52

Income from lottery

Section 55

20%

53

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 coal, oil or gas exploration

(24A) Fees, etc. of surveyors of general insurance company
(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%

54

Advance tax for private motor car

Section 68B

Annexure9

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

Base value

Rate

1

Up to BDT 25 lakh

2%

2

Above BDT 25 lakh but below BDT 50 lakh

3%

3

Above BDT 50 lakh but below BDT 1 crore

4%

4

Above BDT 1 crore

5%

(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 lakh

b) 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) Courier service

(xi) Packing and shifting service

(xii) 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, ride sharing services

3%

4%

13A

Wheeling charge for electricity transmission

4%

5%

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 IslamiShariah, 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 coal, oil or gas exploration

5.25%

24A

Fees, etc. of surveyors of general insurance company

20%

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 than2000cc to 2500cc motor car or jeep

50,000

4

More than2500cc to 3000cc motor car or jeep

75,000

5

More than3000cc 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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