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The Financial Express

Withdrawing tax on small fixed deposit income

Published: June 13, 2016 18:37:20 | Updated: October 24, 2017 06:01:24


Withdrawing tax on small fixed deposit income

BANGLADESH is a democratic country. A democratic government must work for the welfare of its citizens. It must make policies to reduce burden of its financially weak population. Tax provision on fixed deposit income should be amended to follow welfare principles. The government has imposed 10 per cent tax at source on interest income of the TIN holders and 15 per cent for non-TIN holders from the financial year 2013-14. Before that 10 per cent tax at source was imposed on interest income. Bank and other financial institutions have drastically reduced interest rates on deposits in recent years. In most cases the rate of interest has come down to 5.0 per cent on fixed deposit, which was above 10 per cent three years ago. We are experiencing 6.0 to 7.0 per cent inflation in recent years. That means when the rate of inflation is deducted from interest income, depositors get no income at all in real terms from fixed deposits. There are a good number of small depositors who live on their small fixed deposits in banks or financial institutions. It is difficult to survive with such low income from fixed deposits. If the depositors have to pay tax at source on the interest income now they will have to part with their principal amount. The government can help them by withdrawing tax at source on deposits.
Mohd. Ashraf Hossain
8/A, Ramna, Dhaka-1000.
mah120cb@yahoo.com
 

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