Illustration:

Mr. Rolex is a non-resident foreigner and received Tk. 7,000 as dividend from a Public
Limited Company incorporated in Bangladesh. Here, rate of TDS was 30%and thus, after
grossing up, the amount of gross dividend will be Tk. 10,000 (7,000  100/70).

10.3 Interest Income other than interest on securities

All interest income other than those considered in ‘Interest on Securities’ are considered
under this category. All possible sources of income, exemption limit and TDS rates are
given in the table below:
Sources of Interest income TDS rate Exemption
1. Interest on savings / Fixed 10% (If
deposits from a Bank, co- there is no No exemption
operative bank, non-banking TIN then
financial institution, leasing the rate will
company, housing finance be 15%)
company
2. Share of profit from any bank run 10% (If No exemption
on Islamic Principles. there is no
TIN then
the rate will
be 15%)
3. Interest on Savings Certificates: Tax will not be deducted from
a. 5 years Bangladesh interest on pensioners’
Sanchayapatra savings certificate if total
b. 3 monthly profit based 3-year 10% accumulated investment at
Bangladesh Sanchayapatra and it is the end of the income year at
c. Pensioners’ Sanchayapatra final u/s this type of savings certificate
d. Paribar Sanchayapatra 82C does not exceed
Tk.5,00,000.

4. Interest on Post Office Savings 10% No exemption

Bank account

5. Interest on Non-Resident Foreign Nil Fully exempted

Currency Deposit Account
6. Interest on DPS run by a 10% (If Only interest on Govt.
commercial Bank and approved by there is no approved DPS is tax free as
the government. TIN then per SRO.
the rate will
be 15%)
7. Interest on Wage Earners’ Bond. Nil Tax free
8. US Dollar Premium Bond Nil As per 6th schedule (Part-A)
9. US Dollar Investment Bond Nil Para-24A
10. Euro Premium Bond Nil
11. Euro Investment Bond Nil
12. Pound starling Premium Bond Nil
13. Pound starling Investment Bond Nil

Grossing up: Grossing up is important for interest income across items 1, 2, 3, 4, 5, 7 and
8 where TDS is applicable. It is not required for other 3 items (6, 9& 10) which is fully
exempted from tax and thus no tax is deducted at source.

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