TDS (Tax Deducted at Source) is a form of advance tax paid by the taxpayer when making certain payments such as salaries, commissions, rent, fees for professional or technical services, etc.
The TDS rate for suppliers in Bangladesh is not fixed; relatively, it varies based on the nature of payment and the supplier’s status. For example, suppose a residential supplier is paid for rendering professional services.
In that case, the applicable TDS rate will be 5%, and if the supplier is a nonresident, the TDS rate for the payment will be 20% higher.
In Bangladesh, TDS is governed by the Income Tax Ordinance of 1984. Today we will explore TDS and its rate broadly in the discussion.
Supplier TDS in Bangladesh
Payers and suppliers have specific responsibilities to comply with TDS regulations in Bangladesh. The payer must correctly deduct the TDS and submit it to the government within the specified time frame.
Meanwhile, the supplier must provide the necessary documents and information to the supplier to facilitate the TDS process. Under the Income Tax Ordinance, certain payments are subject to TDS in Bangladesh. The following are some of the common types of payments subject to TDS:
- Salaries and wages
- Rent paid on land and buildings
- Interest paid on deposits and securities
- Commission and brokerage
- Royalty and technical fees
- Payment to contractors for works contracts
The person making the payment is responsible for deducting TDS and depositing it with the government within a specified time. Failure to deduct TDS or to deposit the deducted amount with the government can result in penalties and legal action.
TDS is an essential mechanism for the government to collect advance tax and ensure compliance with tax laws. Businesses and individuals must understand the TDS provisions and comply with the relevant rules and regulations to avoid penalties or legal consequences.
Supply TDS Rate in Bangladesh 2022-24
The rate of TDS varies depending on the type of payment made and the nature of the transaction. For example, the TDS rate on salaries and wages is progressive and ranges from 0% to 30%, depending on the amount of salary paid and the employee’s tax status.
However, the rate of TDS varies based on the business. We will mention below the rates of TDS applicable in Bangladesh one by one. Follow the table below to get all the information about TDS applicable in Bangladesh easily.
Who Is Liable To Deduct TDS
Generally, any person who makes a payment to another person for specific transactions is responsible for deducting Tax Deducted at Source (TDS). The following individuals or entities are examples of those who may be liable to deduct TDS:
- Employers: They are mandated to withhold TDS from their employees’ salaries.
- Banks and financial institutions: They are required to deduct TDS on interest earned by their customers.
- Contractors and sub-contractors: They are expected to withhold TDS on payments made to their suppliers or subcontractors.
- Rent payers: Individuals or organizations who pay rent exceeding a certain threshold to landlords must deduct TDS on such payments.
- Commission agents: Agents who receive commissions on behalf of their clients are required to withhold TDS on such payments.
Tax Deduction From Salary In Bangladesh
Tax deduction from salary in Bangladesh is generally related to Tax Deducted at Source( TDS) or Pay As You Earn( PAYE). Employers must deduct TDS from their workers’ salaries and submit it monthly to the National Board of Revenue( NBR).
The quantity of TDS deducted from an employee’s salary depends on the employee’s gross salary, tax-free allowances, and prevailing tax rate. NBR issues a tax arbor every time, which gives an idea of different duty rates applicable for different income situations.
The employer issues a pay slip to the hand showing the quantum of TDS subtracted from the employee’s payment. Workers can file their income tax responses with NBR using that pay slip.
Tax Deducted At Source PDF
TDS is an important source of government revenue and helps in regular tax collection. TDS ensures that people pay taxes throughout the year instead of at the end of the financial year. A payer must deduct a certain chance of Tax from the payment amount and remit it to the government time of payment. The amount of tax deduction depends on various factors, including the nature and valuation of the payment and the income tax type applicable to the recipient. To know more about the TDS rate chart 2023, check this PDF.
| SL | Head | Rate |
| 1. | Salaries | Average |
| 2. | Salaries (Government) | Average |
| 3. | Discount on the real value of Bangladesh Bank Bills | Maximum |
| 4. | Interest or profit on securities | 5% |
| 5. | (a) Execution of a 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 | Annexure 1 |
| Royalties, franchise, fee for issuing the 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 | Annexure 2/td | |
| 7. | (1) Advisory or consultancy service (2) Professional service, technical services fee, technical assistance fee. (excluding professional services by doctors) | Annexure 3 |
| 8. | (2) Professional service (by doctors) | Annexure 3 |
| 9. | 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) (i) Transport service, carrying service, vehicle rental service(ii) Any other service under any sharing economy platform including ride-sharing service, coworking space providing service, and accommodation providing service;(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 | Annexure 3 |
| 10. | (7) Mobile network operator, technical support service provider, or service delivery agents engaged in mobile banking operations | Annexure 3 |
| 11. | C&F agency commission | 10% |
| 12. | Manufacturer of nonmechanical cigarettes (Bidi) | 10% of the value of banderols |
| 13. | Compensation against the acquisition of property | (a) 6% of the amount of such compensation against the immovable property situated within a city corporation, paurashava or cantonment board(b) 3% of the amount of such compensation against the immovable property situated outside the jurisdiction of a city corporation, paurashava or cantonment board |
| 14. | Interest in saving instruments | 10% (No withholding 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 lacks) |
| 15. | Payment to a beneficiary of the Workers’ Participation Fund | 5% |
| 16. | Brick Manufacturer | Tk.45,000/-for one section brickfield, Tk.70,000/-for one and a half section brickfield, Tk.90,000/-for two-section brick field, Tk.1,50,000/-for automatic brickfield |
| 17. | Commission of letter of credit | 5% |
| 18. | Renewal of trade license by City Corporation or Paurashava | Tk. 3,000/-for Dhaka North 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 |
| 19. | Freight forward agency commission | 15% |
| 20. | Purchase of power | 6% |
| 21. | Foreign technician serving in diamond cutting | 5% |
| 22. | Services from the convention hall, conference center, etc. | 5% |
| 23. | Any income in connection with any service provided to any foreign person by a resident person; No tax against the sale of software or services if it is exempted under paragraph 33 of part A of the sixth schedule or excluded from total income by paragraph 48 of Part A of the Sixth Schedule. | 10%, But 7.5% in case of contracts on manufacturing, process or conversion, civil work, construction, engineering, or works of similar nature. |
| 24. | International gateway service in respect of phone calls. | (1) 1.5% of total revenue received by IGW services operator.(2) 7.5% of revenue paid or credited to ICX, ANS, BTRC, and others(2A) 7.5% on the whole amount so paid or credited at the time of payment or credit |
| 25. | (1) 1.5% of total revenue received by IGW services operator.(2) 7.5% of revenue paid or credited to ICX, ANS, BTRC, and others(2A) 7.5% on the whole amount so paid or credited at the time of payment or credit | 5% |
| 26. | Payment on account of purchase through local L/C | 3% (If the purchase of goods for trading or reselling after process or conversion) 1% (Payment against the invoice or sale of goods to distributor) 2% (If the payment is related to the local letter of credit (L/C) and any other financing agreement in respect of the purchase or procurement of rice, wheat, potato, onion, garlic, peas, |
| 27. | Payment of fees, revenue sharing, etc., by cellular mobile phone operator | 10% |
| 28. | Import | I am not exceeding 20% on the value of imported goods. |
| 29. | Not exceeding 20% on the value of imported goods | 5% of the gross rent |
| 30. | 5% of the gross rent | 5% of the gross rent |
| 31. | Shipping business of a resident | 5% of total freight received or receivable in or out of Bangladesh 3% of full load received |
| 32. | Recruiting agents | 10%; BDT 50,000 as advance tax for a license or renewal of license |
| 33. | 10% BDT 50,000 as advance tax for a license or renewal of a license | 0.5% of the total export proceeds of all goods |
| 34. | 0.5% of the total export proceeds of all goods | i) 0.05% on the value of shares and mutual funds transacted ii) 10% on the commission received or receivable |
| 35. | Export of any goods except the goods mentioned in section 53BB | 0.5% of the total export proceeds of all goods except the goods mentioned in section-53BB |
| 36. | Goods or property sold by public auction | 10% of the sale price |
| 37. | Courier business of a nonresident | 15% on the amount of service charge |
| 38. | Payment to actors, actresses, producers, etc. | (a)10% on the payment in case of purchase of film, drama, and television or radio program(b)10% on the payment to actor/actress (If the total paymentexceedTk.10,000) |
| 39. | Export cash subsidy | 10% |
| 40. | Commission or remuneration paid to the agent of a foreign buyer | 10% |
| 41. | Interest or share of profit on saving deposits and fixed deposits etc | 10% if there is TIN;15% if there is no TIN (not applicable if the balance does not exceed BDT 1 lakh at any time in the year in case of saving deposit) |
| 42. | Interest or share of profit on any saving deposits or fixed deposits or any term deposit by or in the name of a fund | 5% |
| 43. | Real estate or land development business | Real estate or land development business |
| 44. | Insurance commission | 5% |
| 45. | Fees of survey or so for the general insurance company | 10% |
| 46. | Collection of Tax from the lease of property | 4% |
| 47. | Interest on deposit of post office Saving bank account | Interest on deposit of post office Saving bank account |
| 48. | The rental value of vacant land or plant or machinery | 5% of the rent |
| 49. | Advertisement of newspaper or magazine or private television channel or private radio station or any web site or any person on account of the ad or purchasing airtime of private television channel or radio station or such website. | 4% |
| 50. | Transfer of shares by the sponsor shareholders of accompany listed with stock exchange | 5% |
| 51. | Transfer of shares of any Stock Exchange | 15% on the gain |
| 52. | Any sum paid by a real estate developer to the land owner | 15% |
| 53. | Dividends | Resident/nonresident Bangladeshi company – 20%Resident/nonresident Bangladeshi a person other than the company -If TIN, 10% -If No TIN, 15% |
| 54. | Income from lottery | 20% |
| 55. | Income of nonresidents (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 fields and their export point (26) Any payments against any services not mentioned above | Annexure 5 |
Annexure 1: Rate of deduction under section 52
| SL | Base Value | Rate |
| 1. | Up to BDT 50 lakh | 3% |
| 2. | Above BDT 50 lakh but below BDT 2 crore | 5% |
| 3. | Above BDT 2 crore | 7% |
| 4. | In the case of oil supplied by oil marketing companies | 0.60% |
| 5. | In case of oil supplied by dealer or agent (excluding petrol pump station) of oil marketing companies, on any amount | 1% |
| 6. | In case of a supply of oil by any company engaged in an oil refinery, on any amount | 3% |
| 7. | In the case of a company engaged in gas transmission, on any amount | 3% |
| 8. | In the case of a company engaged in gas distribution, on any amount | 3% |
| 9. | In case of an industrial undertaking engaged in producing cement, iron, or iron products except for MS Billets | 2% |
| 10. | In the case of an industrial undertaking engaged in the production of MS Billets | 0.5% |
| 11. | In the case of locally procured MS Scrap | 0.5% |
| 12. | In case of a supply 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, jute, cotton, yarn and all kinds of fruits | 2% |
Annexure 2: Rate of deduction under section 52A
| Description of payment | Rate |
| Where the base amount does not exceed taka 25 lakh | 10% |
| Where the base amount exceeds taka 25 lakh | 12% |
Annexure 3: Rate of deduction from the payment of certain services under section 52AA
| SL | Description of service and payment | Where the base amount does not exceed Tk. 25 lakh | Where the base amount exceeds Tk. 25 lakh |
| 1. | Advisory or consultancy service | 10% | 12% |
| 2. | Professional service, technical services fee, or technical assistance fee | 10% | |
| 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% | 10% 0.5% |
| 5. | Indenting commission | 6% | 8% |
| 6. | Meeting fees, training fees, or honorarium | 10% | 10% |
| 7. | Mobile network operators, technical support service providers, or service delivery agents engaged in mobile banking operations | 10% | 10% |
| 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- a. On commission or fee b. On gross bill amount | 10% 1.5% | 12% 2% |
| 13. | (i) Transport service, carrying service, vehicle rental service (ii) Any other service under any sharing economy platform, including ride-sharing service, coworking space providing service, and accommodation providing service; | 3% | 4% |
| 14. | The wheeling charge for electricity transmission | 2% | 3% |
| 15. | 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 nonresidents under section 53FF
a) in case of building or apartment constructed for residential purposes:
| Area | Per square meter (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 | 1500 |
| iii) Dhaka North City Corporation, Dhaka South City Corporation, and Chittagong City Corporation other than areas mentioned in (i) and (ii) | 1000 |
| 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 |
b) in case of building or apartment or any space constructed not for residential purposes:
| Area | 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 | 5000 |
| iii) Dhaka North City Corporation, Dhaka South City Corporation, and Chittagong City Corporation other than areas mentioned in (i) and (ii) | 3500 |
| iv) Other City Corporations than Dhaka North City Corporation, Dhaka South City Corporation, and Chittagong City Corporation | 2500 |
| v) in areas other than areas mentioned in the above (i), (ii), (iii) & (iv) | 1200 |
Annexure 5: Rate of deduction from income of nonresidents under section 56
| SL | Description of Services or Payments | Rate |
| 1. | Advisory or consultancy service | 20% |
| 2. | 20% | 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 fees, 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, fund, and trust (b) any other person not being a company, fund, and trust | 20% |
| 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% |
| 25. | Fees, etc., of surveyors of the general insurance company | 20% |
| 26. | Any service for making connectivity between oil or gas fields and their export point | 5.25% |
| 27. | Any payments against any services not mentioned above | 20% |
| 28. | Any other payments | 30% |
Annexure 6: Rate of advance tax under section 68B
| SL | Types of car and engine capacity | BDT |
| 1 | Upto 1500cc motor car or jeep | 25,000 |
| 2 | More than 1500cc to 2000cc motor car or jeep | 50,000 |
| 3 | More than2000cc to 2500cc motor car or jeep | 75,000 |
| 4 | More than2500cc to 3000cc motor car or jeep | 125,000 |
| 5 | More than3000cc to 3500cc motor car or jeep | 150,000 |
| 6 | Above 3500cc motor car or jeep | 200,000 |
| 7 | For each microbus | 30,000 |
So here is all information about the TDS rate. We have presented the most updated TDS rate information here. So you can save this information on your device if you want. For any information about TDS and VAT, you can visit our website. Thank you.