‘Extra tax’ imposed on interest even after returns filing

Banks are deducting 1.5 times the necessary tax on interests because an NBR verification process has run into difficulties

Zafar Ahmedbdnews24.com
Published : 14 Nov 2023, 06:04 AM
Updated : 14 Nov 2023, 06:04 AM

Ayesha Tabassum has a fixed deposit account at a private bank. She has a Tax Identification Number, or TIN. She submitted her tax returns last year. She even has a verified receipt. As such, the bank was supposed to deduct 10 percent of their annual interest in taxes. However, they deducted 15 percent.

Six other people have faced similar issues with their banks as Ayesha. All of them believed that submitting their TIN certificate and their tax return receipt would lower their tax burden on interest.

According to the law, a 15 percent tax is imposed on the interests earned by any depositors who do not have a TIN. But, anyone with a TIN and up-to-date returns will only face a 1 percent tax deduction. The same applies to interest on savings certificates.

The stock market has a similar provision. If anyone on the stock market does not have a TIN number, then 15 percent of their profits are deducted through a tax. The tax rate falls to 10 percent if they have a TIN. Many people get a TIN and submit tax returns even if their income is below the tax threshold to make use of the incentive.

But an issue at the National Board of Revenue has led to a situation where many taxpayers are not receiving the benefit of this tax cut. The issue arises because banks are not accepting their tax receipts.

The NBR has asked banks to verify all tax receipts from a website. The tax authority is responsible for uploading this verification. But the verification information for all taxpayers last year has yet to be uploaded to the site. As a result, people who paid their taxes properly are losing out.

One of the victims of this situation is a journalist working for a private television channel. Though they submitted the receipt of their tax return, it has not been verified through the NBR site. As such, the bank deducted 15 percent of their interest. It was only once they spoke to the bank about the discrepancy that they learned of the situation.

“I filed my tax return and received the receipt,” they said. “I submitted a copy of it to the bank when I collected my interest. But a bank official checked the receipt online and said it was not available and deducted 15 percent in tax from me.”

“Why hasn’t the NBR been able to update the return receipts of a year ago online? This is not the responsibility of taxpayers! Why should they pay more?”

The issue isn’t just limited to banks. Many embassies require the submission of tax receipts as part of their visa application process. There have been claims that applicants have had to ‘incur expenses’ to upload the tax receipts to the embassies themselves when it should be verified by the NBR site.


Asked about the situation, an official at the Motijheel branch of state-owned Sonali Bank presented a copy of the letter sent to them by the NBR.

“We received a letter from the head office and were instructed to verify the authenticity of our customers’ receipt for submitting their tax return while deducting the tax,” they said.

“Following these orders, we have to verify the authenticity of the receipt filed by the taxpayer and we have to deduct an additional tax if we don’t find it on the government site.”

The banker said that the verification process is conducted through the http://verification.taxofficemanagement.gov.bd site.


Shams Uddin Ahmed, a member of the NBR income tax policy team, declined to answer questions about the situation.

However, an official in his department admitted they had heard about it.

“We have received many such complaints,” they said. “But we cannot provide a solution.”

The problem is affecting those taxpayers who filed their income tax returns by filling out forms manually or through hard copies.

Asked why the problem had cropped up, they said, “Due to a lack of NBR manpower, we cannot give real-time software input.”

With the current manpower at the NBR, they were only able to upload the information of 1.5 million taxpayers, they said.

“But we may have to file many more returns in the current fiscal year. In order to resolve the issue, the NBR needs to recruit the necessary manpower on an urgent basis.”

In fiscal year 2022-23, over 2.85 million taxpayers submitted individual returns. In fiscal year 2021-22, the number was close to 2.3 million.

[Writing in English by Shoumik Hassin]