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Legal-information disclaimer: This content is a general summary based on materials provided and is not legal advice. For a binding position on a transaction or specific tax treatment, consult the statute, the National Board of Revenue and qualified counsel. Use the booking link to request a meeting.
TDS in Bangladesh — 2025
A practical, people-focused guide to Tax Deduction at Source (TDS) under the Income Tax Act 2023 and the Withholding Tax Rules 2024. For implementation or technical queries, book a consultation or write to us.
Overview
Tax Deduction at Source (TDS) requires a payer to withhold and remit specified amounts of tax when making certain payments. This page summarises commonly applied categories, practical processes and compliance considerations in 2025 based on the Income Tax Act 2023 and the Withholding Tax Rules 2024. This is a general guide; apply the statute, regulations and official NBR guidance to specific questions.Legal framework & requirements
- Primary authorities referenced on this page: Income Tax Act 2023 and Withholding Tax Rules 2024 (as cited by the user-provided source).
- Withholder Identification Number (WIN): required where a person is responsible to deduct or collect withholding tax.
- Proof of Submission of Return (PSR): many payer obligations and rates depend on the payee's PSR/TIN status — verify before applying lower or special rates.
Note: This page summarises material from publicly referenced instruments. For binding advice on a transaction, please book a consultation.
TDS categories (high level)
Employment & salaries
Monthly withholding linked to annual liability; average-rate methods commonly used for payroll withholding.Business contracts
Supply of goods, construction and services often have specific withholding percentages that may vary by sector and contract value.Professional services
Consultants, advisors and service providers are typically subject to withholding; reduced rates may apply where electronic TINs or other conditions are met.Financial & investment
Interest, dividends and insurance commissions are subject to distinct withholding rules that differentiate by payee type.Import / export & international
Cross-border payments and import-related withholdings may use HSN, service classifications and treaty considerations.Special categories
Sector-specific rules exist for real estate, mobile operators, shipping and a number of licensed activities.Salary & employment
Employers generally deduct monthly TDS from salary. Relevant considerations include taxable allowances, exemptions and the mechanism for computing an average monthly deduction from an annual liability.Salary TDS calculator (illustrative)
This is a simplified illustrative calculation. Use official tax tables and seek advice for precise liabilities.
| Category | Reference (source) | Notes |
|---|---|---|
| Regular salaries | Section 86 | Monthly deduction from average annual liability |
| Participation & welfare funds | Section 88 | Separate statutory contributions may apply |
Business & contract withholding
Contract categories and supply chains often attract fixed withholding percentages. Apply the sector schedule and confirm thresholds and value bands when assessing withholding.| Supply category | Typical withholding (example) | Reference |
|---|---|---|
| MS billets & scrap | 0.5% | Section 89 (source list) |
| Essential commodities | 1% | Section 89 (source list) |
| Manufacturing services | up to 7% | Section 89 (source list) |
| Tobacco products | 10% | Section 89 (source list) |
Thresholds: Many rates vary by contract value bands. Confirm the applicable band before applying withholding.
Professional services
Professional and technical services typically require withholding at specified rates. Registration (e.g. electronic TIN) and the correct documentation may affect the rate applied.| Service type | Common withholding | Notes |
|---|---|---|
| Advisory / consultancy | ~10% | Rate depends on payee status and documentation |
| Technical services | 10% (registered) / higher if unregistered | Reduced rates often conditioned on e-TIN |
| Transport / logistics | ~5% | Varies by contract structure |
Financial & investment withholding
Interest, dividends and insurance commissions have their own withholding regimes and payee classifications matter (individuals, companies, trusts).Common examples
- Interest on securities and LC commissions — subject to specified rates.
- Dividends — rates may differ by TIN/e-TIN status.
- Fixed deposits — rates can differ for individuals vs companies.
Illustrative calculator
Import / export & international payments
Cross-border withholding frequently depends on transaction type, HSN-based import classifications and any applicable tax treaty. Withholding on foreign service payments and freight/commission has specific bases — verify with the statutory texts and NBR guidance.| Transaction | Typical range | Basis |
|---|---|---|
| Import of goods | 0%–20% | HSN / tariff classification |
| Export proceeds | 1% (illustrative) | Value of exports |
| Foreign service payments | example: 7.5% | Service fees / contracts |
Compliance & checklist
Timely deduction, deposit, return filing and certificate issuance are the principal operational obligations. Keep robust records and verify payee TIN/PSR status. Deadlines (typical): deposits, monthly returns and annual statements have statutory dates. Confirm the applicable dates and penalty rules when planning remittance.
Frequently asked questions
Start by identifying the payment category against the statutory schedule and confirm the recipient's TIN/PSR status; where doubt remains, seek a formal ruling or specialist advice.
Many regimes impose a higher withholding rate where a payee lacks required registration. Verify documentation and apply the statutory rate for unregistered payees.
TDS amounts generally create tax credits for payees when filing returns; the exact treatment depends on the payee's return and computation of tax.
Yes. Rates and procedures often differ. Cross-border payments may also be subject to treaty relief—apply treaty provisions where relevant and supported by documentation.
Maintain copies of payments, certificates issued, TIN/PSR verification, deposit receipts and reconciliations for the statutory retention period and audit purposes.