‘Extra tax’ on interest even after returns filing

News Desk :
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, reports bdnews24.com

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.”