What Tax Return Benefits Come With Savings Certificates, and How to Enter Them in the E-Return

Investing in savings certificates can bring certain benefits in the income tax return alongside regular profit. In particular, the tax deducted at source on the profit from savings certificates can be adjusted when the return is filed.

To obtain that benefit, however, the amount invested, the profit earned and the tax deducted at source must all be stated correctly in the return. Investing in savings certificates does not mean a tax rebate will be available in every case, nor that the tax liability will be fully met.

The National Board of Revenue's (NBR) e-return system has specific arrangements for entering information on savings certificate investments, profit and source tax. For the 2026-2027 tax year, filers need to know how this information should be presented, in which cases a rebate may be available, and how the tax deducted on profit can be adjusted.

Under Section 105 of the Income Tax Act, 2023, there is a provision for deducting tax at source on savings certificate profit. Under the applicable rules, 10 percent of the profit is generally deducted at source if the investor has a Taxpayer Identification Number (TIN), and 15 percent if they do not.

After tax has been deducted at source, the total tax liability is calculated in the return and the tax already paid can be adjusted. Depending on the taxpayer's actual liability, additional tax may have to be paid, while in applicable cases adjustment can also reduce the risk of overpayment. The applicable law and provisions of the relevant tax year must be followed in determining the source tax rate and the final liability.

Subject to meeting specified conditions, there is an opportunity to obtain a tax rebate on savings certificate investment. The full amount invested is not, however, deducted from taxable income; the rebate is calculated by the method prescribed in law.

What must be considered is which type of savings certificate was bought and for how much, whether the investment qualifies for a rebate in the relevant tax year, and the amount of the taxpayer's total income and tax liability. If the taxpayer has no tax liability, the financial benefit of a rebate against the investment may not be available. Even where the rebate reduces the liability, a minimum tax may still have to be paid in applicable cases.

The principal investment in savings certificates and the profit earned from it must be shown in separate parts of the return. The principal must be presented as the taxpayer's asset and the profit as income. The investment information goes in the e-return's 'Assets and Liabilities' section, while the profit must be shown in the 'Income from Financial Assets' section.

Information on savings certificates bought online can be brought in through the e-return's 'Import from NSD' option. The imported information must, however, be checked for accuracy. For certificates whose information is not available automatically, the necessary details may have to be entered manually.

If tax has been deducted at source on savings certificate profit, that information must also be mentioned in the return. For this, filers go to the 'Tax and Payment' section of the e-return, open the 'e-Return Ledger' from the 'Update Tax Payment Status' option, then go to 'Claim Source Tax', select 'Savings Certificate' and provide the necessary information.

For regular profit, the three-monthly profit-based savings certificate is a familiar investment instrument. Certificates are available in denominations of one lakh, two lakh, five lakh and ten lakh taka. They can be bought and encashed through district savings offices, the National Savings Special Bureau, commercial banks and post offices.

This certificate has a term of three years. The profit rate depends on the amount invested and the time of encashment. If it is encashed before the full term, the profit rate may fall under the applicable rules, and if excess profit has already been paid, the extra amount may be adjusted from the principal.

Eligibility and investment limits differ by the type of savings certificate. While Bangladeshi citizens can invest in general savings certificates, specified eligibility must be met for the Family Savings Certificate and the Pensioner Savings Certificate. Limits can also differ for individuals by single or joint ownership and by the type of institution.

Three things need particular attention when entering information in the return — the amount of the principal investment, the profit earned, and the tax deducted at source. These three pieces of information must be consistent with each other. Before filing, it is wise to verify the National Savings Directorate's information, the certificate itself and the tax deduction statement. The actual benefit will depend on the law of the relevant tax year, the type of investment, and the taxpayer's income and liability.