The obligation to withhold tax at source is not limited to large corporations. It applies to:

• Companies, including foreign companies operating in Bangladesh
• Firms, associations, trusts, and funds
• Public-private partnerships, foreign contractors, and foreign enterprises
• Hospitals, clinics, and diagnostic centres
• E-commerce platforms, hotels, community centres, and transport agencies with annual turnover above BDT 1 crore, and non-farmer tobacco leaf producers

Every withholding obligation, regardless of payment category, follows the same operational sequence:

Every obligation described in this guide traces back to three instruments, and the NBR's Withholding Tax Management Unit (WTMU) publishes a consolidated guideline each year that maps them to practical rates and deadlines:

• আয়কর আইন, ২০২৩ (Income Tax Act, 2023) — the parent law setting out each withholding section and the general scheme of deduction, deposit, certification, and return filing.
• অর্থ আইন, ২০২৬ (Finance Act, 2026) — the annual act that revises specific rates and thresholds year to year.
• উৎসে কর বিধিমালা, ২০২৬ (Withholding Tax Rules, 2026) — S.R.O. No. 573-আইন/আয়কর-৫/২০২৬, dated 5 July 2026 — which fills in the detailed sub-category rates for contractors/suppliers, services, non-resident payments, and property transactions.

• July to May: within 14 days after the end of the deduction month.
• 1–20 June: within 7 days of deduction.
• 21–28 June: the next day.
• 29–30 June: the same day.

Every withholding entity must register on the eTDS portal (etds.gov.bd) and submit its Withholding Tax Return (WHTR) there with the relevant DCT circle, giving a payee-wise breakdown: each payee's name, TIN (or reason for its absence), the amount paid, the section under which TDS was deducted, the rate applied, and the amount deducted and deposited.

Each return is still built from the underlying monthly deductions — a return can only be as accurate as the deduction register behind it — so the most reliable way to manage a quarterly filing rhythm is to close out and reconcile your TDS register every month, then compile, cross-check, and submit the consolidated quarterly return well ahead of your filing window rather than trying to reconstruct three months of deductions at once.

• Failure to deduct or deposit: liability for the undeducted amount, a penalty of up to BDT 10 lakh, additional tax of 2% per month on the shortfall, and possible imprisonment of up to 1 year or a fine.
• Late deposit of deducted tax: interest of 2% per six months, for a maximum of 24 months.
• Payment made without deduction: the entire payment is disallowed as a business expense, directly increasing your taxable profit.
• Late or missed return filing: the higher of 10% of the applicable tax or BDT 5,000, plus BDT 1,000 for each continuing month of default.

Build the Process, Not Just the Spreadsheet

Most TDS failures aren't caused by not knowing the rate — they're caused by not having a repeatable process: no one classifying payments consistently, no shared deduction register, no one chasing the deposit deadline, no reconciliation before the return is filed. Treating TDS compliance as a standing operational routine, owned by a specific person on a specific schedule, is what actually prevents the penalties above.