Apr 02, 2018

5 pc interest irrespective of interest income Featured

A five per cent annual interest on all interest income of bank deposits, excepting those belonging to senior citizens, will be levied irrespective of the amount of the interest income, according to the new inland revenue act.

Quoting the finance ministry, ‘Divaina’ reports that only for senior citizens, an interest income of up to Rs. 1.5 million annually, or Rs. 125,000 a month, is exempted from tax.

Therefore, the banks will levy the five pc interest on all savings and fixed deposits, based on the account balances.

This interest is applicable to expatriate workers as well, and experts say they will be discouraged to send foreign remittances as a result.

They note that the people deposit money in banks to make some savings that will go to build a house, children’s education, medical treatment etc., and that the tax has been introduced without understanding the realities.

Attempts by Sri Lanka Mirror to contact Deshal de Mel, finance minister Mangala Samaraweera’s advisor, failed as he did not answer the phone.