Although the Central Bank has reduced the rates for deposits maintained in commercial banks, the special interest rate of 15% offered by the Government for senior citizens have not been changed, Finance Ministry announced.
The special interest rate of 15% that has been granted for the fixed deposits which are maintained by senior citizens was introduced in Budget 2015 and, it has been continuing with effect from 13.03.2015 without any change to it.
The income from the interest of senior citizens up to one million rupees was exempted from withholding tax by Budget 2015.
The Budget 2018 increased the threshold of this interest income for senior citizens up to 1.5 million rupees.
Accordingly, with the aim of continuing further the concessions to senior citizens, the annual interest income of senior citizens up to 1.5 million rupees has been exempted from withholding tax.
The Treasury has been paying nearly 16 billion rupees annually to commercial banks to provide increased interest rate of 15 % to senior citizens.
(LI)