Deputy Minister assures ‘no deadline’ for WHT declarations on interest income

Economic Development Deputy Minister Dr. Anil Jayantha Fernando 

• Economic Development Deputy Minister Dr. Anil Jayantha Fernando insists public not panic or rush due to misinformation
• Says self-declarations can be submitted anytime during assessment year
• Asserts no TIN required to make declaration
• Says large one-time interest payments do not immediately trigger tax liability as it is assessed annually 
• Assures any mistakenly deducted WHT can be reclaimed, with mechanisms in place for correction
• Notes revenue collection for Q1 2025 exceeds targets across IRD, Customs, and Excise Departments

Economic Development Deputy Minister Dr. Anil Jayantha Fernando on Wednesday (30) strongly dismissed false claims spreading across society about the 10% withholding tax (WHT) on interest income from bank deposits. 

Making a special statement, he reassured the public that there is “no deadline” to declare their income status to avoid tax deductions.

“It has come to light that false information is circulating regarding the deduction of WHT on interest income. There is no truth to these rumours that if you don’t inform your bank by 30 April, you will be taxed,” he affirmed. 

On 1 April, the Inland Revenue Department (IRD) doubled the WHT from 5% to 10%. However, individuals below the Rs. 1.8 million threshold are still exempt from this tax—provided they inform their bank using the self-declaration form. This form is available both online and at banks.

Dr. Fernando emphasised that individuals can make that declaration at any time during the assessment year.

The Deputy Minister explained that if a person’s annual income, including all interest from banks and financial institutions, “does not exceed Rs. 1.8 million,” they are not required to pay WHT. 

“Even if you receive a large interest sum at once – say, for example, Rs. 160,000 – it is calculated on an annual basis. Many are rushing to banks thinking they must do this before a deadline—which is false,” he stressed.

Dr. Fernando also assured that not having a Taxpayer Identification Number (TIN) is not a problem. 

“A TIN is not required to submit this declaration, provided the individual responds to any related information requests made by the respective bank for departmental purposes, and banks will accept your declaration even without a TIN,” he said.

The IRD has launched an online portal for TIN registration, making the process easier. Yet, Dr. Fernando acknowledged that some individuals may still find it difficult or confusing—urging the public not to panic. 

“Banks send data to the IRD every three months. So there’s no need to crowd banks or stress over misinformation. We want to make this process simple for everyone,” he reiterated.

Even if a tax has already been erroneously deducted, the Deputy Minister said: “there are multiple ways to claim it back.”

“Our goal is clear—make the system fair, accessible, and efficient. No one needs to fear it, especially those who fall below the tax threshold,” Dr. Fernando asserted.

Recently, IRD Deputy Commissioner General B.K.S. Shantha revealed that Sri Lanka forgoes nearly Rs. 60 billion each year due to concessions offered to low-income earners. Still, the Department is pushing forward with reforms and has set a tax revenue target of Rs. 2,195 billion for 2025.

Dr. Fernando also noted that major revenue agencies, including the IRD, Customs, and the Excise Department, have already surpassed their quarterly targets, which he described as a major milestone in the Government’s economic reform journey under the International Monetary Fund (IMF) program.