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 has not been changed, the Finance Ministry said yesterday.
“There is no truth in the media reports published by various media saying that the 15% special bank interest rate which has granted by the Government for senior citizens has been reduced,” the Finance Ministry said in a statement.
The special interest rate of 15% that has been granted for the fixed deposits which are maintained by senior citizens was introduced by Budget 2015 and, it has been continuing with effect from 13 March 2015 without any change.
The income from the interest of senior citizens up to Rs. 1 million was exempted from Withholding Tax by Budget 2015. Budget 2018 increased the threshold of this interest income for senior citizens up to Rs. 1.5 million.
Accordingly, with the aim of continuing further the concessions to senior citizens, the annual interest income of senior citizens up to Rs. 1.5 million has been exempted from Withholding Tax.
The Treasury has been paying nearly Rs. 16 billion annually to commercial banks to provide the increased interest rate of 15% to senior citizens.