Withholding tax to be removed from January

The removal of withholding tax levied from the customers of banks as announced by the new government last month will be effective from next month (January) and completed in two phases, Inland Revenue Department (IRD) said yesterday.

Accordingly, the customers who are earning less than Rs.250,000 per month as interest would be exempted first from paying the tax.

A source from the department said that those who are earning more than Rs.250,000 a month as interest would be levied a 5% withholding tax up to March 31, and thereafter it will be totally scrapped.

Interest earning by a person from all his accounts in banks and recognised financial institutions will be calculated for his exemption from withholding tax and those who are willing to be exempted should submit a claim accordingly with details of all his interest earnings, the source said.

It said that the procedure which should be followed by the banks in this regard will be communicated to them in a day or two. (M. S. M. Ayub)