Cabinet Spokesman and Minister Dr. Nalinda Jayathissa assured that no withholding tax will be imposed on interest earned from children’s savings accounts if the child’s monthly income is below Rs. 150,000.
Responding to a journalist’s query about the 10% withholding tax on interest from savings accounts held by minors under 18, the Minister clarified that the tax would only apply if the monthly income from the account exceeds Rs. 150,000 and includes interest earnings.
Dr. Jayathissa also highlighted ongoing efforts to address challenges in recovering funds from the Inland Revenue Department.
“A system is being developed to streamline this process. Importantly, the tax will not take effect immediately but will be implemented starting April 1 next year,” he said.
The Minister added that the Finance Ministry is working on simplifying the process for refunding withholding tax to the public. Concurrently, discussions with the banking sector aim to establish a user-friendly system enabling individuals to manage refunds more efficiently through their respective banks.
