In a statement made today in Parliament, Deputy Minister of Labor and Economic Development, Dr. Anil Jayantha, announced a revised special interest scheme for fixed deposits aimed at senior citizens, set to take effect from July 1, 2025. This scheme is part of the 2025 budget proposals, with the goal of providing more favorable financial conditions for senior citizens.
The announcement was made in response to a question raised by Opposition Leader Sajith Premadasa under Standing Order 27/2 regarding the welfare of senior citizens. The Minister elaborated on the key aspects of the scheme, which will offer an attractive interest rate on fixed deposits for citizens aged 60 years and above.
In an effort to increase tax collection efficiency and provide convenience for senior citizens earning less than the tax exemption limit, Dr. Jayantha revealed that no 10 percent tax will be withheld at the source on interest income if the individual's assessed income does not exceed Rs. 1.8 million. This is contingent upon the senior citizen providing a statement of income to their bank or relevant financial institution.
Banks and financial institutions are being provided with necessary instructions to implement this measure. Additionally, this tax relief is also extended to child deposits, where the guardian of the child must intervene and provide relevant income declarations to ensure eligibility.
The scheme allows senior citizens to open fixed deposits in multiple banks, with a maximum deposit amount of Rs. 1 million per depositor. The deposits will have a tenure of one year, and interest will be paid out on a monthly basis.
This initiative is expected to provide greater financial flexibility to senior citizens, making it easier for them to manage their savings and investments while benefiting from more favorable tax treatment.
