The Inland Revenue Department (IRD) has announced a simplified self-declaration process to alleviate the 10 percent advance income tax (AIT) burden on interest earnings for the low and middle-income earners.
Outlined in Circular SEC/2025/E/03, the new system targets the resident taxpayers with a total annual taxable income not exceeding Rs.1.8 million.
taxpayers can now submit a self-declaration form to their banks or financial institutions to gain exemption from the standard AIT deductions on the interest income from deposits, savings accounts and Islamic financial products.
The taxable monthly income threshold has increased from Rs. 100,000 to Rs. 150,000, providing tax relief.
Meanwhile, under new tax policies, a 15% tax on foreign service income has been introduced, and stamp duty on leases and rentals has doubled to Rs. 20 per Rs. 1,000.
