Income Tax (Exemption of Prescribed Amount of Interest Derived by Individuals from Deposits in Standard Savings, Current or Fixed Deposit Accounts) Rules 2005

No. S 138

Income Tax Act

(Chapter 134)

Income Tax (Exemption of Prescribed Amount of Interest Derived by Individuals from Deposits in Standard Savings, Current or Fixed Deposit Accounts) Rules 2005

In exercise of the powers conferred by sections 7 (1) and 13(1)(zc) of the Income Tax Act, the Minister for Finance hereby makes the following Rules:

Citation

1. These Rules may be cited as the Income Tax (Exemption of Prescribed Amount of Interest Derived by Individuals from Deposits in Standard Savings, Current or Fixed Deposit Accounts) Rules 2005 and shall have effect for the period from 1st January 2003 to 31st December 2004.

Definitions

2. In these Rules —

“AAER” means the average annual exchange rate for the year in which the interest is derived by the individual;

“benchmark interest” means the amount of interest determined by The Development Bank of Singapore Limited to be payable by it on a deposit of $100,000 held throughout the year in a POSB savings account;

“finance company” means a finance company licensed under the Finance Companies Act (Cap.108);

“year” means calendar year.

Calculation of prescribed amount of interest derived by individuals resident in Singapore from standard savings, current and fixed deposit accounts to be exempt from tax

3.—(1) For the purpose of section 13(1)(zc) of the Act, the prescribed amount of interest derived in the year 2003 by an individual resident in Singapore shall be an amount equal to the difference by which the aggregate amount of interest derived by him from his deposits in his standard savings, current or fixed deposit accounts with approved banks or finance companies in the year (excluding interest derived from his deposits in his POSB savings accounts with The Development Bank of Singapore Limited) exceeds the benchmark interest of $152.98.

(2) For the purpose of section 13(1)(zc) of the Act, the prescribed amount of interest derived in the year 2004 by an individual resident in Singapore shall be an amount equal to the difference by which the aggregate amount of interest derived by him from his deposits in his standard savings, current or fixed deposit accounts with approved banks or finance companies in the year (excluding interest derived from his deposits in his POSB savings accounts with The Development Bank of Singapore Limited) exceeds the benchmark interest of $125.

Calculation of prescribed amount of interest derived by individuals not resident in Singapore from standard savings, current and fixed deposit accounts to be exempt from tax

4.—(1) For the purpose of section 13(1)(zc) of the Act, the prescribed amount of interest derived in the year 2003 by an individual not resident in Singapore shall be an amount equal to the difference by which the aggregate amount of interest derived by him from his deposits in his standard savings, current or fixed deposit accounts with finance companies in the year exceeds the benchmark interest of $152.98.

(2) For the purpose of section 13(1)(zc) of the Act, the prescribed amount of interest derived in the year 2004 by an individual not resident in Singapore shall be an amount equal to the difference by which the aggregate amount of interest derived by him from his deposits in his standard savings, current or fixed deposit accounts with finance companies in the year exceeds the benchmark interest of $125.

Calculation of prescribed amount of interest in joint accounts

5.—(1) The prescribed amount of interest in any joint standard savings, current or fixed deposit account shall be computed for each individual holder of that account in accordance with rule 3 or 4 (as the case may be).

(2) Where 2 or more individuals are joint holders of a standard savings, current or fixed deposit account (as the case may be), it shall be presumed, unless otherwise proven, that each holder has an equal share of the moneys in that account.

Calculation of prescribed amount of interest in foreign currencies

6. For the purpose of computing the prescribed amount of interest under rule 3, 4 or 5, any interest derived by any individual in any year which is expressed in a foreign currency shall be converted into Singapore currency by multiplying the amount of the interest expressed in the foreign currency by the AAER for that year.

Made this 15th day of March 2005.

LAM CHUAN LEONG

Second Permanent Secretary
(Special Projects),
Ministry of Finance,
Singapore.

[MF R032.018.0038V8; AG/LEG/SL/134/2002/13 Vol. 1]

(To be presented to Parliament under section 7(2) of the Income Tax Act).

Search within Legislation