Section 8 of the Income Tax Act, Chapter 81:01 has been amended accordingly to facilitate the increase in the statutory deduction, which has increased from nine hundred thousand dollars ($900,000) to one million, twenty thousand dollars ($1,020,000) in accordance with the Income Tax (Amendment) Act No. 3 of 2023.
The Section now provides as follows:
Section 8 (1) of the Income Tax Act, Chapter 81:01 states that “Notwithstanding the provisions of section 39(1)(c), (d) and (e) any person referred to in subsection (3) whose income from all sources does not exceed one million, twenty thousand dollars per annum shall be exempt from taxation on interest earned on savings accounts.”
Section 8 (4) states that, “Where the income from all sources exceed one million, twenty thousand dollars per annum then notwithstanding section 39(6)(b) that person shall at his option be subject to income tax on his income from all sources including interest greater than ten thousand dollars on savings accounts in which case, withholding tax deducted under section 39(1)(c), (d) and (e) shall be granted as a set-off against the tax assessed.”
Therefore, persons who are resident and have attained the age of sixty years (60) or are incapacitated by illness or infirmity shall be granted exemption from paying twenty percent (20%) Withholding Tax on interest earned on savings where their total income does not exceed one million, twenty thousand dollars ($1,020,000).
Further, where such a person whose income has exceeded one million, twenty thousand dollars ($1,020,000) from all sources, and that person decides to submit an income tax return declaring their income from all sources including interest from savings account withholding tax charged on savings interest by the bank will be granted as a set off against the tax assessed disclosed in the income tax return submitted to the Guyana Revenue Authority.
Therefore, persons in accordance with Section 8 of the Income Tax Act, Chapter 81:01, whose interest earned on Savings Account does not exceed ten thousand dollars ($10,000) will not be required to apply for an exemption letter from the Guyana Revenue Authority.
Persons who wish to benefit from the withholding tax exemption, where the Interest earned on savings account are in excess of ten thousand dollars ($10,000), are asked to make an application to the Taxpayer Services Division of Guyana Revenue Authority and submit their original updated Bank Books or Statements for the preceding year and their Identification Card or passport for all individuals on the Account or the same information can be scanned and sent to firstname.lastname@example.org for processing. However, persons will be required to uplift the letter from the Guyana Revenue Authority and walk with the scanned documents for verification purposes.
Kindly note that this measure takes effect from January 1, 2023.
By Order of
Mr. Godfrey Statia
Guyana Revenue Authority