Tax Exemption Of Interest Income

For standard savings accounts with POSB - from 1 January 2003, interest income will be tax exempt, regardless of the aggregate balance in the accounts, for resident and non-resident individuals. Standard accounts with approved banks (other than POSB savings accounts) and finance companies - for tax years 2003 and 2004, interest income derived by resident individuals from the first $100,000 of deposit of monies in all accounts will be taxable. Any additional interest income will be tax exempt. For non-resident individuals, interest income from approved banks are already non-taxable under current laws. Interest income from all standard accounts with finance companies in excess of $100,000 will only be tax exempt under the partial tax exemption rule.

Please click here for detailed IRAS publication on Tax exemption of interest income

Updated January 2006