OPA at your service

[Questions and Answers]

Pension paid in Sri Lanka to pensioners living overseas

Question: My brother-in-law is a pensioner residing in Australia and is drawing his pensions at the Standard Chartered Bank in Colombo for more the last thirty years through a voucher certified by the Sri Lankan consulate with a living certificate letter monthly. He used to assist his relations and dependents, religious and social organisations financially through a cheque of this bank drawn in their favour whenever they require his assistance.

He is worried over the recent declaration form sent to pensioners in foreign countries wherein they wanted only the account numbers in foreign banks. He states that he cannot adequately support those concerned transacting cash from foreign banks at a mega exchange rate. He states that he has to remit 35 Australian dollars in addition for each transaction which will amount to Rs. 2,430. This will hinder his assistance to those concerned. Hence he requests retention of the remittance of his pension to the bank concerned in Sri Lanka. He is prepared to furnish a living certificate endorsement from the consulate to the Department of Pensions quarterly if it is required.

You are kindly requested to discuss with the Director of Pensions and assist him to resolve this problem.

V. Sriskantharajah,  Dehiwela.

Answer: Pensioners who left the country long years ago had to receive their pension in Sri Lanka. However, in recent times it was allowed to remit their pension overseas to wherever they live.

Pensioners living overseas had to forward the relevant form/voucher monthly along with a living certificate to prove that the pensioner is still living. However, it is alleged that there has been several abuses. Pensions have been drawn/paid for persons not living any longer. In some cases the certificates of those living are signed for several months in advance and kept with someone in Sri Lanka who forwards this monthly. In order to avoid any such abuse/misuse the Pensions Department has proposed to pay the pension overseas through the Sri Lankan Consulate offices.

Your friend can appeal in writing to the Director General of Pensions, Department of Pensions, New Secretariat Building, Maligawatte, Colombo 10, explaining his position for consideration to continue paying his pension in Sri Lanka.

Public transport (bus) service

Question: It is a known fact that the bus service particularly on routes 155 and 187 (as far as I know), halt at each junction for 10 to 15 minutes, causing much inconvenience to the commuters. Hardly does anyone openly complain and recently when I complained to the driver the answer was 'Oyata hadissi nam taxiye yanna'. (If you are in a hurry take a taxi).

Isn't there any regulation to prevent this? Isn't there a time limit that a bus could stop at a halting place? Whom can one complain to in such a case and on what telephone numbers? Can immediate action be expected on such complaints?

Please advise for the benefit of the general public.

A concerned commuter, Welisara.

Answer: We checked with the persons concerned and were made to understand that usually the Sri Lanka Transport Board buses are expected to stop at bus halts for 2-3 minutes only. If the number of passengers boarding are below 5 in number, the conductor is expected to get down and issue the ticket before these passengers board the bus. If the number of passengers exceed five then they will be boarded and the conductor will issue the tickets whilst the bus is on the move. We presume what you mean by junction is bus halts. If as you have stated the buses on routes 155 and 187 are stopping for 10-15 minutes at bus halt, you can make a written complaint to the Deputy General Manager (Operations), Sri Lanka Transport Board, 200, Kirula Road, Narahenpita, Colombo 5. Tel. 2505407, Fax 2505408.

Revised assessable income tax exemption of WHT

Question: My wife and I are senior citizens and retired government servants. We receive a pension of Rs. 14,000 and 12,000 respectively per month. My investment income from finance companies is Rs. 172,000 per year. My wife receives Rs. 46,700 investment interest from finance companies per year.

Having disclosed above details I would like to know whether I can claim exemption of WHT.

A. Amarasinghe, Kandy.

Answer: Your pension does not come into taxable income. If you have no other income or any assessable income less than Rs. 300,000 per annum including the interest income from the finance company as stated by you, then you are exempted from the Withholding Tax (WHT) on your interest income which is less than Rs. 300,000 per annum. Your wife's income will be treated as a separate individual and you don't have to combine the income of your wife with that of yours. From the discloser made by you neither you nor your wife have to pay WHT. However, each one of you need to make a declaration to the financial institution that you are not liable for WHT as your assessable income per year is less than Rs. 300,000.

W&OP pension after re-marriage

Question: My husband died after eight years of our marriage. He was attached to a Government Department and I am drawing a monthly pension which I was entitled after his death.

Please advise me whether I could continue to draw my pension if I decide to get married again.

I shall be much thankful if I could have your kind reply through your valuable contribution in the Daily News.

Mrs. Manel de Silva - by fax

Answer: Unfortunately you cannot have both. As such you have to choose between your re-marriage and your late husband's W&OP. The law is that one has to forego the W&OP if he or she gets married again. It is an offence if you don't inform the Pensions Department once you register your marriage. A widow or a widower ceases to be a widow or widower once they get marries again legally.

Loss of motorcycle driving licence

Question: I lost my motorcycle driving licence and wrote to the Commissioner of Motor Traffic through the Provincial Secretary, Hikkaduwa on September 11, 2008 requesting a duplicate licence.

A reminder dated 16.01.2009 was sent under registered cover No. 0842 of 16.01.2009 but no reply has been received.

It also has to be mentioned that I am a 76-year-old retired government servant and cannot stand distant travelling owing to an ailment. I forward herewith photostat copies of temporary Driving Licence No. A 637796 of 2008.09.11 and receipt No. C 004754 issued by the Provincial Secretary. I shall be grateful to you if you would please help me to obtain a duplicate driving licence.

P. K. S. de Silva, Ambalangoda.

Answer: We contacted the Department of Motor Traffic and the good news for you is that your licence would have been already sent to you by registered post and if not will be posted to you soon. A priority note has been sent on behalf of your application probably due to your reminder letter. Your licence being very old, there are no computer records and as such had to be sent to Werahera for search from the manual records in the old registers. Your new licence No. is A021226629.

Tax free interest for senior citizen

Question: I am a retired 70-year-old government pensioner. All my savings have been invested in the National Savings Bank - the annual interest of which is less than Rs. 300,000. I have now been informed that some family belongings are to be sold and that my share would come to about Rs. 400,000. I intend putting whatever I get also in the NSB in which case my annual interest income will exceed Rs. 300,000 the tax free amount.

As a senior citizen, is Rs. 500,000 the tax limit for me or will I have to pay income tax on any amount above Rs. 300,000.

Enid Pieris, Nawala.

Answer: Your pension does not come into the taxable income category. As per your question it appears that you have no other assessable income other than your pension and interest income from the NSB.

In this case you are already enjoying interest income up to rs. 300,000 per annum from NSB. Yes if you invest the additional Rs. 400,000 which you are likely to get and if you invest that amount also at the NSB, your annual interest income up to Rs. 500,000 per annum will be free of withholding tax. For your information and that of the public it is no longer restricted to NSB only but also the Peoples Bank, Bank of Ceylon, State Mortgage Bank, Housing Development Finance Corporation Bank, SME-Bank, Regional Development Bank and Lanka Puthra Development Bank are allowed to provide the privilege of up to Rs. 500,000 Tax (WHT) free interest to senior citizens whose total assessable income is less than Rs. 300,000 per annum. A declaration to this effect has to be made to your bank.

Tax liability on profit on sale of land

Question: I sold a land which I owned for over 18 years. I have declared that amount in my tax returns. Please inform whether I will be liable to any tax for the profit, if I buy a new apartment from Colombo for our residence.

Fonseka, Ja-Ela.

Answer: If possible please refer to the 'OPA at Your Service Page' (page 15) of the Daily News on Thursday, May 21. The first question 'Tax on sale of Property'.

There is no longer a capital gains tax which has been abolished for some years now. Therefore, you are not liable to any tax on the profit you made on the sale of your land.

There is no tax implication either on your proposed plan to purchase an apartment for your residence. However, if the purchase price exceeds your sale proceeds from the land, the tax dept. may call on you to explain how you (from what source) you finance the balance amount. Those who buy and sell land or property on a regular basis or as a business need to pay the relevant taxes.

EPF/ETF claims

Question: I was employed at Golden Key Eye Hospital Ltd., Rajagiriya for a period of 17 months from 1st August 2007 up to 8th January, 2009 and had to leave at the request of the management due to reduction of force. I contributed to the EPF and monthly deductions were made by the management.

I submitted my EPF and ETF claim forms for certification to my employers on 16th January, 2009, but up to date, I have not received the claim forms with their certification to be submitted to the EPF and ETF. It is now four months.

I understand the delay is due to the fact that the hospital management has not remitted our contributions to the EPF and ETF authorities.

Please let me know what action I can take to recover my contributions from the EPF/ETF.

M. Riza Amidon, Ragama.

Answer: We suggest that you go to the District Labour Office for Colombo West, at the Labour Secretariat, Kirula Road, Narahenpita and meet the Asst. Commissioner of Labour in charge of the Colombo West-district. He will direct your employer to certify the forms and forward it. If not the Asst. Commissioner will take necessary action and advice you of the action taken.

It is a serious offence for any employer not to remit the EPF and ETF contribution. They will be called upon to pay a penalty as well for not remitting on time.

Budgetary relief allowance of Workers Act, No. 36, of 2005

Question: As per the above Act which is effective from 01.08.2005, those whose total salary is less than 20,000 p.m. are entitled for the said allowance of Rs. 1,000.

Please advise me through your valuable 'Questions and answers' page whether an annual increment of Rs. 1,000 could be treated as budgetary relief allowance and can be set off against the said allowance or it should be payable if the monthly salary of the employee is less than 20,000 even with the usual annual increment.

Murai, Colombo.

Answer: According to our understanding if the employee whose salary is less than Rs. 20,000 on 01.08.2005 has been granted a salary increase of an increment of not less than Rs. 1,000 any time after October 2004, there was no requirement to pay an additional Rs. 1,000. Even annual increments can be set of against the Rs. 1,000 allowance.

If this annual increment of Rs. 1,000 you are referring to was paid after October 2004 it can be set off against this budgetary relief allowance.