DEBENTURE TAX

New Zealand Times, Volume XLVII, Issue 10848, 14 March 1921, Page 4

DEBENTURE TAX

EFFECT OF NEW LAW TAX TO BE DEDUCTED FROM INTEREST COUPONS. COMMISSIONER EXPLAINS. Some doubt has existed a® to the effect which the new income tax will have upon holders of debentures. The exact nature of the imposition of the tax has puzzled not a few, and representations on the subject have been made to the Commissioner of Taxes. In an official explanation just issued the Commissioner give® some interesting details as to how the tax is to be levied. He states that the tax on debenture-interest is deductible from the interest coupons when thee© are presented for payment, at the rate of 2s 6d in the £. Debenture holders, whose income from all sources does not exceed £3OO, upon making a declaration to that effect, are, nowevwr, entitled to receive the interest without deduction of tax. Societies, trusts, institutions, and other bodies, the income of which is totally exempt from tax under section 84 of the Land and Income Tax Act, 1916, are also entitled to receive the interest without deduction, upon making a declaration that they are exempt. In the case of inscribed debenture stocks, holders may include the interest on their individual returns, instead of having the tax deducted. The maximum rate at which such interest will be assessed will be 2s 6d in the £. Refund will be made to any debentureholder whose total assessable income from all sources, as shown in his return, is of such amount as will carry a rate of less than 2s 6d in the £. Any debenture-holder entitled to a refund may, if he eo desire®, by arrangement with the local authority, ,include the debenture-interest in his return, of income.