The Assistant Treasurer has released a discussion paper on the design and scope of the 50 per cent tax discount for interest income received by individual taxpayers announced last year.

In 2012-13, individuals will be entitled to a tax discount equal to 50 per cent on up to $500 of interest income received. From 1 July 2013, individuals will be entitled to a tax discount equal to 50 per cent on up to $1,000 of interest income received each year.

The discount will apply to interest received from deposits held with any bank, building society or credit union, as well as interest on bonds, debentures and annuity products.

The closing date for submissions is 5 August 2011.