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Income Tax (IT)

Income tax is charged on the basis of the provisions under the Inland Revenue Act, No. 24 of 2017. The Inland Revenue Act provides the legal authority to charge, levy and collect income tax on the gains and profits of every person, which arose or is arising to such person for every year of assessment commencing after 1st of April, 2018.

Sources of Income :
  • Employment Income
    • Calculation of an individual's gains and profits from employment for a year of assessment
  • Business Income
    • A person's income from a business for a year of assessment is the person's gains and profits from conducting the business for the year.
  • Investment Income
    • A person's income from an investment for a year of assessment is the person's gains and profits from conducting the investment for the year.
  • Other Income
    • A person’s income from other sources for a year of assessment is the person’s gains and profits from any source of any kind, however does not include profits of a casual and non-recurring nature.

In respect of a person who is deemed to be resident in Sri Lanka is chargeable with income tax in respect of his income from Sri Lanka and income derived by him from outside Sri Lanka. The liability to income tax therefore extends to his global income. A person who is deemed to be non-resident in Sri Lanka is chargeable with income tax in respect of only the gains and profits, arising or derived from Sri Lanka.​​

An individual, who is a resident in Sri Lanka for a year of assessment or who is a non- resident in Sri Lanka for a year of assessment, but is a citizen of Sri Lanka, will receive an aggregate relief of Rs 500,000 for that year of assessment.

Payment of Tax

Income Tax is payable on self-assessment basis, a person who is an “instalment payer” shall pay tax by quarterly instalments.

Installment Payment Date
1st Installment On or before the 15th day of the month of August, of that year of assessment
2nd Installment On or before the 15th day of the month of November, of that year of assessment
3rd Installment On or before the 15th day of the month of February, of that year of assessment
4th Installment On or before the 15th day of the month of May, of the next succeeding year of assessment
Final Installment On or before the date that is after six months end, of that year of assessment
Furnishing Income Tax (IT) Returns
  • Due Date for Furnish Returns :
    • On or before 30th day of the month of November, of the next succeeding year of assessment.
  • Submit to :
    • The relevant Inland Revenue Metropolitan/Regional Office in the Area nearby.
    • Central Document Management Unit (CDMU), 2nd Floor (North Wing) of Inland Revenue building​​​​​​​​​

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Last updated: 17-04-2019