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Income Tax (IT)
Income Tax (IT)
Income tax is charged on the basis of the provisions under the Inland Revenue Act, No. 24 of 2017 as amended by the Inland Revenue (Amendment) Act, No. 10 of 2021. 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 :
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Employment Income
- Calculation of an individual's gains and profits from employment for a year of assessment
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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.
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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.
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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 each year of assessment prior to January 1, 2020;
- Rs. 3,000,000, for each year of assessment commencing on or after January 1, 2020
except that an individual who is a trustee, receiver, executor or liquidator shall not be entitled to deduct this personal relief as such trustee, receiver, executor or liquidator, and the relief shall not be deducted against gains from the realisation of investment assets.
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) Return/ Statement of Estimated Tax payable (SET)
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Due Date for Furnishing SET:
- On or before 15th day of the month of August of the current year of assessment
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Due Date for Furnish Returns :
- On or before 30th day of the month of November, of the next succeeding year of assessment.
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Submit to :
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