Income Tax Income tax is charged on the basis of the provisions of the Inland Revenue Act No. 10 of 2006 as amended by Inland Revenue Amendment Acts No. 10 of 2007, 9 of 2008 and 19 of 2009. The Inland Revenue Act provides the legal authority to charge, levy and collect income tax on the profits and income of every person, which arose or is arising to such person for every year of assessment commencing on or after 1st of April, 2006. 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 profits and income, arising or derived from Sri Lanka.
Returns
Return of Income Tax (IT) should be furnished on or before 30th day of the month of November that end of relevant assessment year. Returns should be submitted to Relevant Branch
Payment of Tax
IT is payable on self assessment basis in five installments.
- 1st Installment - on or before the 15th day of the month of August that relevant year
- 2nd Installment - on or before the 15th day of the month of November that relevant year
- 3rd Installment - on or before the 15th day of the month of February that next year
- 4th Installment - on or before the 15th day of the month of May that next year
- Final Payment - on or before the 30th day of the month of September that next year
Discount on Income Tax payable by Individuals
Any individuals who makes any quarterly self-assessment income tax payment, one month before the due date, is entitled to a 10% discount thereon (not exceeding such percentage on the instalment based on the current year profits).
Personal income tax is applicable on salaries, rent, small businesses and earnings from self employment. An annual income of Rs. 300,000 is exempted from this tax. The income exceeding this limit is taxable at rates ranging from 5 percent to 35 percent, under different slabs.
Income Tax Slab in Sri Lanka
|
Amount
|
Tax Rates
|
|
Up to LKR300,000
|
5%
|
|
LKR300,000 - LKR500,000
|
10%
|
|
LKR500,000 - LKR700,000
|
15%
|
|
LKR700,000 - LKR900,000
|
20%
|
|
LKR900,000 - LKR1,100,000
|
25%
|
|
LKR1,100,000 - LKR1,600,000
|
30%
|
|
Over LKR1,600,000
|
35%
|
Note: LKR is Sri Lankan Rupee
Last Updated on: 19-05-2010
