Sri Lanka tax payers to get relief for shares, housing interest, pensions, education

ECONOMYNEXT – Sri Lanka’s personal income tax payers will get relief up to 1.2 million rupees a year for investments in stocks and securities, housing interest, pension contributions, medical insurance and children’s education incurred within the country, the revenue office has said.

Resident tax-payers and citizens abroad are also getting 3.0 million rupees of tax relief on all earnings, as part of tax cuts announced in December 2019, a notice by Sri Lanka’s Inland Revenue Department said.

Individuals will be taxed at 6 percent for the next 3.0 million rupees, 12 percent for the next 3.0 million and 18 percent on the balance.

Interest on foreign currency deposits will also be exempt from tax.

A notice by Sri Lanka’s Inland Revenue Department said terminal pension and gratuity payments up to 10 million rupees will be free from tax. The next 10 million rupees will be taxed at 6 percent, and the balance 12 percent.

Withholding tax and Pay-As-You-Earn (PAYE) on salaries, dividends, interest, discount, natural resource payment, rent, royalty, premium or retirement payment is no longer subject to withholding tax.

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But they will have to open an income tax file and report income quarterly.

“Those who have not registered for tax are required to register with IRD for this purpose,” the tax office said.

The tax changes had not been introduced to parliament yet. (Colombo/Feb13/2020-SB)