Laws
Inland Revenue Act 2006
Chapter XXXI
s 216

As enactedVersion · As enacted

EnglishSinhala · සිංහල, official PDF on documents.gov.lk Tamil · தமிழ், official PDF on documents.gov.lk

Contents

Inland Revenue Act 2006

Find in this Act

1Short title

IImposition of Income Tax

2Imposition of income tax

IIIncome Chargeable with Tax

3Income chargeable with Tax
4Profits from employment
5Net annual value of land and improvements thereon or of any place of residence
6Profits or income arising from rents of land and improvements thereon

IIIExemption from Income Tex

7Exemptions from income tax of certain persons (other than individuals) on the whole or any part of their profits and income
8Exemption from income tax of certain profits and income of certain officers and employees
9Exemption from income tax of certain interest received
10Exemption from income tax of certain dividends
11Exemption from income tax of certain profits and income from lands and improvements thereon
12Exemption from income tax of certain subsidies
13Miscellaneous exemptions from income tax
14Exemption of certain profits and income of any resident guest
15Exemptions of profits and income derived from outside Sri Lanka
16Exemption from income tax of profits and income from agricultural undertaking
17Exemption from income tax of the profits and income of any company from any specified undertaking
18Exemption from income tax of certain undertakings for infrastructure development
19Exemption from income tax of small scale infrastructure undertakings
20Exemption of the profit and income of any new industrial undertaking
21Exemption of profits and income of any relocated undertaking
22Exemption from income tax of any company engaged in research and development
23Exemption from income tax of any venture capital company
24Exemption from income tax of any person engaged in the business of providing Manor Houses or Thematic Bungalows to tourists

IVAscertainment of Profits or Income

25Deductions allowed in ascertaining profits and income
26Deductions not allowed in ascertaining profits and income
27Deduction of head office expenses incurred by any non resident company

VAscertainment of Total Statutory Income

28Basis for computing statutory income
29Apportion ment of profits
30Total statutory income
31Aggregation of the total statutory income of a child with that of his parent

VIAscertainment of Assesable Income

32Deductions from total statutory income in arriving at assessable income

VIIAscertainment of Taxable Income

33Taxable Income
34An allowance in respect of qualifying payments

Chapter VIII

35Rates of income tax on persons other than companies

IXSpecial Provisions Relating to the Taxation of Certain Profits and of Dividends Out of Such Profits

36Special provision relating to taxation of interest on compensation payable in respect of property vested in the Government, the Land Reform...
37Deduction of income tax from interest payable on certain deposit accounts
38Rates of income tax on the gross interest on loans granted by a company, partnership or other body of persons outside Sri Lanka
39The rate of income tax on royalty payable to any company partnership or other body of persons outside Sri Lanka
40The rate of income tax on profits from employment, for a specified period of a non-citizen employed in Sri Lanka
41Rate of income tax on profits and income of any foreign currency banking unit arising from any off-shore foreign currency transaction
42Rate of income tax on profits and income arising in Sri Lanka to the consignor or consignee from certain exports
43Rate of income tax on profits and income arising from certain undertaking approved by Minister
44Rate of income tax on sale of any share or a warrant
45Rates of income tax on profits from certain undertakings carried on by a person other than a company
46Rate of income tax on profits from certain undertakings carried on by a company
47Rate of income tax applicable to specialized housing banks
48Rate of income tax applicable to certain companies after the expiry of tax exemption
49Rate of income tax on dividends paid out of profits taxed in accordance with section 46
50Rate of income tax on qualified export profits and income of person not being a company, who commenced to carry on any specified undertaking
51Rate of income tax on qualified export profits and income of a company which commenced to carry on any specified undertaking
52Rate of income tax on qualified export profits and income of a company which carries on any specified undertaking
53Rate of income tax on dividends out of exports profits and income
54Rate of income tax on certain dividends
55Rate of income tax on dividend received from outside Sri Lanka
56Rate of income tax on deemed exports of any person or partnership
57Rate of income tax on profits and income from services rendered outside Sri Lanka by any resident company or partnership
58Rate of tax on profits and income from the supply of certain services to garment exporters
59Rate of tax on profits from transshipment agency fees
60Interpretation

XCompanies

61Income tax to which any resident company is liable
62Income tax to which any non-resident company is liable
63Certain dividends not to form part of the assessable income of the receiving company
64Profits of a company from transactions with its shareholders
65Resident company entitled to deduct tax from any dividend
66Certain undistributed profits to be treated as distributed
67Provisions applicable where the profits and income of a company are appropriated by the director & c. of that company
68Provisions of this Chapter not to apply to charitable institutions etc.

XISpecial Cases a – Children

69Assessment of child’s income
70Returns to be furnished by receiver and trustee and their liability to tax
71Chargeability to tax of trustee of an incapacitated person
72Liability of executor to tax payable by deceased person
73Return to be furnished by executor and chargeability of an executor and beneficiary
74Joint trustees and executors
75Every unit trust deemed to be a company
76Assessment of partnership income
77Assessment to be made in the name of the partnership in certain circumstances
78Tax chargeable on partnerships
79What constitutes residence
80Chargeability of certain profits of non resident persons
81Persons assessable on behalf of a non-resident person
82Liability of certain non-resident persons
83Profits of certain businesses to be computed as a percentage of the receipts
84Profits of non-resident person from sale of exported produce
85Liability to income tax of certain profits of non-resident person
86Exemption from income tax of non-resident persons in certain cases and liability of certain non-resident persons to income tax at reduced rates
87Profits of non-resident shipowners or charterers
88Master of ship to be an agent
89Refusal of clearance for ship where income tax is in arrears
90Profits of non-resident owners or charterers of aircraft
91Application of subsection (2) of section 87, section 88, and section 89, to profits of non-resident owners or charterers of any aircraft
92Ascertainment of profits of insurance companies
93Interest on certain loans deemed to be profits and income
94Certain royalties deemed to be profits and income
95Deduction of income tax from interest, & c, payable to persons outside Sri Lanka
96Deduction of income tax from payment made to any foreign entertainer or artiste
97Effect of agreements for double taxation relief
98Relief in respect of Sri Lanka income tax
99Applicability of provisions relating to particular sources of profits or income
100How certain receipts of insurance are to be treated
101Ascertainment of income of clubs, trade associations etc.
102Profits and income of non governmental organisations to be chargeable with income tax
103Certain transactions and dispositions to be disregarded
104Profits and income or loss from transactions between associated undertakings to be determined having regard to the arm’s lengthprice
105Ascertainment of profits and income from business of petroleum exploitation under a Petroleum Resources Agreement

Chapter XII

106Returns and information to be furnished
107Audit reports to be furnished by partners etc.
108Returns and other documents to contain the national identity card number or passport number
109Returns to be furnished of income received on account of or paid to other persons
110Occupiers to furnish returns of rent payable
111Return of lodgers and inmates
112Power of Commissioner-General to impose penalty for failure to furnish return

XIIIPayment of Tax by Self-Assessment

113Payment of tax by self assessment

XIVDeduction of Income Tax from Remuneration of Employees by Employers

114Employers to deduct income tax
115Employers to give notice to Commissioner-General
116Application of income tax tables
117Deduction of tax at special rates
118Directions to employers
119Employers to maintain proper records
120Duties of employer following deduction of income tax
121Adjustments of amount of income tax not paid or paid in excess
122Employee to give notice when necessary deductions are not made
123Income tax deducted not to form part of assets of employers
124Default in the deduction or payment of income tax
125Issue of assessments on employers
126Appeals
127Penalty for default
128Penalty on default
129Credit for tax paid
130Compliance with the provisions of this Chapter relating to forms
131Interpretation

XVProvisions Relating to the Payment of Income Tax by a Government Institution

132Payment of income tax by a Government institution of its employees

XVIDeductions from Interest Paid by Banks and Financial Institutions

133Banks and financial institutions to deduct income tax
134Deducting tax from interest on securities, treasury bonds etc,
135Companies issuing corporate debt securities to deduct income tax
136Credit for tax deducted
137A notional tax credit on secondary market transactions
138Refund of income tax paid on interest liable to withholding tax
139Issue of directions where deductions are made under sections 133 or 136
140Duties of bank and financial institution following deductions of income tax
141Penalty for tax avoidance
142Default in the deduction of income tax
143Issue of assessments on banks and financial institutions
144Appeals
145Penalty for default
146Penalty and interest on default
147Interpretation
148Person or Partnership chargeable with income tax
149Registred co-operative societies deemed to be companies
150Registration of banks and financial institutions

XVIIDeduction of Income Tax from Specified Fees Paid by Specified Persons

151Registration of specified persons
152Registration of persons liable to deduct tax from rent, lease rent or other similar payments
153Specified persons to deduct income tax from specified fees
154Provisions of Chapter XVI to apply in relation to the deduction under this Chapter of income tax from specified fees

Chapter XVIII

155Persons paying rent, lease rent etc. to deduct income tax
156Application of the provisions of Chapter XVI to this Chapter

Chapter XIX

157Government institution paying rewards or fines or other person or partnership paying lottery prizes etc. to deduct income tax
158Provisions of Chapter XVI to apply in relation to any deduction under this Chapter
159Registration of persons conducting lotteries or betting or gambling activities

XXDeduction of Income Tax from Any Annuity or Royalty Paid or Any Management Fee Paid or Similar Payment Made by Any Person or Partnership

160Persons paying annuity, royalty, management fee or similar payment to deduct income tax
161Application of the provisions of Chapter XVI to this Chapter

XXIRetention of Moneys in Certain Provident Funds

162Retention of fifteen per centum of moneys lying to the credit of a contributor to a specified provident fund, to meet any tax payable

XXIIAssessments

163Assessments and additional assessments
164Notice of Assessment

XXIIIAppeals A-Appeals to the Commissioner-General

165Appeals to the Commissioner-General
166Constitution of the Board of Review
167Appeals to the Board of Review
168Commissioner-General may refer appeals to the Board of Review
169Hearing and determination of appeals by the Board of Review
170Appeal on a question of law to the Court of Appeal

XXIVFinality of Assessments and Penalty for Incorrect Returns

171Assessments or amended assessments to be final
172Penalty for incorrect return

XXVTax in Default and Sums Added Thereto

173Tax in default and sums added thereto
174Punishment for tax in default

XXVIRecovery of Tax

175Tax to include fines etc.
176Tax to be a first charge
177Notice to defaulter
178Recovery of tax by seizure and sale
179Proceedings for recovery before Magistrate
180Recovery of tax out of debts & c
181Transfer of immovable property to Government in lieu of payment of tax in cash
182(1) The Commissioner-General may, by notice in writing given to any employer of an employee or to the person responsible for the payment of...
183Where for any year of assessment the statutory income of any person who is a partner in a partnership includes his share of the divisible p...
184Recovery of income tax from the income of a child
185Recovery of income tax payable by a beneficiary from the trustee
186Recovery of income tax payable by a beneficiary from the executor
187Gift tax to be recovered from the donee in certain circumstances
188Recovery of tax from persons leaving Sri Lanka
189Use of more than one means of recovery
190The Commissioner-General may by notice given in writing to any person, require that person within the period specified in such notice, to f...
191Power of Commissioner-General to obtain information for the recovery of tax
192Delegation of Commissioner-General’s powers and functions
193Action not to commence after expiry of five years in certain circumstances

XXVIIMiscellaneous

194Signature and service of notice
195Validity of notices, assessments etc.
196Precedent partner to act on behalf of a partnership
197Principal officer to act on behalf of company or body of persons
198Any act or thing required by or under this Act to be done by any person shall, if such person is an incapacitated or non-resident person, b...
199Who may act for incapacitated or non-resident person

XXVIIIRepayment

200Tax paid in excess to be refunded
201Interest payable on the amount of a refund in certain circumstances

XXIXPenalties and Offences

202Penalties for failure to make returns making incorrect returns &c
203Breach of secrecy and other matters to be offences
204Penal provisions relating to fraud &c
205Tax to be payable notwithstanding any prosecution or conviction for an offence under this Act
206Prosecution to be with the sanction of the Commissioner-General
207Admissibility of statements and documents in evidence

XXXAdministration

208Officers
209Official Secrecy
210Inland Revenue Incentive Fund
211Commissioner-General may pay rewards to informants

XXXIGeneral

212Regulations
213Forms
214Power to search buildings or places
215Power to search business premises
216Sinhala text to prevail in case of inconsistency

XXXIIInterpretation

217Interpretation

XXXIIIApplication of the Inland Revenue Act…

218Application of the Inland Revenue Act…

Schedules

FIRST SCHEDULE [Section 35 and section 40] Rates of Income Tax-Individuals other than any Receivers, Trustees, Executors or Liquidators PAR...
SECOND SCHEDULE [Section 61 & 75] Rates of Income Tax - Companies The rate of income tax for every year of assessment commencing on or afte...
THIRD SCHEDULE [Section 35] Rates of Income Tax - Persons Other than Individuals to whom the First Schedule Applies, and Companies 1. Hindu...
FOURTH SCHEDULE [Section 95] Rates of Deduction of Income Tax from Interest, Rent, Ground Rent, Royalty or Annuity Paid or Credited to any...
FIFTH SCHEDULE The rate of tax chargeable in respect of the company concerned The following rates shall be applicable notwithstanding the r...

Inland Revenue Act 2006 · As enacted · Chapter XXXI · General

216. Sinhala text to prevail in case of inconsistency

Official English translation. The Sinhala text prevails. Open the official Sinhala text, official PDF on documents.gov.lk

Official translationFrom Department of Government Printing, unchanged

In the event of any inconsistency between the Sinhala and Tamil texts of this Act, the Sinhala text shall prevail.

Chapter XXXII

Interpretation

Read on from Chapter XXXII

Chapter XXXIII

Application of the Inland Revenue Act…

Read on from Chapter XXXIII

Schedules

Details

Inland Revenue Act 2006 · s 216

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Judgments that cite this Act

144 in all

Lasith Malinga v. The Commissioner General of Inland Revenue (CA/TAX/15/2019)
South Asia Gateway Terminal (Private) Limited v. Commissioner General of Inland Revenue (CA/TAX/010/2022, CA/TAX/011/2022)
The Commissioner General of Inland Revenue v. Seylan Development PLC (CA/TAX/0010/2014 with CA/TAX/0013/2014)

Where this comes from

Department of Government Printing · Inland Revenue Act 2006, As enacted. Reader record updated on 9 Oct 2026.

Open the official text