65. Resident company entitled to deduct tax from any dividend

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

(1)

Every resident company, other than a unit trust or mutual fund approved by the Securities and Exchange

Commission of Sri Lanka, shall deduct from the amount of gross dividend payable to any shareholder, other than—

(a)

any company or body of persons which is exempt from income tax under paragraph (a) or paragraph (c) of section 7;

(b)

any unit trust or mutual fund approved by the

Securities and Exchange Commission of Sri Lanka.

in the form of money or an order to pay money out of profits on which the taxable income of that company is computed for any year of assessment, income tax equal to ten per centum :

Provided however, income tax under this subsection, shall be deducted from the amount of any gross dividend payable out of profits and income of such company, whether such profits and income are chargeable with income tax or not, excluding any dividend received from another company after deduction of income tax under subsection (1) or under this subsection, and any dividend which is exempt under seciton 10.

The “amount of gross dividend” in relation to any dividend received from another company shall be such amount of the dividend received.

(2)

Every person who issues a warrant, cheque or other order drawn or made in payment of any dividend which becomes payable by a resident company during any year of assessment, shall annex thereto a statement in such form as may be specified by the Commissioner-General setting out–

(a)

the gross amount which after deduction of income tax thereon, corresponds to the net amount actually paid;

(b)

the sum deducted as income tax;

(c)

the net amount actually paid;

(d)

the composition of the gross dividend indicating separately the amount paid out of—

(i)

exempt dividends received;

(ii)

other dividends received ;

(iii)

income exempt from or not chargeable with income tax;

(iv)

other profits and income.

(3)

Where for any year of assessment the assessable income of a person other than a company includes a dividend from a resident company in the form of shares or debentures, he shall be entitled to deduct from the tax payable by him an amount equal to an amount which the company would have been entitled under subsection (1) to deduct as tax on such dividend, had such dividend been paid in the form of cash.

Read on from s 66

Chapter XI