Inland Revenue Act 2017 · As enacted · Part I
19. Business or investment losses
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 calculating the income of a person from a business for a year of assessment, the following shall be deducted:–
an unrelieved loss of the person for the year from any other business; and
an unrelieved loss of the person for any of the previous six years of assessment from the business or any other business.
The person may choose the income calculation or calculations in which an unrelieved loss or part of the loss is deducted. However, where a loss can be deducted under subsection (1) it shall be deducted.
Notwithstanding the provisions of subsections (1) and (2), where a person makes a loss and if the loss were a profit it would be taxed at a reduced rate, the loss shall be deducted only in calculating income taxed at the same reduced rate, a lower reduced rate or exempt amounts. If the loss were a profit and the profit would be exempt, the loss shall be deducted only in calculating exempt amounts.
The provisions of subsections from (1) to (3) shall subject to the provisions in subsection (5), apply to calculating income from an investment and unrelieved losses from an investment so that –
unrelieved losses from a business may be deducted in calculating income from an investment;
unrelieved losses from an investment shall be deducted only in calculating income from an investment.
Subject to section 194, a gain from the realisation of an investment asset shall not be reduced by any loss on the disposal of another investment asset.
In this section –
“loss” of a person for a year of assessment from a business or investment shall be calculated as the excess of amounts deducted in accordance with this Act (other than under this section or subsection (5) of section 25) in calculating the person’s income from the business or investment over amounts included in calculating that income; and
“unrelieved loss” means the amount of a loss that has not been deducted in calculating a person’s income under this section or subsection (5) of section 25.