Inland Revenue Act 2017 · As enacted · Part I
5. Employment income
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
An individual’s income from an employment for a year of assessment shall be the individual’s gains and profits from the employment for that year of assessment.
In calculating an individual’s gains and profits from an employment for a year of assessment the following amounts received or derived by the individual during the year of assessment from the employment shall be included:-
payments of salary, wages, leave pay, overtime pay, fees, pensions, commissions, gratuities, bonuses and other similar payments;
payments of personal allowance, including any cost of living, subsistence, rent, entertainment or travel allowance;
payments providing discharge or reimbursement of expenses incurred by the individual or an associate of the individual;
payments for the individual’s agreement to conditions of employment;
payments for redundancy or loss or termination of employment;
subject to paragraph (f) of subsection (3), retirement contributions made to a retirement fund on behalf of the employee and retirement payments received in respect of the employment;
payments or transfers to another person for the benefit of the individual or an associate person of the individual;
the fair market value of benefits received or derived by virtue of the employment by an individual or an associate person of the individual;
other payments, including gifts received in respect of the employment; and
the market value of shares at the time allotted under an employee share scheme, including shares allotted as a result of the exercise of an option or right to acquire the shares, reduced by the employee’s contribution for the shares.
In calculating an individual’s gains and profits from an employment for a year of assessment the following shall be excluded:-
exempt amounts and final withholding payments;
a discharge or reimbursement of expenses incurred by the individual on behalf of the employer;
a discharge or reimbursement of the person’s dental, medical or health insurance expenses where the benefit is available to all full-time employees on equal terms;
payments made to or benefits accruing to employees on a non-discriminatory basis that, by reason of their size, type and frequency, are unreasonable or administratively impracticable for the employer to account for or to allocate to the individual;
the value of a right or option to acquire shares at the time granted to an employee under an employee share scheme (referred to in paragraph (j) of subsection (2)); and
subject to conditions as may be specified by the
Commissioner-General, contributions made by an employer to an employee’s account with a pension, provident or savings fund or savings society approved by the Commissioner - General.