17. Amendment of section 29 of the principal enactment

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

Section 29 of the principal enactment is hereby amended as follows :—

(1)

by the insertion immediately after subsection (1) of that section of the following subsection :—

“(1A)

The assessable income of a person (other than a company) for any year of assessment commencing on or after April 1, 2002, shall notwithstanding anything contained in

Inland Revenue (Amendment)

subsection (1), be his total statutory income for that year other than the —

(a)

statutory income from interest on which income tax has been deducted under section 122A; and

(b)

statutory income from dividends on which income tax has been deducted under subsection (1A) of section 61, whether received directly form such company which distributes the dividend or through any other company, subject to the deductions, specified in this section :

Provided however, where such income from interest or dividends from which income tax has been deducted under section 122A or subsection (1A) of section 61, as the case may be, have been received by a person in the course of carrying on any trade or business as a receipt from such trade or business, such income from interest or dividends shall form part of the total statutory income of such person.”;

(2)

in subsection (2) of that section —

(a)

by the substitution, in paragraph (a) of that subsection for the words “payable by such person”, of the words “payable for that year of assessment being a year of assessment commencing prior to April 1, 2002 by such person.”;

(b)

by the insertion, immediately after paragraph (a) of that subsection of the following :—

“(aa) sums paid by such person for any year of assessment commencing on or after

Inland Revenue (Amendment)

April 1, 2002 by way of an annuity, ground rent, royalty or interest not deductible under section 23 :

Provided that —

(i)

no deduction shall be allowed in respect of any sum paid by way of interest, annuity, ground rent or royalty by a person out of Sri Lanka to another person out of Sri

Lanka ;

(ii)

where for any year of assessment any such sum paid exceeds the total statutory income for that year, the excess shall be treated for the purposes of this section in the same manner as a loss incurred in a trade during that year;

(iii)

where any sum is paid by such person by way of an annuity no deduction shall be allowed in respect of such sum unless such annuity is —

(a)

paid under an order of court by way of payment of alimony or maintenance ;

(b)

paid to his spouse under a duly executed deed of separation;

(c)

in return, for full consideration in money or moneys worth.

For the purposes of this paragraph the term “interest” means any interest paid during any year of assessment on any loan obtained from a bank, financial institution or any other institution recognised by the Commissioner-General.”.

Inland Revenue (Amendment)

Read on from s 18