As enacted

Contents

30. Replacement of section 133 of the principal enactment

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

Section 133 of the principal enactment is hereby repealed and the following section is substituted therefor :–

133. (1) Where any bank or financial institution pays any interest on any sum of money deposited with it, such bank or financial institution shall, subject to the provisions of subsection (2), deduct income tax in accordance with the provisions of this section from the interest payable and such deduction shall be made at the appropriate rate specified in subsection (4) and at the time such interest is paid.

(2)

Where any sum of money (in this subsection referred to as the “first mentioned sum”) is paid to any bank or financial institution in return for any pledge in writing that such bank or financial institution shall pay to the bearer of the pledge not identified by name in such pledge, a sum of money which is in excess of the first mentioned sum (in this subsection referred to as the “stated sum”) at the time such pledge is presented for redemption or after such date as is stated in such pledge, such bank or financial institution shall deduct income tax on the excess of the stated sum over the first mentioned sum. The deduction shall be made at the rate of ten per centum of such excess and at the time the first mentioned sum is paid to such bank or financial institution.

“Banks and financial institutions to deduct income tax.

(3)

The deduction referred to in subsection (1) from any interest referred to therein shall not apply to any interest :—

(a)

of which the recipient is :—

(i)

any foreign government;

(ii)

the Consolidated Fund of the

Government of Sri Lanka: or

(iii)

any Provincial Fund of any

Provincial Council;

(b)

which is exempt from income tax under this Act; or

(c)

from which income tax is deductible under section 37 or section 96.

(4)

Where the recipient of the interest from which income tax is deductible under this section is :—

(a)

any partnership, company or body of persons other than any charitable institution, the deduction shall be made at the rate of ten per centum of such interest;

(b)

any charitable institution which tenders to the branch of such bank or financial institution with which the deposit is made, a declaration in writing in relation to any year of assessment that its assessable income for that year of assessment:—

(i)

does not exceed 300,000 rupees, no deduction shall be made from such interest payable to such charitable institution for that year of assessment; or

(ii)

exceeds 300,000

rupees, deduction shall be made from the interest payable to such charitable institution at the rate of ten per centum of such interest for that year of assessment;

(c)

any individual then, in relation to any year of assessment where such individual tenders to the branch of the bank or of the financial institution with which the deposit is made, a declaration in writing that for that year of assessment his assessable income :—

(i)

does not exceed 300,000 rupees, no deduction shall be made from such interest payable for that year of assessment;

(ii)

exceeds 300,000 rupees but does not exceed 600,000 rupees, deduction shall be made from such interest payable for that year of assessment, at the rate of two and a half per centum of such interest; and

(iii)

exceeds 600,000

rupees, deduction shall be made from such interest payable for that year of assessment on every sum of money deposited, at the rate of ten per centum of such interest;

(d)

any charitable institution which has not tendered the declaration referred to in paragraph (b) or any individual referred to in paragraph (c) who has not tendered the declaration referred to in that paragraph, as the case may be, deduction shall be made at the rate of ten per centum of such interest:

Provided that where such charitable institution or such individual maintains:—

(a)

one savings account, no deduction shall be made from interest paid for any month; or

(b)

more than one savings account, no deduction shall be made from interest paid for any month in respect of only one such account, where the interest paid is less than five thousand rupees.

For the purpose of this proviso,

“savings account” means an account, whether or not subject to any condition affecting the right to withdraw money therefrom and which bears interest at a rate not dependent on the period for which the deposit is maintained.

(5)

Where any interest payable to any person or partnership is credited to any account maintained by any bank or financial institution for or on behalf of such person or partnership, such interest shall be deemed to have been paid to such person or partnership, at the time such interest is so credited.

(6)

The interest payable by any bank or financial institution on any sum of money deposited with it jointly by two or more individuals, shall be apportioned among such individuals in accordance with the mandate given to such bank or financial institution in relation to the apportionment among such individuals of such sum or the interest thereon, and such part of the interest as is apportioned to any such individual, shall be deemed to be the interest payable to such individual on such part of such sum as is apportioned to him.

(7)

Every bank or financial institution which deducts income tax in accordance with the provisions of subsection (1) from any interest paid by it to any person or partnership, as the case may be, shall issue to such person or partnership a statement setting out the following particulars:—

(a)

the gross amount of the interest paid;

(b)

the rate of tax and the amount of tax deducted;

(c)

the net amount of interest actually paid; and

(d)

the period to which such interest relates.

(8)

(a) Where income tax is deductible by any bank or financial institution in accordance with this section, from the interest payable to any individual or charitable institution, such individual or charitable institution may, if the amount of income tax payable by him or it for any year of assessment, had the interest from which tax is deductible under this section been included in the assessable income of such individual or such charitable institution, as the case may be, for that year of assessment, is less than the income tax deductible for that year of assessment under this section, make an application to the Commissioner-General in such form and containing such particulars as may be specified by the Commissioner-General, requesting that a direction be issued to that bank or financial institution to make the necessary adjustments in the deduction of income tax for that year of assessment.

(b)

The Commissioner-General or any other officer authorized by the Commissioner-General may, on an application made by any individual or charitable institution under paragraph (a), issue to the bank or financial institution specified in such application, the necessary direction in writing (a copy of which shall be issued to the applicant) and such bank or financial institution shall comply with such direction :

Provided that any such direction issued, may be varied at any time.

(c)

Any individual or charitable institution who or which is not satisfied with a direction issued under paragaraph (b) in respect of any year of assessment may, within thirty days of the issue of such direction, appeal to the

Commissioner-General in writing setting out precisely the grounds of such appeal. The decision of the Commissioner-General on any appeal made to him under this paragraph, shall be final and conclusive:

Provided that the Commissioner-General shall on request made in writing by such individual or charitable institution, cause an assessment to be made under section 163 on such individual or charitable institution for that year of assessment, for the purpose of enabling such individual or charitable institution to prefer an appeal under section 165 against such assessment.

(d)

Every bank and financial institution shall:—

(i)

keep a proper record of the interest paid by it in any year of assessment to any person or partnership and the date or dates on which such interest is paid, in such manner as may be specified by the Commissioner-General ; and

(ii)

permit any officer authorized in writing by the Commissioner-General, to inspect any record maintained by it under sub-paragraph (i) .”.

Read on from s 31