16. Amendment of section 90 of the principal enactment

Official English translation. Where it differs from the Sinhala or Tamil text, the Act itself says which text prevails.

Section 90 of the principal enactment is hereby amended as follows: -

(1)

in the formula setout in subsection (3) of that section-

(a)

in item ‘A’ of that formula, by the sub-stitution for the words and figures “is the current estimated tax payable un-der section 91 or 92 by the instalment payer for the year of assessment;”, of the following: -

“(a) for any year of assessment prior to April 1, 2026, is the estimated tax payable by the instalment payer under section 91 or 92; and

(b)

for any year of assessment commencing on or after April

1, 2026, is the amount of tax payable by the instalment payer with respect to the taxable income under paragraph (a)

of subsection (1) of section 2

in the immediately preceding year of assessment:

Provided however, where the instalment payer has no taxable income for the immediately preceding year of assessment, or expects to derive during the current year of assessment a taxable income lower than the taxable income of the immediately preceding year of assessment, the estimated tax payable for the current year of assessment shall be considered as ‘A’. For this purpose, the estimated tax payable for the current year of assessment shall be calculated as per the procedure, and on the basis, specified by the

Commissioner-General;”;

(b)

in item ‘C’ of that formula-

(i)

in paragraph (b) of that item, by the substitution for the words

“for the year; and”, of the words and figures “for any year of assessment prior to the year of assessment commencing on

April 1, 2026;”;

(ii)

by the insertion immediately after paragraph (b) of that item, of the following new paragraph: -

“(ba) tax withheld or to be withheld during the relevant year of assessment under

Division II, from payments received by the person that are included in calculating the person’s income for any year of assessment commencing on or after April 1, 2026;

and;”;

(iii)

in the proviso to paragraph (c)

of that item, by the substitution for the words

“Provided however, in calculating”, of the words and figures “Provided however, prior to the year of assessment commencing on

April 1, 2026, in calculating”;

and

(2)

by the addition immediately after subsection (5) of that section, of the following new subsection: -

“(6) In ascertaining the amount of tax payable by the instalment payer for a year of assessment commencing on or after April 1,

2026, such instalment payer may take into account the foreign tax credit to be claimed under section 80. However, in doing so, the instalment payer may take into account the foreign income tax only if the instalment payer has paid such tax or the instalment payer reasonably estimates that such tax will be paid during the period corresponding to that year of assessment.”.

Read on from s 17