4. Amendment of section 46 of the principal enactment

Section 46 of the principal enactment is hereby amended by the insertion immediately after subsection (3)

of that section, of the following new subsection: -

“(3A) Where a person realises an asset by way of transfer of ownership of the asset as a gift or donation to the Government of Sri Lanka or any University which is established or deemed to be established under the Universities Act, No. 16 of 1978, the person shall be treated as deriving an amount in respect of the realisation equal to the net cost of the asset immediately before the realisation.”.

Amendment of section 52 of the principal enactment

5.

5. Section 52 of the principal enactment is hereby amended by the addition immediately after subsection (3) of that section, of the following new subsection: -

“(4) Where the deduction of any qualifying payment referred to in items (i)

and (v) of sub-paragraph (b) of paragraph 1

of the Fifth Schedule, in terms of subsection (1) of this section, is not possible, for any year of assessment commencing on or after

April 1, 2025, due to the reason that the total assessable income in the relevant year of assessment does not exceed the amount of the qualifying payment which shall be deducted in arriving at the taxable income of an individual or an entity, such amount of the qualifying payment which is not possible to be deducted in the relevant year of assessment shall be carried forward and deducted from the assessable income of the individual or entity of the year of assessment immediately succeeding the relevant year of assessment or from the assessable income of any consecutive year succeeding.”.

Insertion of new section 52A in the principal enactment

6.

6. The following new section is hereby inserted immediately after section 52 of the principal enactment, and shall have effect as section 52A of that enactment: -

52A. (1) Notwithstanding anything to the contrary in this Act, in calculating the assessable income of an individual for a year of assessment under section 4, any amount received or derived by an individual under a life insurance policy, whether as the policy holder or as a beneficiary of such policy, upon-

the death of the insured person;

the maturity of the policy; or

the surrender of the policy, shall be excluded.

Subsection (1) shall not apply to the following payments made in connection with or under a life insurance policy: -

any amount received under a life insurance policy, which constitutes employment income or business income; or

any annuity, or any pension, retirement or superannuation payment or any payment made under a life insurance policy otherwise than on the death of the insured person or maturity of the policy.

Nothing in this section shall limit or affect the application of section 35.

For the purposes of this section,

by the insertion immediately after subsection (1) of that section, of the following new subsection: -

in subsection (2) of that section, by the substitution for the word and figure “subsection (1)”, of the words and figures “subsection (1) or (1A)”.