49. Insertion of new Chapter XVIC in the principal enactment

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

The following new Chapter is hereby inserted immediately after Chapter XVIB of the principal enactment, and shall have effect as Chapter XVIC of that enactment :—

“Registration of persons conducting lotteries or betting or gambling activities.

Inland Revenue (Amendment)

“CHAPTER XVIC

DEDUCTION OF INCOME TAX FROM ANY ANNUITY OR ROYALTY PAID

OR ANY MANAGEMENT FEE PAID OR SIMILAR PAYMENT MADE BY ANY

PERSON OR PARTNERSHIP

132D.

Persons paying annuity, royalty, management fee or similar payment to deduct income tax

Notwithstanding anything to the contrary in any other law, where on or after

April 1, 2004 any person or partnership pays—

(a)

an annuity or royalty other than any such annuity or royalty referred to in section 90 ; or

(b)

any management fee or other similar payment, such person or partnership, as the case may be, shall deduct at the time of such payment of annuity, royalty, management fee or such other similar payment, income tax at the rate of —

(i)

ten per centum of the gross annuity or royalty paid; and

(ii)

five per centum of any management fee paid or any other similar payment made:

Provided however, that incase of any payment referred to in paragraph (a), the tax shall be deducted only where each such payment of annuity or royalty to any person or partnership is in excess of rupees fifty thousand in any month, or rupees five hundred thousand in any year.

132E.

Application of the provisions of Chapter XV to this Chapter

(1)

The provisions of Chapter XV relating to the deduction of income tax from interest paid by banks or financial institutions, credit for income tax so deducted, issue of

Inland Revenue (Amendment)

directions, duties of banks and financial institutions, default in the deduction of income tax, issue of assessments on banks and financial institutions and appeals and penalty for default, shall, mutatis mutandis apply to the deduction of income tax from such payments of any annuity, royalty, management fee or such other similar payment as is mentioned in section 132D, duties of persons or partnership making such payments of any annuity, royalty, management fee or similar payments, credit for income tax so deducted, issue of directions, default in the deduction of income tax, issue of assessments on such persons and appeals and penalty for default under this Chapter, as if there were substituted in Chapter XV for the words

“banks and financial institutions” of the words

“persons or partnerships liable to pay such annuity, royalty management fee or such similar payment” and for the word “interest” of the words “annuity, royalty management fee or such similar payment” wherever they appear in that

Chapter.

(2)

Any person or partnership who or which is liable to deduct income tax under this

Chapter on or after April 1, 2004, shall apply for and obtain a registration number from the

Commissioner-General thirty days prior to the commencement of such deduction of tax and shall furnish a return on a monthly basis containing such particulars as specified by the

Commissioner-General :

Provided that in respect of payments made during the period April 1, 2004 to September 30, 2004 such registration number shall be obtained on or before September 30, 2004.

Inland Revenue (Amendment)

(3)

Any person or partnership who or which does not so register or does not furnish any return, shall be liable to a penalty not exceeding rupees fifty thousand which may be imposed by the Commissioner-General.

(4)

Any person or partnership who or which is liable to deduct income tax under this

Chapter but has not deducted during the period

April 1, 2004 up to such date as may be determined by the Commissioner-General by notice published in that behalf, shall not be in default, if such person or partnership informs the Commissioner-General within thirty days of such date, full details of such payments made without tax deduction.”.

Read on from s 50