Inland Revenue (Amendment) Act 2003 · As enacted
14. Replacement of section 122A of the principal enactment
Official English translation. The Sinhala text prevails. Open the official Sinhala text, official PDF on documents.gov.lk
Official translationFrom Department of Government Printing, unchanged
Section 122A of the principal enactment is hereby repealed and the following section substituted therefor :–
122A. (1) Every bank or financial institution shall, subject to the provisions of this Chapter, deduct at the time the interest is paid or credited, on any sum of money deposited with it –
paid.
by any person or partnership in his or its own name or in the name of any other person or without the name of any person or partnership, other than in any
Security or Treasury Bond issued under the Registered Stocks and Securities
Ordinance (Chapter 420), or Treasury
Bill issued under the Local Treasury
Bills Ordinance (Chapter 417), or
Central Bank Security issued under the
Monetary Law Act (Chapter 422) –
Where the interest paid or credited on such deposit is not less than six thousand rupees per month or not less than seventy two thousand rupees for a period of twelve months on such deposit on or after
April 1, 2002 but prior to January 1, 2003;
Where the interest paid or credited on such deposit which is not less than nine thousand rupees per month or not less than one hundred and eight thousand rupees for a period of twelve months, on such deposit, on or after January 1, 2003, income tax at the rate of ten percentum on the total amount of interest paid or credited on such deposit :
Provided however the provisions of this paragraph shall not apply in respect of an institution certified by the Commissioner-
“Bank or financial institution to deduct income tax on interest
General as a charitable institution, on any interest and discount which is not in excess of twelve thousand rupees a month or one hundred and forty four thousand rupees a year, paid or credited to such institution on all deposits or accounts held by such institution :
Provided further, that where a person or a partnership requests, to a bank or financial institution, in writing to deduct income tax at the rate of ten percentum from any interest paid or credited to such person or partnership on a sum of money deposited by such person or partnership with such bank or financial institution, then such bank or financial institution shall comply with such request, not withstanding that the amount of interest paid or credited does not exceed the amounts specified in the preceeding provisions and such deduction of tax shall be a deduction under section 122A ;
by any person or partnership in his or its own name or without the name of any person or partnership in any Security or
Treasury Bond issued under the
Registered Stocks and Securities
Ordinance (Chapter 420), or Treasury
Bill issued under the Local Treasury Bills
Ordinance (Chapter 417), or Central
Bank Security issued under the Monetary
Law Act (Chapter 422), and any discount is allowed and any interest is paid or is payable over the tenor of the period of such Security Bond or Bill, income tax at the rate of ten percentum on the total amount of interest calculated at the yield to maturity over the tenor of such Security, Bond or Bill, as the case may be, at the time of the issue of such Security, Bond or Bill other than any Security, bond Bill issued prior to April 1,
2002.
For the purpose of this paragraph “the yield, to maturity of any security or treasury bond issued under the Registered stocks and Securities
Ordinance (Chapter 420), or Treasury Bill issued under the Local Treasury Bonds Ordinance
(Chapter 417), or Central Bank Security issued under the Monetary Law Act (Chapter 422), at the time of issue”, shall mean “the interest at the time of issue considering the issue price which may be at a premium or discount on the par value of such Security, Bond or Bill, the interest coupons, the frequency and timing of interest coupons, the maturity value and the term of maturity.
Notwithstanding the provisions in paragraph (a) of subsection (1), in case of any savings certificate, certificate of deposit, or similar instruments or Government Rupee Loans or any deposit not in the name of any individual or jointly with any other individual to any charitable institution as certified by the Commissioner-General, income tax shall be deducted on the total amount of the discount allowed and interest paid irrespective of such amount of discount or interest.
For the purposes of a deduction of income tax under this section –
“a sum of money deposited” means any interest bearing deposit, any form of savings certificate or certificate of deposit or any Security or Treasury
Bond issued under the Registered Stocks and Securities Ordinance (Chapter 420),
Treasury Bill issued under the Local
Treasury Bills Ordinance (Chapter 417), or the Central Bank Security issued under the Monetary Law Act (Chapter 422);
“interest” in relation to a deposit of a sum of money includes interest, discount, any guaranteed income or fee assured, or any other payment accruing to the benefit of the person or partnership in whose name or on whose behalf the sum of money is deposited or to any other person on his or its behalf but does not include any interest exempt under section 10 or any interest credited or paid to any Ministry of a
Minister of the
Cabinet, or
Department of the Government of Sri
Lanka, or any Local Government
Institution, or any Institution under a
Provincial Council, or any foreign
Government or any person exempt on such interest income under paragraph (a) of section 8 of this Act ;
in the case of a discount allowed, interest which is equal to the amount of discount shall be deemed to have been paid at the time of such discount is allowed and in case of a bill or bond or security with interest payments over the tenor of such
Bond or Bill, or security the interest shall be the yield to maturity which amounts shall be deemed to have been paid at the time of the issue of such, Bond or Bill or security.
For the avoidance of doubt it is hereby declared that “deduct at the time the interest is paid or credited” in subsection (1) shall include any amount of interest credited to any account of the depositor or any other person.”.