Proposed amendments to Inland Revenue Act

Minister of Finance Hon.Mangala Samaraweera has taken to his official Twitter account(10.01.2019) regarding Cabinet approval to the  several amendments to the Inland Revenue Act No.24 of 2017.

Interest on children's savings accounts

Interest earned by children under 18 years of age, on deposits maintained in any financial institution will be exempted from Income Tax.

Loans granted to  the government by any non-resident of Sri Lanka

Interest paid to any person outside Sri Lanka on loans granted to the Government of Sri Lanka will be exempted.

Royalty payment

Royalty payment not exceeding Rs.50,000 per month subject to a maximum of Rs.500,000 per year of assessment will be exempted from WHT.

Interest income on deposits maintained by individuals

Interest Income up to Rs.50,000 per month subject to Rs. 500,00 per annum on any savings and fixed deposits maintained by individuals including joint deposits of individuals in any financial institution will be exempted.

Withholding tax deducted on excess interest will be final tax w.e.f 01.12.2018

Earnings from government securities 

Withholding Tax (WHT) on earnings from Government securities exempt of any gain including interest, discount or capital gain earned by non-residents of sovereign bonds in local and foreign currency issued by or on behalf of the Government:

Rent 

Reduction of WHT applicable on the payment of rent from 10% to 5% of the rent.

Small and medium scale enterprises 

Income tax rate on Small and Medium Enterprises of Individuals,will be maximum 14%  with effect from 1 April 2019.

Interest income on NRFC & RFC accounts 

Interest income payable on or after 15 November 2018, to any person holding NRFC & RFC accounts in any commercial bank with the approval of the Central Bank will be exempted from income tax.

Income tax of foreign earnings

Foreign earnings remitted to Sri Lanka through a bank on or after 15 November 2018 will be exempted  from income tax .