A plain guide to personal income tax in Sri Lanka

Income tax is worked out for a year of assessment that runs from 1 April to 31 March. The year 2026/2027 covers what you receive between those dates. Each year has its own rates and reliefs, so a figure that was right last year may not be right this year.

A resident is taxed on income from anywhere in the world; a non-resident only on income from Sri Lanka. Income falls into four groups: employment (salary, allowances, bonuses and taxable benefits), business (including freelance and professional work, after allowable expenses), investment (interest, rent, dividends and gains on assets) and other income.

Adding the four gives your assessable income. Expenses cannot be deducted from employment income.

Every resident individual deducts a personal relief of Rs. 1,800,000. If you let out a property, 25% of the rent is deducted as rent relief. Spending on grid-connected solar panels can be claimed up to Rs. 600,000 a year. Donations to approved charities are deductible up to Rs. 75,000 or one-third of taxable income, whichever is lower; donations to the Government are deductible in full.

What is left is your taxable income, which is taxed in bands at rising rates. The current bands are on the rates page.

Employers deduct Advance Personal Income Tax (APIT) from salaries each month using IRD's tax tables and give you a T.10 certificate after the year ends. Banks deduct Advance Income Tax (AIT) of 10% from interest. Both are credits: they come off the tax you owe for the year, and you may get some back if too much was taken.

Dividends from resident companies are different. The 15% withheld is a final tax: the dividend is not added to your income and is not taxed again.

If withholding does not cover your tax, you pay the rest in four instalments (15 August, 15 November, 15 February and 15 May), with any balance due by 30 September after the year ends. The return of income is filed online through IRD e-Services by 30 November. Exact dates for each year are on the deadlines page.

You need a Taxpayer Identification Number (TIN) to file. If your only income is a salary fully covered by APIT, IRD does not require a return unless it has opened a file for you.

Your T.10 certificate, AIT certificates from each bank, invoices and receipts for business costs, rent agreements, and proof of every payment made to IRD. Keeping them together through the year makes filing a short job.