THE GAZETTE OF THE DEMOCRATIC

SOCIALIST REPUBLIC OF
SRI LANKA

Part II of February 21, 2025

SUPPLEMENT

(Issued on 21.02.2025)

INLAND REVENUE (AMENDMENT)

A
BILL

To amended the Inland Revenue Act, No. 24 of 2017

Ordered to be published by the Minister of Finance Planning and

Economic Development

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 Inland Revenue (Amendment) 1

STATEMENT OF LEGAL EFFECT

Clause 2: This clause amends section 150 of the Inland Revenue Act, No.24 of 2017
(hereinafter referred to as the “principal enactment”) and the legal effect of that section
as amended is to reduce the time period within which a refund may be requested by a
tax payer, from four years to two and a half years.

Clause 3: This clause amends the First Schedule of the principal enactment and the
legal effect of that Schedule as amended is to increase the tax-free threshold applicable
for Personal Income Tax and revise tax rates for certain gains and profits earned by
individuals and companies.

Clause 4: This clause amends the Third Schedule of the principal enactment and the
legal effect of that Schedule as amended is to exclude gains and profits derived from
rendering certain services from the exemptions granted under that Schedule with effect
from April 1, 2025.

Clause 5: This clause amends the Fifth Schedule of the principal enactment and is
consequential to the amendment made by clause 3.
 Inland Revenue (Amendment) 1

L.D.-O. 82/2024

A A T A T I R A ,
N . 24 O 2017

BE it enacted by the Parliament of the Democratic Socialist

Republic of Sri Lanka as follows: -

1. (1) This Act may be cited as the Inland Revenue Short title and
(Amendment) Act, No. of 2025. the date of
operation

5 (2) The provisions of this Act shall come into operation

on April 1, 2025.

2. Section 150 of the Inland Revenue Act, No. 24 of 2017 Amendment

of section 150
(hereinafter referred to as the “principal enactment”) is
of Act, No.
hereby amended as follows: - 24 of 2017

10 (1) in paragraph (a) of subsection (2A) of that section –

(a) by the substitution for the words “not

exceeding one hundred thousand
rupees,”, of the words and figures “not
exceeding sixty thousand rupees for a
15 year of assessment prior to April 1, 2025
or not exceeding one hundred and eighty
thousand rupees for a year of assessment
commencing on or after April 1, 2025,”;
and

20 (b) in the proviso to that paragraph, by the

substitution for the words “not exceeding
twenty five thousand rupees for any
quarter”, of the words and figures “not
exceeding sixty thousand rupees for a year
25 of assessment or fifteen thousand rupees
 2 Inland Revenue (Amendment)

for a quarter prior to April 1, 2025, or with

effect from April 1, 2025 not exceeding
one hundred and eighty thousand rupees
for a year of assessment or forty five
5 thousand rupees for any quarter”;

(2) in subsection (3) of that section, by the substitution

for the words “A refund”, of the words and figures
“Prior to April 1, 2024, a refund”; and

(3) by the addition immediately after subsection (3) of

10 that section, of the following new subsection: -

“(4) With regard to any year of

assessment commencing on or after April
1, 2024, a refund or credit may be made
under this section only if the taxpayer
15 applies for such refund or credit –

(a) within thirty months of the last date

of the relevant year of assessment,
where the taxpayer is required to file
a tax return under this Act; or

20 (b) within the time period specified

by the Commissioner-General,
where such refund or credit is made
on the Commissioner-General’s
initiative.”.

25 3. The First Schedule to the principal enactment is hereby Amendment

amended as follows: - of the First
Schedule to
the principal
(1) in paragraph 1 of that Schedule – enactment

(a) in subparagraph (1C) of that paragraph, by

the substitution for the words and figures
 Inland Revenue (Amendment) 3

“from April 1, 2023”, of the words and

figures “from April 1, 2023, but prior to
April 1, 2025”;

(b) by the insertion immediately after

5 subparagraph (1C) of that paragraph, of
the following new subparagraph: -

‘‘(1D) Subject to the provisions

of subparagraph (2), the taxable
income of a resident or non-resident
10 individual for a year of assessment
commencing from April 1, 2025 shall
be taxed at the following rates: -

Taxable income Tax Payable

Not exceeding 6% of the

15 Rs. 1,000,000 amount in
excess of Rs.0
Exceeding Rs. 60,000 plus
Rs. 1,000,000 18% of the
but not amount in
exceeding excess of
20
Rs. 1,500,000 Rs. 1,000,000
Exceeding Rs. 150,000 plus
Rs. 1,500,000 24% of the
but not amount in
25 exceeding excess of
Rs. 2,000,000 Rs. 1,500,000
Exceeding Rs. 270,000 plus
Rs. 2,000,000 30% of the
but not amount in
30 exceeding excess of
Rs. 2,500,000 Rs. 2,000,000
 4 Inland Revenue (Amendment)

Exceeding Rs. 420,000 plus

Rs. 2,500,000 36% of the amount
in excess of
Rs. 2,500,000

5 (c) by the repeal of item (c) of subparagraph

(2) of that paragraph and the substitution
therefor, of the following item: -

“(c) the type of business income

referred to in subparagraph (4) shall be
10 taxed at the rate of –

(i) 40%, prior to April 1, 2025; and

(ii) 45%, with effect from April 1,

2025; and”; and

(d) by the addition immediately after

15 subparagraph (5) of that paragraph, of the
following new subparagraph: -

“(6) Notwithstanding anything to the

contrary in the provisions of subparagraph
(1D), an individual’s following gains and
20 profits shall be taxed at the maximum rate
of 15% with effect from April 1, 2025: –

(a) the gains and profits earned or

derived from any service rendered
in or outside Sri Lanka to any person
25 to be utilized outside Sri Lanka,
where the payment for such services
is received in foreign currency
 Inland Revenue (Amendment) 5

and remitted through a bank to Sri

Lanka;

(b) the gains and profits earned or

derived from any foreign source
5 where such gains and profits
are earned or derived in foreign
currency and remitted through a
bank to Sri Lanka.”;

(2) in paragraph 4 of that Schedule –

10 (a) in subparagraph (1) of that paragraph, by

the substitution for the words and figures
“subparagraphs (2), (2A), (2B) and (3)”,
of the words and figures “subparagraphs
(2), (2A), (2B), (2C) and (3)”;

15 (b) in subparagraph (2B) of that paragraph, by

the substitution for the words and figures
“commencing on or after April 1, 2023,”,
of the words and figures “commencing on
or after April 1, 2023, but prior to April 1,
20 2025,”;

(c) by the addition immediately after

subparagraph (2B) of that paragraph, of
the following new subparagraph: -

“(2C) Such part of the following

25 gains and profits of a company which
includes in its taxable income for any
year of assessment commencing on
or after April 1, 2025, the gains and
profits of a company shall be taxed at
30 the following rates: -
 6 Inland Revenue (Amendment)

(a) gains and profits earned or

derived from any service
rendered in or outside Sri Lanka
to any person to be utilized
5 outside Sri Lanka, where the
payment for such services is
received in foreign currency and
remitted through a bank to Sri
Lanka -15%;

10 (b) gains and profits earned or

derived from any foreign source
where such gains and profits
are earned or derived in foreign
currency and remitted through a
bank to Sri Lanka – 15%;
15
(c) gains and profits from
conducting betting and gaming
– 45%; and

(d) gains and profits from the

20 manufacture and sale or import
and sale of any liquor or tobacco
product other than the export of
such product – 45%.”; and

(3) by the repeal of item (d)(ii) of subparagraph (1) of

25 paragraph 10 of that Schedule, and the substitution
therefor, of the following item: -

“(ii) interest or discount paid –

(a) with effect from January 1, 2023,

but prior to April 1, 2025 - 5%;

30 (b) with effect from April 1, 2025 –

10%;”.
 Inland Revenue (Amendment) 7

4. The Third Schedule to the principal enactment is hereby Amendment

of the Third
amended in paragraph (u) of that Schedule as follows: - Schedule to
the principal
enactment
(1) in subparagraph (iii) of that paragraph, by the
substitution for the words and figures “on or after
5 January 1, 2020;”, of the words and figures “on or
after January 1, 2020, but prior to April 1, 2025;”;
and

(2) in subparagraph (iv) of that paragraph, by the

substitution for the words and figures “on or after
10 January 1, 2020;”, of the words and figures “on or
after January 1, 2020, but prior to April 1, 2025;”.

5. The Fifth Schedule to the principal enactment is hereby Amendment

amended in subparagraph (a) of paragraph 2 as follows: - of the Fifth
Schedule to
the principal
(1) in item (iii) of that subparagraph, by the substitution enactment
15 for the words and figures “April 1, 2022; and”, of
the words and figures “April 1, 2022;”;

(2) in item (iv) of that subparagraph, by the substitution

for the words and figures “April 1, 2023,”, of the
words and figures “April 1, 2023, but prior to April
20 1, 2025; and”; and

(3) by the addition immediately after item (iv) of that

subparagraph, of the following new item: -

“(v) Rs. 1,800,000, for each year of assessment

commencing on or after April 1, 2025,”.

25 6. In the event of any inconsistency between the Sinhala Sinhala text

to prevail in
and Tamil texts of this Act, the Sinhala text shall prevail.
case of
inconsistency
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