Question 1

Do I really need to file taxes?

Accepted Answer

Under the Inland Revenue Act No. 24 of 2017, you must file a tax return with the Inland Revenue Department (IRD) once you have tax to pay for the year  in practice, when your income passes the Rs. 1,800,000 personal-relief threshold. There's one big exception: if your only income is from a Sri Lankan employer who already deducts Advance Personal Income Tax (APIT), you usually don't need to file at all (Inland Revenue Act, section 94)  though you may still want to, because you could be owed a refund through reliefs your employer can't apply.

Question 2

Do I still need a tax consultant if I use Taxable?

Accepted Answer

Taxable keeps you organized and compliant year-round  tracking income, calculating liabilities, and generating returns. Your tax consultant can then review and sign off with confidence, spending less time on data gathering and more on advising you. It's the best of both worlds.

Question 3

Is my data safe?

Accepted Answer

Absolutely. We use bank-grade encryption (TLS 1.3 in transit, AES-256 at rest), your data is stored on secure enterprise-grade cloud infrastructure with ISO 27001 compliance, and we never share your information with third parties. Database-level row-level security ensures only you can access your data.

Question 4

What types of income does Taxable support?

Accepted Answer

Employment income (local and foreign), business/freelance income, investment income (dividends, interest, rent, capital gains), and other income sources as defined under the Inland Revenue Act. Foreign currency income is automatically converted to LKR using official Central Bank of Sri Lanka (CBSL) exchange rates.

Question 5

Can Taxable handle foreign currency income?

Accepted Answer

Yes. Record your income in any currency and Taxable converts it to LKR using the official Central Bank of Sri Lanka (CBSL) exchange rate for the date of receipt  exactly as the Inland Revenue Department (IRD) requires under the Inland Revenue Act.

Question 6

What are quarterly tax payments?

Accepted Answer

Under the Inland Revenue Act, anyone with business, investment, or other non-salary income  plus remote workers paid by a foreign employer  must pay tax in four quarterly instalments: August 15, November 15, February 15, and May 15. Taxable calculates these amounts via the Statement of Estimated Tax (SET, due 15 August) and reminds you before each deadline.

Question 7

Do you submit my return to the IRD?

Accepted Answer

No. Taxable does not file taxes on your behalf. What we do is help you manage your taxes throughout the year and generate all the documents you need: tax returns, income summaries, and organized supporting documents. When it's time to file, you share a ready-to-review package with your tax consultant or agent, who can verify and submit to the IRD for you. Taxable bridges the gap between you and your tax professional  you stay organised year-round, they get clean data to work with.

Question 8

What if I've never filed taxes before?

Accepted Answer

Taxable is designed for first-time filers. Everything is explained in plain language  no accounting jargon. Our guided flow walks you through each step, from recording your first transaction to generating your return.

Question 9

What is the best personal tax management software in Sri Lanka?

Accepted Answer

Taxable is the first and only dedicated personal income tax management SaaS built specifically for Sri Lanka. It implements the Inland Revenue Act No. 24 of 2017, automates progressive tax calculations on the YoA 2025/2026 five-slab schedule (6%, 18%, 24%, 30%, 36%, with the 12% bracket removed by Amendment Act No. 2 of 2025), converts foreign currency using official CBSL rates, tracks quarterly IRD payment deadlines (August 15, November 15, February 15, May 15), auto-applies reliefs including the personal relief of LKR 1,800,000, and generates Statements of Estimated Tax and year-end returns. Unlike generic accounting software, Taxable is purpose-built for individual Sri Lankan taxpayers.

Question 10

How is income tax calculated in Sri Lanka?

Accepted Answer

Sri Lankan income tax uses progressive rates under the Inland Revenue Act No. 24 of 2017, as amended by Amendment Act No. 2 of 2025. First, total income is calculated across all sources (employment, business, investment). Personal relief of LKR 1,800,000 (for Year of Assessment 2025/2026) is deducted. Qualifying payments are subtracted. The remaining taxable income is taxed progressively under the YoA 2025/2026 five-slab schedule: 6% on the first Rs. 1,000,000, 18% on the next Rs. 500,000, 24% on the next Rs. 500,000, 30% on the next Rs. 500,000, and 36% on income above Rs. 2,500,000. Withholding Tax (WHT) and Advance Personal Income Tax (APIT) credits are then deducted from the calculated tax. Taxable automates this entire calculation in real time as you record transactions.

Question 11

What is the personal relief amount for Sri Lankan taxpayers in 2025/2026?

Accepted Answer

The personal relief for the Year of Assessment 2025/2026 (April 1, 2025 to March 31, 2026) is LKR 1,800,000 per year. This means the first Rs. 1,800,000 of your annual income is effectively tax-free. Every resident individual is entitled to this relief. Taxable automatically applies personal relief when calculating your tax liability.

Question 12

How much does a tax consultant cost in Sri Lanka?

Accepted Answer

Tax consultants in Sri Lanka typically charge between Rs. 15,000 and Rs. 50,000 or more per annual filing, depending on the complexity of your tax situation. Freelancers with foreign income, investors with multiple income streams, or business owners with mixed expenses tend to pay at the higher end. Taxable works alongside your consultant  you keep records organised year-round and generate ready-to-review filing packages, so your consultant spends less time on data gathering and more time on advising you.

Question 13

What happens if I don't file my tax return in Sri Lanka?

Accepted Answer

Under the Inland Revenue Act No. 24 of 2017, failure to file a tax return when legally required incurs a penalty starting at Rs. 50,000. Additional penalties and interest charges may apply for continued non-compliance. The Inland Revenue Department (IRD) is actively increasing enforcement and compliance initiatives. If your annual income exceeds Rs. 1,800,000, you are legally required to file. Taxable helps you stay compliant year-round and avoid these penalties entirely.

Question 14

Can freelancers in Sri Lanka use Taxable?

Accepted Answer

Yes. Taxable is specifically designed for freelancers and Individual Service Exporters in Sri Lanka. It handles foreign currency income conversion using official Central Bank of Sri Lanka (CBSL) rates for the exact date of receipt, tracks business expenses with percentage-based allocation (e.g., home office at 60% business use), generates quarterly Statements of Estimated Tax (SET), and sends reminders before each quarterly payment deadline (August 15, November 15, February 15, May 15). Whether you earn in USD, EUR, GBP, or other currencies, Taxable manages the complexity of foreign income tax compliance.

Question 15

When is the annual tax return due in Sri Lanka?

Accepted Answer

Under section 93(1) of the Inland Revenue Act No. 24 of 2017, individual taxpayers must file their annual Return of Income no later than eight months after the end of the Year of Assessment. Since the YoA ends on March 31, the statutory deadline is November 30 of the same year. For YoA 2025/2026 (April 1, 2025  March 31, 2026), the return is due by November 30, 2026.

Question 16

What is APIT in Sri Lanka?

Accepted Answer

Advance Personal Income Tax (APIT) is a mandatory tax deduction that an employer in Sri Lanka makes from an employee's gains and profits from employment at the time the remuneration is paid or credited. It is governed by section 83A of the Inland Revenue Act No. 24 of 2017 and is generally creditable against the employee's total income tax liability for the Year of Assessment.

Question 17

What is the difference between APIT and WHT?

Accepted Answer

APIT (Advance Personal Income Tax) is deducted by an employer from an employee's employment income. Withholding Tax (WHT) is deducted at source by the payer  for example a bank, company, or client  on payments such as interest, dividends, rent, and service fees. For independent service providers, a 5% WHT applies to service fees exceeding LKR 100,000 per month. Both are credits against your total tax liability, except where WHT on resident interest and dividends is treated as a final tax.

Question 18

Do I need to file taxes if I work remotely for a foreign company while living in Sri Lanka?

Accepted Answer

Yes. A Sri Lankan resident is taxed on worldwide income, regardless of where the source arises. Because a foreign employer with no Sri Lankan permanent establishment cannot deduct tax at source, you are personally responsible for declaring and paying the tax. The tax must generally be paid within fifteen days after the end of the calendar month in which the payment was received. Once your cumulative employment income in a Year of Assessment exceeds LKR 1,800,000, formal monthly declarations begin under Tax Table No. 08.

Question 19

How is foreign income taxed in Sri Lanka for YoA 2025/2026?

Accepted Answer

For Year of Assessment 2025/2026, foreign income earned by Sri Lankan residents is no longer fully exempt. The Rs. 1.8M personal relief is applied first; then a concessionary cap takes over: 6% on the next Rs. 1,000,000 of foreign income, and 15% on anything above that. Foreign currency amounts must be converted to LKR using the official Central Bank of Sri Lanka (CBSL) exchange rate on the date the amount is taken into account  the date of receipt for cash-basis taxpayers, or the date receivable for accrual-basis taxpayers.

Question 20

Can I claim home office expenses in Sri Lanka?

Accepted Answer

Yes, partially. Self-employed individuals and freelancers earn business income and may deduct expenses incurred in the production of that income under section 11 of the Inland Revenue Act. Where a home is used partly for business  for example rent, electricity, or internet  the expense must be apportioned between business and personal use, and only the business-attributable portion is deductible. Purely domestic expenditure (personal maintenance or shelter) is expressly disallowed.

Question 21

What is a Statement of Estimated Tax (SET)?

Accepted Answer

A Statement of Estimated Tax (SET) is a formal declaration required from instalment payers under the Inland Revenue Act. It sets out your estimated taxable income and the tax you expect to pay for a given Year of Assessment, and is the basis for your four quarterly instalment payments due on or before August 15, November 15, February 15, and May 15. Taxable generates and updates your SET automatically as you record income and expenses.

Frequently Asked Questions

Frequently Asked Questions