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Reference
The complete reference for individual income tax in Sri Lanka the five-slab progressive schedule under the Inland Revenue Act No. 24 of 2017, as amended by Amendment Act No. 2 of 2025. Includes quarterly instalment deadlines, reliefs, foreign income treatment, and a worked example.
Quick facts
The Year of Assessment 2025/2026 progressive schedule under the Inland Revenue Act No. 24 of 2017, as amended by Amendment Act No. 2 of 2025.
Applied to taxable income after personal relief of LKR 1,800,000.
| Taxable income | Rate |
|---|---|
| First Rs. 1,000,000 | 6% |
| Next Rs. 500,000 (Rs. 1,000,000 Rs. 1,500,000) | 18% |
| Next Rs. 500,000 (Rs. 1,500,000 Rs. 2,000,000) | 24% |
| Next Rs. 500,000 (Rs. 2,000,000 Rs. 2,500,000) | 30% |
| Above Rs. 2,500,000 | 36% |
The 12% bracket from prior years was removed by Amendment Act No. 2 of 2025.
Instalment payers must pay tax on or before the 15th of each month listed.
| Quarter | Due date | Instalment |
|---|---|---|
| Q1 | 15 August | First instalment |
| Q2 | 15 November | Second instalment |
| Q3 | 15 February | Third instalment |
| Q4 | 15 May | Final instalment (succeeding year) |
Annual return is due eight months after the YoA ends November 30 for YoA 2025/2026.
What changed in 2025
For Year of Assessment 2025/2026 the first slab widened from Rs. 500,000 to Rs. 1,000,000 (still at 6%), and the 12% bracket from prior years was removed entirely. The personal relief also increased from Rs. 1,200,000 (YoA 2024/2025) to Rs. 1,800,000.
| Band | YoA 2024/2025 | YoA 2025/2026 |
|---|---|---|
| 1st band | 6% on first Rs. 500,000 | 6% on first Rs. 1,000,000 |
| 2nd band | 12% on next Rs. 500,000 | Removed |
| 3rd band | 18% on next Rs. 500,000 | 18% on next Rs. 500,000 |
| 4th band | 24% on next Rs. 500,000 | 24% on next Rs. 500,000 |
| 5th band | 30% on next Rs. 500,000 | 30% on next Rs. 500,000 |
| Top band | 36% on the balance | 36% on income above Rs. 2,500,000 |
Worked example
Start with Rs. 5,000,000 of total income. Deduct the personal relief of Rs. 1,800,000 leaving Rs. 3,200,000 of taxable income. The five-slab schedule applies as follows:
| Band of taxable income | Calculation | Tax (LKR) |
|---|---|---|
| First Rs. 1,000,000 | 1,000,000 × 6% | 60,000 |
| Next Rs. 500,000 | 500,000 × 18% | 90,000 |
| Next Rs. 500,000 | 500,000 × 24% | 120,000 |
| Next Rs. 500,000 | 500,000 × 30% | 150,000 |
| Remaining Rs. 700,000 | 700,000 × 36% | 252,000 |
| Total annual income tax | 672,000 |
Withholding Tax (WHT) and Advance Personal Income Tax (APIT) credits if any would reduce the final amount payable.
Annual return
30 November 2026
Eight months after the YoA ends, under section 93(1) of the Inland Revenue Act.
Balance / final payment
30 September 2026
Six months after the YoA ends, under section 82(2)(c)(ii). Separate from the four quarterly instalments.
Late filing penalty
From Rs. 50,000
Plus Rs. 10,000 for each additional month, capped at Rs. 400,000 (section 178). Greater of this amount or 5% of tax owing + 1%/month.
Late payment is separate: a 20% penalty on unpaid tax (section 179), plus interest of 1.5% per month (section 157).
Foreign income
For YoA 2025/2026, foreign income earned by Sri Lankan residents is no longer fully exempt. The Rs. 1.8M personal relief is applied first. After that, a concessionary cap kicks in: 6% on the next Rs. 1,000,000 of foreign income, and 15% on anything above that.
LKR 1,800,000
Automatic statutory tax-free threshold for every resident individual. Cannot be applied against capital gains from investment assets.
25% of rental income
Resident individuals with rental income from investment assets may deduct 25%, in lieu of claiming actual repair, maintenance, and depreciation expenses.
Up to LKR 600,000 / year
Multi-year deduction for expenditure on solar panels connected to the national grid, until total expenditure (or related bank loan) is fully covered.
Quick references
Direct answers to the questions most people ask. Each page opens with a canonical answer, cites the relevant section of the Inland Revenue Act, and links to related explainers.
For salaried employees
Under Tax Table No. 01, employers begin deducting Advance Personal Income Tax once an employee's monthly regular profits from employment exceed Rs. 150,000 the annual personal relief of Rs. 1,800,000 apportioned across 12 months. APIT is creditable against your total income tax liability when you file your annual return.
Personal relief. Quarterly instalments. Foreign income conversion. APIT credits. The full Sri Lankan tax picture is a lot to hold in your head year-round Taxable handles it for you, in real time as you record transactions.
Rates and rules verified against the Inland Revenue Act No. 24 of 2017 and Amendment Act No. 2 of 2025. Last reviewed 2026-05-11.