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Sri Lanka requires instalment payers to settle their tax in four equal quarterly payments throughout the Year of Assessment, with a final balance payment after the year ends.
| Quarter | Period covered | Due date |
|---|---|---|
| Q1 | April – June | August 15 |
| Q2 | July – September | November 15 |
| Q3 | October – December | February 15 |
| Q4 | January – March | May 15 |
| Balance | Final settlement | September 30, 2026 |
Section 90 of the Inland Revenue Act treats you as an instalment payer if you earn income from a business, investment, or employment where the payer is not required to withhold tax. In practice that captures freelancers, self-employed professionals, small business owners, landlords (where rent WHT does not fully cover liability), remote workers for foreign employers, and anyone with multiple income sources not fully settled by APIT.
Miss a due date by less than 14 days and you avoid the 10% instalment penalty under Section 179(2) — but Section 157 interest of 1.5% per month still accrues from the original due date. After 14 days, both the penalty and the accumulated interest apply. Filing the annual return late carries a separate penalty under Section 178, starting at Rs. 50,000.
Alongside the first quarterly payment (August 15), you must also file a Statement of Estimated Tax — your projection of total annual income and tax, used to size each instalment. The SET can be revised mid-year as your actual income becomes clearer.
Common follow-ups on this topic.
Under Section 90 of the Inland Revenue Act, you are an instalment payer if you earn income from a business, investment, or employment where your employer is not required to withhold tax. This covers freelancers, self-employed professionals, small business owners, landlords, remote workers for foreign employers, and people with mixed income sources.
Yes. Section 179(2) gives you 14 days from the due date before the 10% penalty kicks in. However, interest at 1.5% per month under Section 157 starts accruing immediately from the original due date, so paying within the grace period still costs interest — just not the headline penalty.
Under Section 179(2), a 10% penalty on the unpaid instalment applies once 14 days have passed since the due date. On top of that, Section 157 interest of 1.5% per month accrues from the original due date until you pay. The two are cumulative.
The Statement of Estimated Tax (SET) is due alongside the first quarterly instalment — on or before August 15 of the Year of Assessment. The SET is your estimate of total annual tax liability, divided into four equal quarterly payments. You can update the SET as the year progresses.
Not if their full tax liability is covered by APIT deducted by the employer. But if a salaried employee has additional income — freelance work, rental income, investment returns above the final WHT bucket — they may still be an instalment payer for the portion not covered by APIT.
Taxable handles personal relief, slabs, quarterly instalments, WHT, and APIT credits automatically as you record transactions.
Verified against the Inland Revenue Act No. 24 of 2017 (as amended by Amendment Act No. 2 of 2025). Last reviewed .