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Sri Lanka requires instalment payers to settle their tax in four quarterly payments throughout the Year of Assessment, with a final balance payment after the year ends. The due dates below are fixed; how each instalment amount is calculated depends on the Year of Assessment (see below).
| 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.
For Years of Assessment before 2026/2027, instalment payers filed a Statement of Estimated Tax alongside the first quarterly payment (August 15), a projection of total annual income and tax, divided into four payments and revisable mid-year as actual income became clearer.
The Inland Revenue (Amendment) Act No. 11 of 2026 ended the SET requirement for Years of Assessment 2026/2027 onward. From that year, section 90(3) of the Inland Revenue Act instead calculates each instalment from the immediately preceding year's gross tax payable, divided by the number of instalments remaining in the year and adjusted for tax already paid or withheld. No SET filing is required under this rule.
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.
For Years of Assessment before 2026/2027, the Statement of Estimated Tax (SET) was due alongside the first quarterly instalment, on or before August 15, as your estimate of total annual tax liability, divided into four payments and revisable as the year progressed. The Inland Revenue (Amendment) Act No. 11 of 2026 ended the SET requirement for Years of Assessment 2026/2027 onward. From that year, section 90(3) of the Inland Revenue Act instead calculates each instalment from the immediately preceding year's tax payable, so no SET filing is required.
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 .