Filing taxes might seem overwhelming, but with Sri Lanka’s streamlined e-Filing system, navigating your tax obligations has never been easier. Here’s what you need to know about the 2023/24 Individual Income Tax (IIT) process.
Mandatory e-Filing: A Digital Leap
Sri Lanka’s Inland Revenue Department (IRD) mandates all taxpayers to e-file returns under the Inland Revenue Act No. 24 of 2017. Whether you’re declaring employment income or business profits, the e-Filing platform ensures secure, efficient, and hassle-free tax submissions.
- Personal Identification Number (PIN): A must-have for all taxpayers. If you don’t have one, apply online through the IRD’s e-services portal.
- e-Services Access: Log in, verify your TIN and PIN, and proceed to file your returns electronically.
Who Can Use the Simplified IIT Return?
The Simplified Return scheme caters to individuals with straightforward tax situations:
- Primary Employment Income Only
- Interest Income (with AIT deductions by banks)
- Combined Primary Employment and Interest Income
- Nil Returns
If your income profile is more complex (e.g., you have multiple sources of income, qualifying payments, or reliefs), you’ll need to use the Standard Return of Income.
What Do You Need to Declare?
Taxpayers must provide comprehensive details about their financial situation. Here’s a breakdown:
- Employment Income: Declare taxable remuneration and benefits while accounting for exempt amounts (e.g., pensions or certain allowances).
- Business Income: Include income from sole proprietorships, partnerships, and trusts.
- Investment Income: Report interest, rent, dividends, and capital gains.
- Other Income: Capture miscellaneous earnings like royalties or winnings.
The system calculates taxable amounts and deductions automatically, ensuring compliance with applicable tax rates.
Reliefs and Exemptions
The 2023/24 tax year offers significant reliefs to minimize your tax liability:
- Personal Relief: Up to LKR 1.2 million.
- Rent Relief: 25% of rental income.
- Solar Panel Relief: Deduct expenses (up to LKR 600,000 annually) for solar installations.
- Exemptions: Benefits like diplomatic privileges, small capital gains, or specific employment-related allowances.
For a full list of reliefs and exemptions, refer to the IRD’s comprehensive annexures.
Statement of Assets and Liabilities
Transparency is key. Taxpayers must declare:
- Immovable Assets: Properties in Sri Lanka or abroad.
- Movable Assets: Vehicles, bank deposits, securities, cash, and jewelry.
- Liabilities: Loans and payables as of March 31, 2024.
Stay Organized: Document Upload and Confirmation
Upload supporting documents during the submission process or at a later stage. Double-check all entries, print your confirmation page, and retain a PDF copy for future reference. Remember, amendments are allowed before submission only.
Progressive Tax Rates for 2023/24
Income is taxed progressively, starting at 6% for the first LKR 500,000 and peaking at 36% for income exceeding LKR 2.5 million. For specialized businesses like gaming or alcohol, rates are higher (40%).
Tips for a Smooth Filing Experience
- Stay updated via the IRD website.
- Use the downloadable CSV templates for bulk data entry.
- Verify and double-check all fields to avoid discrepancies.
By embracing the streamlined IIT e-Filing system, you save time, stay compliant, and contribute to the nation’s development. Filing taxes isn’t just a legal obligation—it’s a step toward being a responsible citizen.
Download
