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TeLiAsk - Community Questions - Tax Sri Lanka

Can you explain me more about that Refundable in tax computation

what is the Refundable in tax computation

sadaru Asked on Sep 18, 2025 05:26

Anonymous Sep 18, 2025 05:29

Example Calculation for the 2024/25 Tax Year

Your total income is Rs. 250,000 (foreign income) + Rs. 240,000 (bank interest).
- Out of this, only the bank interest (Rs. 240,000) is considered taxable in Sri Lanka.

Every individual is entitled to a personal tax-free allowance of Rs. 1.2 million per year.
- Since your taxable income (Rs. 240,000) is below this allowance, you do not have to pay any income tax.

👉 Result: No income tax is payable for the year 2024/25.

Why Did the Bank Deduct Tax?

Even though your income is below the tax-free threshold, the bank has already deducted Rs. 10,000 as withholding tax on your interest income.

How to Claim Your Tax Refund

You are entitled to get this deducted amount back. There are two ways to claim your refund from the Inland Revenue Department (IRD Sri Lanka):

Option 1: The IRD will refund the money directly to your account after reviewing your income tax return.

Option 2: Instead of receiving cash, you can carry forward the Rs. 10,000 and use it as a tax credit (minus value) for the next year’s tax payment.

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Is foreign exchange forex income taxable in Sri Lanka

Is foreign exchange (forex) income taxable in Sri Lanka?

sanjula Asked on Sep 16, 2025 11:39

forex

admin Sep 16, 2025 11:40

If you are a resident in Sri Lanka, your global income (including forex trading, freelance payments, online earnings, or investments abroad) is subject to income tax under the Inland Revenue Act.

If you are a non-resident, only income earned or derived from Sri Lanka is taxable, so foreign forex earnings outside Sri Lanka are generally not taxed.

The applicable tax rate depends on your total annual income and is calculated according to the individual income tax slabs.

In summary: If you are a tax resident in Sri Lanka, forex income is taxable.

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Difference between a Personal Tax File - IT Freelancer/Independent Service

What is the difference between a Personal Tax File (Foreign + Local Income) and an IT Freelancer/Independent Service Provider Tax File (Foreign + Local Income)?

Yass Asked on Sep 05, 2025 00:50

Freelancer

admin Sep 05, 2025 00:50

Personal Tax File (Foreign + Local Income) - This is based on the agreement you receive from your employer. If the agreement states 'employment,' then you fall under this category. Foreign income is considered salary, while local income is considered deposit income, investment income, rental income, etc.

IT Freelancers & Independent Service Providers (Foreign + Local Income) - This is determined by the agreement you receive from your employer. If the agreement specifies 'contract,' 'independent service provider,' or 'freelancer,' then you fall under this category. Foreign income is considered your earnings, while local income is considered deposit income, investment income, rental income, etc.

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