Personal tax 2014

1. PERSONAL TAX AT A GLANCE
YEAR OF ASSESSMENT 2014/2015
► Tax free allowance for Residents / Non- Resident citizens of Sri Lanka is Rs. 500,000/-
► Qualifying payment relief of Rs 100,000/- is granted on employment
Taxable Income Rates
First Rs. 500,000/-
@4%
Next Rs 500,000/-
@8%
Next Rs 500,000/-
@12%
Next Rs 500,000/-
@16%
Next Rs 1,000,000/-
@20%
On Balance
@24%
► PAYE Tax of Government & Private sector employees are final
► Individuals employed under several employers
Employment income from main employer (both private & public sector)
Normal PAYE Tax
Employment income from other employers in private sector exceeding Rs. 25,000/-
Taxed @ 16%
Employment income from other employers in private sector less than Rs. 25,000/-
Taxed @ 10%
Employment income from other employers in public sector exceeding Rs. 50,000/- **
Taxed @ 16%
Employment income from public sector less than Rs. 50,000/- **
Taxed @ 10%
► WHT on Directors Fees - exceeding Rs. 25,000/- p.m 16%
less than Rs. 25,000/- p.m 10%
► In the case of being employed by several employers the aggregate of vehicles provided or vehicle allowance up to Rs. 50,000/- p.m. is exempt **
► Value of employment benefits - Gazette on 20.5.2011 (No. 1706/18)
► The definition of an “executive officer” has been increased from a person receiving monthly emoluments of Rs. 25,000/- to Rs. 75,000/- **
► CONCESSIONARY RATES **
► Employees Maximum of
► Professional other than employees ** Maximum of
MARGINAL RELIEF OF RS. 48,000/- P.A.
► The Relief is granted to employees (not engaged in trade business profession or vocation) on income other than income from employment or other income not taxable at sources as final tax
QUALIFYING PAYMENTS
► Individual engaged in profession is allowed qualifying payment of Rs. 50,000/- p.m. as capital repayment of a loan obtained to construct a residential apartment complex for own use. **
► Expenditure incurred under any community development project in ‘most difficult villages’ identified and published in the gazette - maximum of Rs 1 million
► Donations to the government, Investment in specified projects, Life/ Health insurance & cash donations to specified approved charities, established for the provisions of institutionalized care for sick or needy – Lower of 1/3 of A.I or Rs. 75,000/-
TERMINAL BENEFITS
► Terminal Benefits - Provident fund (Approved or regulated) – Exempt
► Withholding Tax on Gratuity, Commuted Pension or any other payment uniformly applicable to all employees,
o Retain 10% - if the payment exceeds Rs 1 million and service less than 20 years
o Retain 10% - if the payment exceeds Rs 1.5 million and service more than 20 years
► If the above payment is not uniform - Retain 24%
► Any other payments, which is not uniform other than compensation for loss of office - 24%
► Compensation for loss of office under non-uniform scheme – Retain 16%
(** Changes in budget 2014)
Profits from employment income – Pilots (Section 40A)
16%
Profits from employment income – qualified employees (Section 40B)
16%
Profits from employment of professionals **
16%
Income does not exceed Rs. 25 Mn
12%
Income between Rs. 25 Mn to Rs. 35 Mn
14%
Income exceeding Rs. 35 Mn
16%