Tax Information Guide 2025/26
1. Benefits of Paying Taxes
Taxes fund infrastructure projects, education, healthcare, and public services that benefit society. By paying your taxes, you contribute to national development and enjoy the benefits of a functioning society.
Why It Matters
Your tax contributions directly support the development and maintenance of public services that everyone uses, from roads and hospitals to schools and emergency services.
2. Tax Categories Based on Job Type
Different employment types have different tax obligations and payment schedules. Understanding your category is crucial for proper tax compliance.
Local Employee
- Tax Deduction: PAYE / APIT deducted monthly by employer
- Payment: Tax deducted at source each month
- Filing: Employer handles most filings, but you must submit final return
- Documents: Receive Form T10 (tax deduction certificate) from employer
Foreign Employee
- Tax Deduction: No automatic tax deduction by employer
- Payment: Self-assessment required
- Timing: After first 1.8 million income, tax due on 15th of following month
- Filing: Must file final annual return
Foreign ISP/Freelancer
- Tax Payment: Self-assessment with quarterly installments
- Due Dates: 15th Aug, Nov, Feb, May
- Income Period: For income earned April-June 2025, first payment due Aug 15, 2025
- Expenses: Can deduct expenses directly involved in earnings
- Assets: Can claim depreciation on business assets
Key Distinction for Uber Sri Lanka Staff
As Uber Sri Lanka employees, you fall under the Local Employee category — your employer deducts PAYE/APIT tax monthly at source, so there is no quarterly self-payment for you to manage. Your main responsibility is to verify your T10 and submit your final return.
3. Basic Terms of Tax Filing
Understanding these key terms is essential for proper tax compliance:
- IRD - Inland Revenue Department of Sri Lanka
- RAMIS - Revenue Administration Management Information System (digital tax platform)
- TIN - Taxpayer Identification Number
- PIN - Personal Identification Number (for RAMIS access)
- Tax Type - For local employees it should be IIT (Individual Income Tax)
- Taxable Year / Financial Year / Fiscal Year - 1st April 2025 to 31st March 2026
- T10 - Local employee tax deduction certificate issued by employer
- DIN - Document Identification Number to make payments
- WHT - Withholding Tax (tax deducted at source)
- AIT - Advance Income Tax
- Tax computation - Summary of your tax calculation
- Draft return - Preview before final submission (review before submitting)
- Final return - Final submission to IRD
- Acknowledgement - Reference number issued for each submission (save as PDF)
How to Check Your Tax Type
As a local employee, your tax type should be IIT (Individual Income Tax). You can verify your tax type through the RAMIS system.
How to check tax type - Step by step guide4. What Do You Need to Do from the IRD Side (Obtain Your TIN)
Before you can file your tax return, you need a TIN (Taxpayer Identification Number) and a PIN (used to access RAMIS). Here's how to obtain them, depending on whether you're already registered with the IRD or not.
Step 1: Check If You're Already Registered
Visit the IRD e-Service registration page and try to register. If it shows "already registered", it means you already have a TIN on file.
IRD e-Service - TIN RegistrationIf Already Registered
You have two options to obtain your TIN and PIN:
- Option 1: Visit your nearest IRD office and collect your TIN and PIN in person.
- Option 2: Connect your TIN with your email address — once connected, your PIN will be sent to your email.
You can also write to the IRD directly to request that your TIN be connected to your email.
Obtain Your TIN Online
You can retrieve your TIN online without visiting an office:
- Go to the IRD Verify Registration page
- Click "Verify Registration"
- Enter your NIC and email address
- You'll receive an OTP to your email — enter it to verify
- Your TIN will then be displayed
Summary: Two Methods to Obtain Your TIN and PIN
- Method 1: Visit the IRD office in person and get your TIN and PIN directly.
- Method 2: Obtain your TIN online, then email the IRD to connect your TIN with your email — your PIN will then be sent to you by email.
If You Are NOT Registered
If you're not yet registered with the IRD, you can register online. Once your registration is processed, both your TIN and PIN will be sent to your email.
For a fresh registration, you will need the following:
- Copy of your NIC
- Full name
- Name with initials
- Address as per NIC
- Province (පළාත)
- District (දිස්ත්රික්ය)
- Divisional Secretariat (ප්රාදේශීය ලේකම් කාර්යාලය)
- Grama Niladhari Division (ග්රාම සේවක වසම)
- Phone number
- Email address
5. Details Required for IRD Submission
When filing your tax return, you need to provide comprehensive information to the IRD. Here are the key details required:
1. Tax Computation
A summary of your tax calculation including:
- Total income from all sources
- Allowable deductions
- Taxable income
- Tax already paid (if any)
- Balance tax payable
2. Assets and Liabilities
Immovable Assets:
- Land
- House/Buildings
- Commercial properties
Movable Assets:
- Vehicles
3. Financial Information
Liabilities:
- Credit card balances
- Loans
- Lease agreements
Income Sources:
- Bank account balances
- Interest income
- Dividend income
- Rental income
Assets & Liabilities as at 31st March 2026 (Detailed Summary)
| Type | Address | Deed Number | Purchase Date | Purchase Cost | Current Value |
|---|---|---|---|---|---|
| [Add your land & building details] | |||||
| Vehicle Type | Purchase Date | Vehicle Reg. No. | Purchase Cost | Current Value |
|---|---|---|---|---|
| [Add your vehicle details] | ||||
| Bank Name | A/C No. | Balance as at 31st March 2026 |
|---|---|---|
| [Add your bank account balances] | ||
| Bank | Granted Date | Original Amount | Amount Paid During the Year | Outstanding Balance |
|---|---|---|---|---|
| [Add your loan/lease/cc details] | ||||
| Company Name | [Add share details] | |||
|---|---|---|---|---|
| [Add your share/stock details] | ||||
Documentation Requirement
Maintain proper documentation for all assets, liabilities, and income sources. The IRD may request proof during an audit. Keep records for at least 5 years.
6. Common Errors When Collecting Your Details
Before submitting your details to us, double-check the following. These are the most common mistakes we see when employees collect and share their tax details.
T10 Errors
- Period verification: Confirm the T10 covers the correct period (1st April 2025 to 31st March 2026) and not a partial or prior year period.
- Amount verification: Check that the income amount stated on the T10 matches your actual earnings for the period.
- Tax deduction check: Confirm the tax deducted amount shown on the T10 is correct and matches what was actually withheld from your salary.
WHT Errors
- Period check: Verify the WHT certificate covers the correct period before submitting.
- AIT rate check: Confirm the AIT (Advance Income Tax) rate applied is correct for your income type.
- Total deduction check: Verify the total deduction amount shown adds up correctly and matches your records.
Why This Matters
Errors in these documents can lead to incorrect tax computations, delays in filing, or discrepancies during an IRD review. Please review these details carefully before sending them to us.
7. Available Tax Deductions
Tax deductions reduce your taxable income, thereby lowering your tax liability. Here are the main deductions available:
1. Personal Relief
Amount: LKR 1.8 million per year
Details: First LKR 1.8 million of your total assessable income (local + foreign) is completely tax-exempt.
Applies to: All taxpayers regardless of income source.
2. Solar Installation
Amount: Up to LKR 600,000 per year
Details: Deduction for installation of solar power systems.
Requirements: Proper documentation and certification required.
3. Rent Income Deduction
Amount: 25% of rental income
Details: Can deduct 25% of rental income as maintenance and repair allowance.
Documentation: Keep receipts for actual expenses if they exceed 25%.
4. Approved Donations
Amount: Varies based on donation
Details: Donations to approved charitable organizations are tax-deductible.
List: Check approved organizations at:
IRD Approved Charity ListCombined Deduction Example
If you earn LKR 3,000,000 and have:
- Personal relief: LKR 1,800,000
- Solar installation: LKR 600,000
- Total deductions: LKR 2,400,000
- Taxable income: LKR 600,000
- Tax payable: 6% of LKR 600,000 = LKR 36,000
Without deductions, tax would be LKR 90,000 (saving of LKR 54,000).
8. Penalties for Non-Compliance
Failure to comply with tax regulations can result in significant penalties. Here are the key penalties to be aware of:
1. Failure to register or notify changes in taxpayer (Sec. 177)
Summary
Small Summary: Must register within 30 days after basis period ends. Failure to register or notify changes results in Rs. 50,000 penalty.
A person with taxable income must register with CGIR (commissioner general of inland revenue) within 30 days after the basis period ends and notify any changes (name, address, business location). Failure results in Rs. 50,000 penalty.
Example
Mr. A has taxable income of Rs. 750,000 for Y/A 2020/21 but fails to register by 30th April 2021.
Penalty: Rs. 50,000
2. Late filing of tax returns (Sec. 178)
Summary
Small Summary: Greater of: 5% tax + 1% per month OR Rs. 50,000 + Rs. 10,000 per month. Capped at Rs. 400,000.
The greater of:
- 5% of tax owed + 1% for each month of continued non-compliance
- Rs. 50,000 + Rs. 10,000 for each month after November 30, 2025
Capped at: Rs. 400,000
Example
Mr. B (wholesale/retail trader) filed return on 31st March 2022 instead of 30th Nov 2021. Tax due: Rs. 2,000,000
- 5% penalty: Rs. 100,000
- 4 months late: 4 × 1% = Rs. 80,000
- Total penalty: Rs. 180,000
Plus interest at 1.5% per month on total tax
3. Late Payments (Sec. 179)
Summary
Small Summary: 20% penalty for late tax payments, 10% for late instalments after 14 days grace period.
- Tax payment delay: 20% of tax due but not paid (if unpaid within 14 days of due date)
- Instalment payment delay: 10% of tax due but not paid (if unpaid within 14 days of due date)
- No penalty if extension granted and paid within extension period
Example
If you fail to pay Rs. 100,000 tax by due date + 14 days:
Penalty: 20% of Rs. 100,000 = Rs. 20,000
4. Negligent or Fraudulent under payment (Sec. 180)
Summary
Small Summary: 25% penalty for underpayment, 75% if underpayment > Rs. 10M or >25% of tax liability.
Penalty for underpayment due to incorrect statement or material omission:
- Standard: 25% of underpayment
- Enhanced (if underpayment > Rs. 10M or >25% of tax liability): 75% of underpayment
Example
Mr. X declared tax payable Rs. 200,000, actual Rs. 500,000 (underpayment Rs. 300,000)
25% of tax liability = Rs. 50,000
Underpayment Rs. 300,000 > 25% of liability
Penalty: 75% of Rs. 300,000 = Rs. 225,000
5. False or misleading statements (Sec. 181)
Summary
Small Summary: Greater of Rs. 50,000 OR amount by which tax reduced/refund increased due to false statement.
Penalty for false/misleading statements to tax officials:
- Greater of Rs. 50,000 OR the amount by which tax would have been reduced/refund increased
- Applies to documents, information, replies to questions
- No penalty if person didn't know statement was false
Example
Mr. D understated debtors by Rs. 100,000, reducing tax by Rs. 28,000
Penalty: Rs. 50,000 (greater than Rs. 28,000)
6. Failure to maintain documents or provide facilities (Sec. 182)
Summary
Small Summary: Rs. 1,000 daily for not keeping records, Rs. 10,000 max for not assisting officials. Warning given first.
- Document maintenance failure: Rs. 1,000 per day until compliance
- Facilities/assistance failure: Up to Rs. 10,000
- Warning notice issued before penalty assessment
- No penalty if compliance within warning period
Example
If you fail to maintain documents for 30 days after warning:
Penalty: 30 days × Rs. 1,000 = Rs. 30,000
7. Failure to comply with 3rd party notice (Sec. 183)
Summary
Small Summary: 25% penalty for third parties who fail to pay tax on behalf of defaulters when notified by CGIR.
Failure to comply with section 170 notice (third party payment):
Penalty: 25% of difference between amount payable and amount paid by due date
Example
Mr. X (third-party debtor) asked to pay Rs. 300,000 on behalf of defaulter but fails to comply
Penalty: 25% of Rs. 300,000 = Rs. 75,000
8. Transfer pricing penalties (Sec. 184)
Summary
Small Summary: Various penalties from 1-2% of transaction value to Rs. 100,000-250,000 for transfer pricing violations.
Failure to comply with transfer pricing documentation:
- No documentation maintained: Up to 1% of transaction value
- Documents not submitted: Up to Rs. 250,000
- Non-disclosure of information: Up to 2% of transaction value
- Late submission: Up to Rs. 100,000
- Concealment/evasion: 200% of additional tax
Example
Transaction value: Rs. 50,000,000 with no documentation:
Penalty: Up to 1% of Rs. 50,000,000 = Rs. 500,000
9. Failure to comply with notice to give information (Sec. 185)
Summary
Small Summary: Up to Rs. 1,000,000 penalty for not providing requested information. Warning with 30-day compliance period.
- Penalty: Up to Rs. 1,000,000 for failure to provide requested information
- Warning notice issued with 30-day compliance period
- No penalty if compliance within warning period
- CGIR may waive penalty for reasonable cause
- 5-year limitation period for penalty assessment
Example
Failure to provide requested documents after warning:
Penalty: Up to Rs. 1,000,000 as determined by Commissioner-General
More Penalty Details
For complete details on all penalties, refer to the official Inland Revenue Act:
Download Full Inland Revenue Act (PDF) සිංහල (PDF) தமிழ் (PDF)9. What Part of Your Income Is Tax-Free?
The first LKR 1,800,000 of your total assessable income (local + foreign) is completely tax-exempt. This exemption applies regardless of whether the income is earned locally or from abroad.
Key Point
This tax-free threshold applies to your total income from all sources, not per source. If you have multiple income streams, they are combined before applying the exemption.
10. Tax Slabs
As a local employee, after the personal relief, your income is taxed according to the following progressive slabs:
Personal Relief
First LKR 1,800,000
0% Tax
1st Tier
Next LKR 1,000,000
6% Tax
2nd Tier
Next LKR 500,000
18% Tax
3rd Tier
Next LKR 500,000
24% Tax
4th Tier
Next LKR 500,000
30% Tax
Balance Income
Remaining Amount
36% Tax
Example Calculation
If your total taxable income is LKR 5,000,000:
- LKR 1,800,000 – Exempt (Personal Relief)
- Next LKR 1,000,000 – 6% = LKR 60,000
- Next LKR 500,000 – 18% = LKR 90,000
- Next LKR 500,000 – 24% = LKR 120,000
- Next LKR 500,000 – 30% = LKR 150,000
- Remaining LKR 700,000 – 36% = LKR 252,000
- Total Tax Payable: LKR 672,000
11. How and When Is Your Tax Paid?
As an Uber Sri Lanka employee, your income tax is deducted directly from your monthly salary by your employer under the APIT (Advance Personal Income Tax) scheme. This means you do not need to make quarterly self-payments — the deduction happens automatically each pay cycle based on the applicable APIT tax tables.
APIT Tax Tables 2025/26
Your employer calculates the monthly deduction using the official IRD APIT tax tables for the 2025/26 year:
APIT Tax Table 2025/26 (PDF)Your Responsibility
Since tax is deducted monthly by Uber Sri Lanka, your main task is to verify your T10 certificate at year-end and ensure the final return is filed correctly — no quarterly installment action is needed on your part.
Final Return Deadline
The final tax return must be submitted by 30th November 2026.
12. What TeLiAudit Does for You as Your Tax Agent
As your registered tax agent, TeLiAudit provides comprehensive support to ensure you remain compliant with IRD rules without any disputes. Here's how we help:
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Guidance for Dispute-Free Compliance We instruct you on how to comply with all IRD rules and regulations, ensuring your tax affairs are in order and minimizing the risk of audits or penalties.
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Timely Notifications We send you timely reminders and notifications about upcoming deadlines, ensuring you never miss a filing date.
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T10 & WHT Verification We check your T10 and WHT documents for period, amount, and deduction accuracy before they're used in your tax computation.
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Final Annual Computation At the end of the tax year, we prepare your final tax computation, accounting for any deductions or adjustments.
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Final Return Submission We handle the complete process of filing your final income tax return with the IRD via the RAMIS portal, ensuring accuracy and timely submission.
Special Annual Package
Complete tax handling for the entire year
Only LKR 10,000/- for all your tax matters
*Including T10/WHT verification & final return
We're Here for You
You can contact us anytime to sort out your tax matters. Our team is ready to assist with any questions or concerns.
+94 710 993 555 (Hotline)
+94 710 993 555 (WhatsApp)
teliaudit@gmail.com
www.teliaudit.lk
13. Try Our 2025/26 Tax Calculator
Estimate Your Tax in Seconds
Want to quickly estimate your tax liability for the 2025/26 year? Use our free online Sri Lanka Tax Calculator — just enter your income details and get an instant estimate based on the current tax slabs.
Open Sri Lanka Tax Calculator 2025/2614. Q&A Session
Have Questions?
If you have any personal tax-related questions or need clarification on any topic discussed, we're here to help!
Visit our Q&A platform where you can find answers to common questions or ask your own:
Visit TeLiAsk Q&A PlatformThank You!
We sincerely thank Uber Sri Lanka for allowing us to present this important tax information. We hope this presentation has been informative and helpful for understanding your tax obligations as employees in Sri Lanka.