How to file your income tax return in Sri Lanka for Y/A 2025/2026 and Y/A 2026/2027

Last verified against the primary sources on 15 October 2026.

Income tax returns for Y/A 2025/2026 are due by 30 November 2026, for individuals, partnerships and companies with a 31 March year end alike. The final payment of tax for that year was due earlier, on 30 September 2026 [1]. A late return attracts a penalty under section 178 of the Inland Revenue Act No. 24 of 2017 (the IRA) of the greater of 5 percent of the tax owing plus 1 percent a month, and LKR 50,000 plus LKR 10,000 a month, capped at LKR 400,000 a return [2].

Two changes in particular make this filing cycle different from prior years. First, the Inland Revenue (Amendment) Act No. 11 of 2026 discontinued the Statement of Estimated Tax (SET), so quarterly instalments for Y/A 2026/2027 are worked out from the previous year's tax with no estimate form to file [3]. Second, the same Act extended the existing exemption for employees taxed through APIT. Since 1 April 2022, an employee whose only income is employment income fully covered by APIT has not had to file a return (s.94(1)(c), inserted by Act No. 45 of 2022) [2]. From 1 April 2025, interest of up to LKR 5,000 no longer forces a return either (new s.94(1)(d)) [3].

Whether you are a salaried employee with additional investment income, a sole proprietor, or a company secretary finalising the corporate return, this guide covers who must file, what to declare, how the numbers work, and how to work through RAMIS without errors.

Who must file an income tax return in Sri Lanka

Quick answer: The duty to file a return is in section 93 of the Inland Revenue Act, with exemptions in section 94 [2]. A resident individual whose income for the year is above the personal relief of LKR 1,800,000 generally files, unless the only income is employment income fully covered by APIT (plus interest up to LKR 5,000) [2] [3]. Companies and partnerships file every year, whether they made a profit or a loss.

The filing obligation applies to:

• Resident individuals: employment income, business income, investment income (interest, dividends), and rental income that together exceed LKR 1,800,000 in the year, other than employees covered by the APIT-only exemption
• All companies: including private limited companies, public companies, and branches of foreign companies registered in Sri Lanka, regardless of whether a profit or loss was made
• Partnerships: at the entity level, irrespective of individual partner shares
• Non-resident individuals: with Sri Lanka-source income above the applicable threshold

Even if your total income falls below the filing threshold, the IRD can require you to submit a return.

One important nuance: APIT (Advance Personal Income Tax) deducted by your employer does not remove your filing obligation if you have other income sources. APIT is a withholding mechanism, not a final settlement. Employment income already subject to APIT must still be declared in your individual return if you have business, rental, or investment income in addition to your salary.

If a return includes course or training fees, retain the evidence supporting the claimed education-expense deduction.

For a personal return, reconcile the income-tax calculation and relief assumptions to the income and credits actually declared.

Key deadlines for Y/A 2025/2026 returns and Y/A 2026/2027 quarterly instalments

Dates are from the IRD Tax Calendar 2026 [1]. The 30 November deadline applies to the year of assessment ending 31 March 2026, not the current Y/A 2026/2027, which runs from 1 April 2026 to 31 March 2027. That return will be due 30 November 2027.

From Y/A 2026/2027 you work out each instalment yourself: the previous year's tax, less instalments already paid and tax withheld from your income during the year, divided by the number of instalments left, under section 90(3) as amended by section 16 of Act No. 11 of 2026 [3]. The IRD's Circular SEC/2026/E/06 (Re-Revised) sets out the method, and the alternative where there was no prior-year income or income is expected to fall [4]. See the SET form abolished guide for worked examples.

Check the tax compliance calendar for all IRD due dates across the full year.

What income must be declared

Resident individuals must declare all income from every source for the year of assessment, including:

• Employment income: salary, allowances, bonuses, director fees, and any other emoluments from all employers during the year
• Business income: profits from sole proprietorships, freelance work, trade, or professional practice
• Investment income: interest on deposits and loans, dividends, and returns from unit trusts
• Rental income: rent from land, buildings, and equipment
• Other income: capital gains on disposal of investments where applicable, and any income from foreign sources remitted to Sri Lanka

Points that often go wrong:

• Interest is not final-taxed for residents; dividends are. WHT on interest paid to a resident individual is not a final tax (section 88(1A)) [2]: declare the interest and claim the tax withheld as a credit. Dividends paid by a resident company to a resident individual from 1 January 2023 are a final withholding payment at 15 percent (section 88(1A)(aa), inserted by Act No. 45 of 2022): list them in Schedule 6A of the return, but do not add them to income and do not claim the 15 percent as a credit.
• Dividends. Do not assume dividends you receive are exempt; check the exemptions in the Act before leaving them out.
• Foreign remittances. The rules on foreign-source income changed under the 2022 and subsequent amendments; confirm the current residency and remittance basis rules before declaring.

Non-resident individuals declare only Sri Lanka-source income. The applicable withholding rates and treaty positions depend on the country of residence and whether a double tax agreement applies.

How to calculate your tax liability: relief, bands, and worked example

Sri Lanka's personal income tax is calculated in three steps: first subtract relief, then apply the progressive bands to the balance, then offset any withholding tax credits.

Step 1: Apply personal relief

For Y/A 2025/2026 and Y/A 2026/2027, the personal relief for a resident individual (or a non-resident Sri Lankan citizen) is LKR 1,800,000 under section 52 of the IRA and paragraph 2(a)(v) of the Fifth Schedule, as amended by the Inland Revenue (Amendment) Act No. 2 of 2025 [2]. This is the annual threshold below which no income tax arises.

Other reliefs include 25 percent of rental income for repairs and maintenance, solar panel relief and qualifying donations. The old reliefs for education and pension contributions were time-limited to periods ending in December 2022, and there is no relief for rent on your own residence [2]. See the income tax relief guide for the full list and caps.

Taxable income = Total income minus personal relief (LKR 1,800,000) minus qualifying deductions

Step 2: Apply the five-band rate structure

These bands and rates are unchanged for Y/A 2026/2027 [2]. For the full band table and APIT impact analysis, see the income tax bands guide.

Worked example: individual with salary and rental income

Take a hypothetical individual with salary and rental income, before any rental relief:

The APIT figure is the tax on the salary alone at the same bands: LKR 3,600,000 less the LKR 1,800,000 relief leaves LKR 1,800,000, taxed at 60,000 + 90,000 + 72,000. The balance comes from the rental income, which APIT does not cover. The balance of LKR 168,000 was payable by 30 September 2026 [1], two months before the return is due. If it was paid late, interest at 1.5 percent a month or part month runs from that date (sections 157 and 159) [2]. If you overpaid, a refund claim can be made through RAMIS.

Filing through RAMIS: step-by-step process

Returns are filed electronically through RAMIS (Revenue Administration and Management Information System), reached from the IRD's e-Services page. Electronic filing has been mandatory for companies since Y/A 2021/2022 and for every person since Y/A 2023/2024, unless the Commissioner-General authorises a paper return (section 113) [2]. Act No. 11 of 2026 allows senior citizens to file on paper [3].

Before you start

Gather these documents before logging in:

• Your Tax Identification Number (TIN)
• Employer-issued APIT schedules or employee certificate
• Bank statements for interest income
• Tenancy agreements and rent receipts for rental income
• WHT certificates from all payers

If you do not yet have a TIN or your RAMIS registration is inactive, you must register or reactivate before filing. The IRD's Guide to Registration and Update (available from ird.gov.lk) covers the registration process. See also the RAMIS filing guide for a detailed portal walkthrough.

Filing steps

1. Log in to RAMIS: open the e-Services page and log in with your TIN and registered password. First-time users must complete the one-time registration and verification step.

1. Select the correct return type: choose the individual income tax return for individuals or the relevant entity type for companies and partnerships. Select the correct year of assessment: for the 30 November 2026 deadline, select Y/A 2025/2026.

1. Enter income details: review any figures the system shows from employer APIT submissions, and add all other income sources: rental income, interest, business income, and any foreign remittances.

1. Claim qualifying deductions: enter any qualifying payments under section 52 of the IRA and paragraph 1 of the Fifth Schedule. Keep the supporting evidence ready in case the IRD asks for it.

1. Review the computed liability: verify the tax figure against your own calculation before proceeding.

1. Enter WHT credits: input all WHT amounts deducted at source during the year, so they are set against the liability to arrive at the net tax payable or refundable.

1. Submit and pay any balance: confirm the return and submit. Any balance should already have been paid by 30 September 2026; if it is still unpaid, pay it now through the IRD's payment channels to stop interest running.

1. Download the acknowledgement: save the RAMIS acknowledgement of submission. This is your proof of timely filing.

WHT credits, overpayments, and refund claims

Withholding tax (WHT) deducted from your income during the year is a prepayment of your income tax liability, not a separate tax. Tax withheld from a payment that is not a final withholding payment is credited against your income tax for the same year of assessment (section 89) [2].

Common sources of WHT credits for individuals [5] [6]:

See the guides to AIT on rent and 5 percent WHT on service fees for how payers apply these.

WHT certificates are issued by the payer and must be held by the taxpayer as supporting evidence. Enter each credit from your certificates and check that none is missing.

If total WHT and APIT credits exceed the computed tax liability, the excess is refundable. Claim the refund through RAMIS when you submit the return, and have your bank account details ready.

Common mistakes that trigger penalties

These are the filing errors that most commonly result in penalties or assessments:

1. Filing late The late filing penalty under section 178 is the greater of 5% of the tax owing plus 1% for each month or part month, and LKR 50,000 plus LKR 10,000 for each month or part month, capped at LKR 400,000 [2]. A return with no tax owing that is three months late costs LKR 80,000 (50,000 plus 3 x 10,000). The LKR 50,000 figure on its own is the maximum penalty for failing to register under section 177, a separate one-off charge [2].

2. Declaring only employment income Taxpayers with investment or rental income frequently omit those sources on the assumption that APIT from their employer covers everything. It does not. Every source of income must be declared separately.

3. Using the wrong year of assessment RAMIS requires you to select the correct Y/A. Submitting a Y/A 2024/2025 return when you mean Y/A 2025/2026 creates a mismatch that is difficult and time-consuming to correct after the fact.

4. Not reconciling APIT certificates with what the system shows If your employer reported APIT with an error, any figure carried into your return is wrong. Always cross-check it against your own employer-issued certificate.

5. Omitting WHT credits WHT credits that are not entered in the return are not set against the liability, so you may face a demand for tax you have already suffered.

6. Treating 30 November as the payment date For Y/A 2025/2026 the balance was due on 30 September 2026, for companies and individuals alike [1]. Paying with the return in November, two months late and well past the fourteen day window, means a penalty of 20 percent of the unpaid tax under section 179(1) [2] [7], plus two months of interest at 1.5 percent a month under section 159(1) [2]. A late quarterly instalment carries 10 percent under section 179(2) instead [2].

7. Assuming RAMIS will calculate everything correctly The system does not validate the quality of the data entered. Errors in the income figures flow directly into the computed liability.

Frequently asked questions

Do I need to file a return if my employer deducted APIT from all my salary income?

Not if employment income fully covered by APIT is your only income, apart from interest of up to LKR 5,000 [2] [3]. If you have any other income (rental, interest above that amount, business income, or foreign remittances) and your total income exceeds LKR 1,800,000, file a return and declare all sources. For the tax taken from interest, see withholding tax on interest.

What is the penalty for filing late?

Under section 178, the greater of 5% of the tax owing plus 1% a month, and LKR 50,000 plus LKR 10,000 a month, capped at LKR 400,000, in addition to interest on any unpaid tax balance [2]. Each part of a month counts as a month, so a filing on 1 December 2026 already incurs the first month.

Can I file a paper return instead of using RAMIS?

Generally no. Electronic filing has been mandatory for every person since Y/A 2023/2024 and for companies since Y/A 2021/2022, unless the Commissioner-General authorises a paper return [2]. Senior citizens may file on paper under Act No. 11 of 2026 [3].

The SET form I used to file: do I still need to file it for Y/A 2026/2027?

No. Act No. 11 of 2026 discontinued the SET from Y/A 2026/2027 [3]. You compute each instalment from the previous year's tax, less instalments already paid and tax withheld, divided by the instalments left. See the SET form abolished guide for a full explanation.

What if I overpaid tax through APIT and WHT during the year?

You can claim a refund through RAMIS when you file your annual return. The excess (tax credits minus computed liability) is assessed and refunded to your nominated bank account.

I have foreign income. Do I need to declare it?

Resident individuals must declare foreign-source income based on the remittance rules applicable to their status. Non-resident individuals are generally taxed only on Sri Lanka-source income. The rules on foreign income have been amended under the 2022 and subsequent amendments, so check the current position before excluding foreign income from your return.

Talk to us. If you would rather not work through the return yourself, our tax team can prepare it with you; book a consultation at our contact page.

WinCore Pvt Ltd

This guide is general information on the law as at 15 October 2026 and is not advice on your specific situation.

References

1. Inland Revenue Department. Tax Calendar 2026, 30 September 2026 final payment and 30 November 2026 returns for Y/A 2025/2026, instalment dates. https://www.ird.gov.lk/en/publications/Tax%20Calendar_Documents/Tax_Calendar_2026_E.pdf . Primary. Accessed 15 October 2026.

1. Inland Revenue Department. Inland Revenue Act, No. 24 of 2017, consolidated, ss.52, 88, 89, 93, 94 (including s.94(1)(c) inserted by Act No. 45 of 2022), 113, 157, 159, 177, 178, 179, First and Fifth Schedules. https://www.ird.gov.lk/en/publications/Acts_Income%20Tax_2017/IRA_Cons_Act_-_2025_Changes.pdf . Primary. Accessed 15 October 2026.

1. Parliament of Sri Lanka. Inland Revenue (Amendment) Act, No. 11 of 2026, certified 3 June 2026, ss.16, 17 and 19 (new s.94(1)(d)) and the senior citizens' paper filing provision. https://www.ird.gov.lk/en/publications/Acts_Income%20Tax_2017/IR_Act_No_11-2026_E.pdf . Primary. Accessed 15 October 2026.

1. Inland Revenue Department. Circular SEC/2026/E/06 (Re-Revised), quarterly instalments under section 90(3) (12 August 2026). https://www.ird.gov.lk/en/publications/Circulars_Circulars/SEC_2026_E_06_ReRiv_E.pdf . Primary. Accessed 15 October 2026.

1. Inland Revenue Department. Tax Chart, Y/A 2025/26, WHT/AIT rates from 1 April 2025. https://www.ird.gov.lk/en/publications/SitePages/tax_chart_2526.aspx . Primary. Accessed 15 October 2026.

1. Inland Revenue Department. Circular SEC/2026/E/04, Withholding Tax / Advance Income Tax (8 June 2026), rate table. https://www.ird.gov.lk/en/publications/Circulars_Circulars/SEC_2026_E_04_E.PDF . Primary. Accessed 15 October 2026.

1. Inland Revenue Department. Guide to the Return of Income Tax, Y/A 2025/26, Section 09, penalty of 20 percent of tax due but not paid, 10 percent on a late instalment, interest at 1.5 percent a month or part of a month. https://www.ird.gov.lk/en/Downloads/IT_Individuals_Doc/Asmt_IIT_004_2025_2026_E.pdf . Primary. Accessed 15 October 2026.