Personal Income Tax Calculator

For the tax year 2025/2026 (Year of Assessment), the personal relief is LKR 1,800,000 per annum. This means the first LKR 1,800,000 of taxable income is exempt from income tax for resident individuals and non-resident Sri Lankan citizens. Non-resident non-citizens do not qualify for this relief, and progressive tax rates apply on their full income.

The annual progressive slabs for 2025/2026 are: first LKR 1,000,000 at 6%; next LKR 500,000 at 18%; next LKR 500,000 at 24%; next LKR 500,000 at 30%; and balance above LKR 2,500,000 at 36%. These slabs apply after deducting personal relief (LKR 1,800,000) and qualifying payments from total taxable income.

Foreign-sourced income is taxed differently depending on how it is received. Income remitted to Sri Lanka through a licensed Sri Lankan bank or financial institution is subject to a concessionary maximum tax rate of 15%. Foreign income that is not remitted through a Sri Lankan bank is taxed at the standard progressive rates, which can go up to 36%. This distinction makes the remittance channel a critical tax planning decision for individuals with offshore income.

An individual is considered a tax resident of Sri Lanka if they are physically present in Sri Lanka for 183 days or more in a tax year, or if they maintain a permanent place of abode in Sri Lanka. Residency affects tax obligations on worldwide income. Non-residents are generally taxed only on Sri Lanka-sourced income, with different rules applying to non-resident citizens vs. non-citizen non-residents.

Qualifying payments are expenditures that can be deducted from taxable income to reduce the tax liability. Examples include: expenditure on solar panels and renewable energy equipment (up to LKR 600,000), contributions to approved retirement savings schemes, and donations to approved charities. The total qualifying payment relief claimed must not exceed specified caps as per IRD guidelines. Consult a tax professional to verify eligibility for specific items.

Yes. The personal income tax calculation in this tool covers annual employment income, business income, and foreign income combined. For monthly APIT deductions on employment income specifically, use the Local Tax Calculator or the Foreign Employment Income Tax Calculator. This annual calculator is best for year-end tax return planning and comparing the impact of different income structures.

Individuals whose annual income exceeds the LKR 1,800,000 personal relief are required to file an annual income tax return through the IRD RAMIS online system. The return covers the period from 01 April to 31 March. Filing deadlines are typically in late November. Failure to file or late filing attracts penalties under the Inland Revenue Act.