Tax Savings: Apply for Your Withholding Tax Exemption

by Staff Writer 01-04-2025 | 1:47 PM

COLOMBO (News 1st); The Department of Inland Revenue has announced that individuals with an annual income below Rs 1.8 million can now apply for a withholding tax exemption.

According to a circular issued by the department, eligible individuals must submit a self-declaration to their respective banks or financial institutions to avail of this tax relief.

Effective immediately, the department has informed banks and financial institutions to implement a 10% reduction in withholding tax on interest paid to any depositor.

Additionally, new personal income tax rates will be applied from today under the revised limits.

The Inland Revenue (Amendment) Act, which was gazetted in February, outlines the new personal income tax thresholds:

- Monthly income up to Rs 150,000: Tax-free

- Monthly income exceeding Rs 150,000 up to Rs 233,334: 6% tax (Rs 5,000)

- Monthly income exceeding Rs 233,334 up to Rs 275,001: 18% tax (Rs 7,500)

- Monthly income exceeding Rs 275,001 up to Rs 316,668: 24% tax (Rs 10,000)

- Monthly income exceeding Rs 316,668 up to Rs 358,335: 30% tax (Rs 12,500)

- Monthly income exceeding Rs 358,335: 36% tax