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Inland Revenue (Amendment) Law


Published: 1975

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Inland Revenue (Amendment) Law

Inland Revenue (Amendment) Law

A LAW TO AMEND THE INLAND REVENUE ACT, NO. 4 OF 1963
BE it. enacted by the National State Assembly of the Republic of Sri Lanka as follows:
Short title. 1. This Law may be cited as the Inland Revenue (Amendment) Law, No. 18 of 1975.
Amendment of section 3 of Act No. 4 of 1963. 2. Section 3 of the Inland' Revenue Act, No. 4 of 1963, (hereafter in this Law referred to as the " principal enactment ") as last amended by Law No. 1 of 1974, is hereby further amended in subsection (1) of that section by the addition, at the end of sub paragraph (i) of paragraph (h), of the following new item;
" (e) a change of ownership of any residential premises occurring on or after November 1, . 1973, on the death of the owner thereof, where the property of which the deceased was at the time of his death competent to dispose within the meaning of the Estate Duty Ordinance does not include any other residential premises and the total estate within the meaning of that Ordinance of the deceased does not exceed one hundred and fifty thousand rupees in value.
Amendment of section 5 of the principal enactment. 3.
(1) Section 5 of the principal enactment, as last amended by Law No. 1 of 1974, is hereby further amended in subsection (1) of that section as follows:
(a) by the substitution, for paragraph (ad) of that subsection, of the following new paragraph:
"(ad) for any year of assessment commencing on. or after April 1, 1978, the profits and income derived by the owner or cultivator of any paddy land from the sale of paddy cultivated on such land.
(i) to the Paddy Marketing Board established under . the Paddy Marketing Board Act, No.: 14 of 1971, or to any authorized purchaser within the meaning of. that Act; or
(ii) to the Director of Agriculture or to any officer of the Department of Agriculture authorized by such Director;" ; and
(b) by the insertion, immediately after paragraph (cc) of that subsection (inserted therein by Act No. 33 of 1971) of the following new paragraph:
" (ccc) the profits and income of the Coconut Development Authority, the Coconut Research Board, and the Coconut Cultivation Board, established by or under the Coconut Development Act, No. 46 of 1971;".
(2) The amendment made in section 5 of the principal enactment by paragraph (a) of subsection (1) of this section shall be deemed to have come into operation on January 10, 1974, being the date on which Law No, 1 of 1974; came into force.
Amendment of section 7A of the principal enactment. 4.
(1) Section 7A of the principal enactment (inserted therein by Law No. 17 of 1972) is hereby amended in subsection (9) of that section as follows:
(a) by the substitution, for the definition of
"export profits and income ", of the following new definition; - " export profits and income ", when used in relation to a company or an under taking, means the sum which bears to the profits and income (within the meaning of paragraph (a) of sub section (1) of section 3 after excluding any profits and income which are exempt from income tax under section 5A of this Act) of the company or undertaking, computed in accordance with the provisions of this Act, the same proportion as the export turnover of that company or undertaking bears to the total turnover of that company or undertaking;5;
(b) by the substitution, for the definition of export turnover ", of the following new definition: -
'" export turnover " when used in relation to a company or undertaking means the total amount received or receivable by that company or undertaking from the export of goods or commodities, or from the provision of services for payment in foreign currency, excluding-
(a) any amount received or receivable by the sale of capital assets;
(b) any amount received or receivable from the sale of gems where the profits and income arising from such sale are exempt from income tax under section 5A of this Act;
(c) any amount received or receivable from the export of black tea in bulk, crepe rubber, sheet rubber, coconut oil, dessicated coconut, copra, fresh coconuts, coconut fibre or any other commodity specified for the purposes of this section by the Minister by Notification published in the Gazette; and
(d) any profits and income not being profits and income within the meaning of paragraph (a) of subsection (1) of section 3; and
(c) by the substitution, for the definition of " total turnover ", of the following new definition: -
' " total turnover " when used in relation to a company or undertaking means the total amount received or receivable by that company or undertaking from any trade or business carried on or exercised by that company or undertaking, excluding-
(a) any amount received or receivable by the sale of capital assets;
(b)any amount received or receivable from the sale of gems where the profits and income arising from such sale are exempt from income tax under section 5A of this Act;
(c) any profits and income other. than profits and income within the meaning of paragraph (a) of subsection (1) of section 3.'.
(2) The amendments made' in section 7A of . the principal enactment by subsection (1) of' this section shall be deemed for all purposes, to have come into .operation on the date on which the provisions of the aforesaid section 7A are deemed to have come into operation.
Amendment of section 21 of the principal enactment. 5. Section 21 of the principal enactment, as amended by Act No. 6 of 1969, is hereby further amended by the repeal of " subsection (6A) of that section/and the substitution therefor of the following new subsection:
"(6A) Subsection (6) of this section shall have effect in its application-
(a) in respect of each year of assessment commencing on or after April 1, 1969 but not later than April 1, 1978, as though for the words " five hundred rupees " there were substituted the words " nine hundred rupees " and
(b) in respect of each year of assessment commencing on or after April 1,1974, as though for . . 'the words-five hundred rupees", there were substituted the words ' one thousand two hundred rupees" '.
Amendment of section 42 of the principal enactment. 6. Section 42 of the principal enactment is hereby amended as follows: -
(1) by the repeal of subsection (2) of; that section and the substitution therefor of the following new subsection:
'(2) For every year of assessment (here-after- in this subsection referred to as the " relevant year of assessment "), commencing on, or after April 1, 1963, but not later than April 1,1973, the value of the taxable gifts made in the year preceding the relevant year of assessment by any person liable to the gifts tax shall be added to the value of the taxable gifts made by him on or after July 18., 1958, and before such preceding year. Then, assuming that the sum resulting from such addition Is the value - of the* taxable gifts in respect of which gifts tax is chargeable, the amount of such tax shall be computed by the application of the appropriate rates of gifts tax. From the amount so computed . there shall be deducted all sums paid by him previously, whether by way of contributions in respect of taxable gifts to the Personal, . Tax levied under the Personal Tax Act, No. 14 of 1959 or as gifts tax under this Act. The amount "left after such deduction shall be the amount of the gifts tax In respect of his taxable gifts for the relevant year of assessment and
(2) by the Insertion, Immediately after subsection (2) of that section,, of the following new subsection- .
(2A) For every year of assessment commencing on or after April 1,. 1974, the gifts tax payable by any person In respect of his taxable gifts shall be the difference between-
(a) the amount computed at such rates of gifts tax specified in the Sixth Schedule to this Act - as are applicable to the taxable gifts made In the year preceding that 'year of assessment (hereafter In this subsection referred to as " the preceding year ") on the aggregate of the values of all taxable gifts within the meaning of this Act or of the Personal Tax Act, No. 14.of 1959, made by such person on or after 18th July, 1958, and before the end of the preceding year; and
(b) the amount computed at such rates of. gifts tax specified In the Sixth Schedule to this Act as are applicable to the taxable gifts made in the preceding year on the aggregate of the value of the taxable gifts, within the meaning of this Act or of the Personal Tax Act, No. 14 of 1959, made by such person on or after 18th July, 1958, and before the commencement of the preceding year."
Insertion of new section 69C in the principal enactment. 7. The following new section Is hereby Inserted Immediately after section 69B , and shall have effect as section 69C, of the principal enactment: "
"Relief In respect of persons ceasing to carry on a profession and commencing, an employment. 69C. Where, for any year of assessment commencing on or after April 1, 1972, the profits and income of any person Includes-
(a) the profits and income from any profession or vocation which he has ceased to carry on or exercise In the year preceding that year of assessment and profits from any . employment which he commenced to carry on or exercise either in the year preceding that year of assessment or In that year of assessment, or
(b) profits and income from any profession or vocation which, he ceased; to carry on or exercise In that year of assessment and profits from employment which he commenced to carry on or exercise in that year of assessment,
the Commissioner-may,-upon: a written application made by such person on or before December 31, 1975, grant him such relief as the- circumstances of the case may require. Where such relief is granted, then, notwithstanding anything contained In sections 108 and 117, the assessment" made In respect of that person shall be amended and any sum paid In excess of the tax charged by the amended assessment shall be refunded to such person
Amendment of section 73 of the principal enactment. 8. Section 73 of the principal enactment is hereby amended by the addition at the end of that section of the following new subsection:
"(9) Notwithstanding the provisions of subsections (2), (3), (4), (6A) and 8, in respect of each year of assessment commencing on or after April 1, 1973-
(a) in the case of any person holding for the time being the office of Prime Minister, Minister, (other than the Prime Minister), Speaker, Deputy Speaker or Deputy Chairman of Committees of the National State Assembly or Deputy Minister, a sum of seven hundred rupees out of the monthly remuneration paid to such person by the Government of Sri Lanka, in lieu of the sum of three hundred rupees referred to in subsections (2), (3), (4) and (6A) , shall not be taken into consideration in ascertaining the profits and income arising to such person from that office; and
(b) in the case of any person who is a member of Parliament (other than any person referred to in paragraph (a), a sum of seven hundred rupees out of the monthly remuneration paid to such person by the Government of Sri Lanka, in lieu of one-half of the amount of the other allowances referred to in subsection (8) shall not be taken into consideration in ascertaining the profits and income of such person in his capacity as such member ."."
Amendment of section 96B of the principal enactment. 9.
(1) Section 96B of the principal enactment (inserted therein by Law No. 17 of 1972) is hereby amended as follows: -
(a) by the repeal of subsection (2) of that section and the substitution therefor of the following new subsection.-
" (2) The first two quarterly instalments for the year of assessment commencing on April 1, 1972, shall be paid on or before the fifteenth day of January, 1973, and the next two quarterly instalments on or before the fifteenth day of February and the thirtieth day of April, 1973, respectively and the quarterly instalments for any subsequent year of assessment shall be paid on or before the fifteenth day of August, November and February of that year of assessment and the fifteenth day of May of the next succeeding year of assessment respectively;
(b) by the repeal of subsection (6) of that section and the substitution therefor, of the following new subsection : -
"(6) "Where a quarterly instalment of tax or a portion of such instalment is in default, the defaulter shall, in addition to the amount of tax in default, pay as a penalty-
(a) a sum equivalent to live per centum of the amount in default, and
(b) where the amount in default is not paid before the expiry of thirty days after it has begun to be in default, in respect of each further period of thirty days or part of such period during which it is in default, a further sum equivalent to one per centum of the amount in default:
Provided that the total amount payable as a penalty under the preceding provisions of this section shall in no case exceed twenty-five per centum of the tax in default; and
(c) by the addition, at the end of that section, of the following new subsection:
"(7) Any penalty payable under this section may be waived or reduced in such circumstances and to such extent as the Commissioner may determine".
(2) The amendment made in section 96B of the principal enactment by paragraph (c) of subsection (1) of this section shall be deemed to have come into force on April 1, 1972, and shall apply to every year of assessment commencing on or after that date.
Insertion of new section 116A in the principal enactment. 10. The following new section is hereby inserted Immediately after section 116, and shall have effect as section 116A, of the principal enactment:
" Delegation of Commissioner's powers and functions. 116A.
(1) The Commissioner may, by writing under his hand, delegate to any Assessor any of the powers or functions vested in the Commissioner under this
(2) Every Assessor to whom any power or function has been delegated under subsection (1) shall exercise or perform that power or function subject to the general or special directions of the Commissioner.".
Amendment of the Sixth Schedule to the principal enactment. 11. The Sixth Schedule to the principal enactment is hereby amended by the substitution, for the expression " in Part II of the Fifth Schedule ", of the following:
" in Part II of the Fifth Schedule subject however to the variation that for gifts made during the year preceding any year of assessment commencing on or after April 1, 1974, the rate on the first Rs. 50,000 of the value of all taxable gifts shall, in lieu of the 5 per centum specified in that Part of that Schedule, be 3 per centum.