Tuesday, 16 October 2018 07:06

Finance Ministry makes several amendments to IR Act

Finance Ministry will make several amendments to the Inland Revenue Act, No.24 of 2017 with the aim of easing economic burden on some segments of the society, official sources said.

The amendments to the Inland Revenue Act, as proposed by the Minister of Finance, with the view of effective implementation, have been approved by the Cabinet of Ministers by the decisions dated 27.03.2018 and 30.05.2018.

The Legal Draftsman has been instructed to draft the necessary legal provisions to give effect to the cabinet decisions.

Minors of fewer than 18 years of age will be exempted from 5 percent withholding tax imposed on the interest earned by children on deposits maintained in any financial institutions, the ministry said.

According to the proposed amendment to the act Withholding Tax (WHT) rate applicable
on rent will be reduced to 5 percent from 10 percent.

WHT exemption of the Royalty payments will be made for residents, whose house rent do not exceed Rs.50, 000/- per month, subject to a maximum of Rs. 500,000/-per year of assessment.

WHT exemption will be granted to on the lease rentals paid to non-residents in relation to the Leasing of Aircrafts, by a resident entity engaged in the air transportation.
Interest paid to non-residents on loans obtained by any person will be exempted from income tax.

WHT Exemption will be given to non-residents for any gain including interest, discount or capital gain earned by them on sovereign bonds denominated in local or foreign currency, issued by or on behalf of the Government.


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