101.
| (1) Where a body of persons, whether corporate or unincorporate, carries on a club or similar institution and receives from its members not less than three-fourths of its gross receipts on revenue account (including entrance fees and subscriptions), it shall not be deemed to carry on a business; but where less than three-fourths of its gross receipts are received from members, the whole of the income arising from transactions both with members and others (including entrance fees and subscriptions) shall be deemed to be receipts from a business, and the body of persons shall be liable to income tax in respect of the profits therefrom and in respect of the income which would be assessable, if it were not deemed to carry on a business. |
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| (2) Where a body of persons, whether corporate or unincorporate, carries on a trade association, chamber of commerce or similar institution in such circumstances, that more than half its receipts by way of entrance fees and subscriptions are from persons who claim or would be entitled to claim that such sums were allowable deductions for the purpose of section 25, such body of person shall be deemed to carry on a business, and the whole of its income from transactions both with members and others (including entrance fees and subscriptions) shall be deemed to be receipts from a business, and the body of persons shall be liable to income tax either in respect of the profits therefrom or in respect of the income which would be assessable, if it were not deemed to carry on a business, whichever is the greater. |
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| (3)In this section, "members", in relation to a body of persons, means those persons who are entitled to vote at a general meeting of the body which exercises effective control over its affairs. |
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| (4) Nothing in this section shall be read and construed as affecting any exemption granted under Chapter III. |
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| (5) The provisions of Chapter X shall not apply to any body of persons which is a body corporate and which is assessable for income tax under this section. |
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Sri Lanka Consolidated Acts