32.
| (1) The assessable income of a person (other than a company) for any year of assessment shall be his total statutory income for that year, other than the -
| | (a) statutory income from interest from which income tax has been deducted under section 133 or section 135; | | |
| | (b) statutory income from dividends from which income tax has been deducted under subsection (1) of section 65, whether received directly from such company which distributes the dividend or through any other company; and | | |
| | (c) statutory income from interest arising or accruing to any individual in respect of a secondary market transaction on any Security or Treasury Bond issued under the Registered Stock and Securities Ordinance (Chapter 420) or Treasury Bill issued under Treasury Bills Ordinance (Chapter 417) or Central Bank Securities issued under the Monetary Law Act (Chapter 422), and from the interest on which tax under section 134 has been deducted from a primary dealer, | | |
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| (2) The assessable income of any primary dealer, shall not include any interest income received or accruing where -
| | (a) tax on the total amount of such interest has been deducted under section 134; and | | |
| | (b) such interest income has been accrued or arisen to such primary dealer in respect of a primary market transaction on any Security or Treasury Bonds issued under the Registered Stocks and Securities Ordinance (Chapter 420), or Treasury Bill issued under the Local Treasury Bills Ordinance (Chapter 417), or Central Bank Security issued under the Monetary Law Act (Chapter 422), referred to in section 134 as the case may be. | | |
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| (3)The assessable income of any person shall not include-
| | (a)
| | | (i) any reward received by such person as an informer under any scheme for the payment of such rewards; or |
| (ii) a share of fine received by such person under any scheme for the distribution of such share of fine, |
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| | (b) the receipt of any lottery prize or winnings from gambling or betting from which tax has been deducted under section 157; and | | |
| | (c) interest received on the compensation payable in respect of any immovable or movable property vested in the Government or in the Land Reform Commission or in a Public Corporation from which the income tax has been deducted under section 36. | | |
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| (4) The assessable income of any person referred to in paragraph (b) of section 7 (other than any registered society referred to in sub-paragraph (XVII) of that paragraph), shall not include:-
| | (a) any interest from which tax has been deducted under section 133; or | | |
| | (b) any dividend from which tax has been deducted under subseciton (1) of section 65. | | |
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| (5) There shall be deducted from the total statutory income of a person for any year of assessment -
| | (a) sums paid by such person for any year of assessment by way of annuity, ground rent, royalty or interest not deductible under section 25. For the purposes of this paragraph interest does not include the excess referred to in paragraph (x) of subsection (1) of section 26: | | |
| | (b) the amount of a loss incurred by such person in any trade, business, profession or vocation which if it had been a profit would have been assessable under this Act, including any such loss brought forward from a previous year which had not been deducted under this seciton previously, and any deemed loss under paragraph (ii) of the proviso to paragraph (a), supported by a statment of accounts certified by an approved accountant, up to a maximum limit of thirty five per centum of the excess of the total statutory income for that year over the aggregate of:-
| | | (i) statutory income from interest and dividends referred to in subsection (2) ; |
| (ii) any interest income referred to in subsection (3); and |
| (iii) any reward , share of fine, any lottery wining and any interest on compensation payable, referred to in sub section (4), |
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| (6)
| | (a) Where the profits and income of an undertaking were exempt from income tax under section 16, section 17, section 18, section 19, section 20, section 21, section 22, section 23 or section 24 of this Act, or under section 17, section 18, section 19, section 20, section 21a, section 21b, section 21c, section 21d, section 21e, section 21f, section 21g or section 21h of Inland Revenue Act, No. 38 of 2000 or under section 16c or section 17a or section 17c or section 17d or section 17g or section 17h or section 17j or section 17jj or section 22a, section 22b, or section 22c or section 22d or section 22dd or section 22ddd or section 22dddd of the Inland Revenue Act, No. 28 of 1979, for any period (such period being referred to in this paragraph as the exempt period), there shall be deducted from the total statutory income of the person who carries on that undertaking in the year of assessment in which such exemption ceases to apply, the excess, if any, of -
| | | (i) the total of any losses incurred by such person in such undertaking in any year of assessment during the exempt period, over |
| (ii) such profits and income of that undertaking as were exempt from income tax for any year of assessment during the exempt period succeeding the year of assessment in which such loss in that undertaking was incurred. |
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| | (b) Where the entirety or any portion of the balance of such losses referred to in paragraph (a) cannot be deducted from the total statutory income of such person for the year of assessment referred to in paragraph (a), the residue, if any, of such entirety or of such portion, after its deduction from the total statutory income of such person for that year of assessment, shall be deemed to be a loss incurred by such person in that undertaking in the year of assessment immediately succeeding that year of assessment, and may accordingly be deducted in the manner provided for paragraph (b) of subsection (2). | | |
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| (7)The amount of a loss from any trade, business, profession or vocation shall be ascertained in the manner provided in this Act for the ascertainment of profits from a trade, business, profession or vocation. |
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| (8) Where the total statutory income of any child for any year of assessment is aggregated with, and deemed to be a part of, the total statutory income of his parent for that year of assessment, any sum which could be deducted from the total statutory income of such child under the provisions of this section shall be deducted from the total statutory income of such parent. |
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Sri Lanka Consolidated Acts