35. The following new section is hereby inserted immediately after section 108 of the principal enactment, and shall have effect as section 108A of that enactment :-
| 108A.
| | (1) Where an employer pays any tax at special remuneration or provides any benefit to any director, whether executive or non-executive, or to any Chairperson of the Board of Directors of any company or provides a benefit in cash or in kind to any other person who is not considered to be an employee and where such amounts are not taken into account in the application of the tax tables referred to in section 108, such employer shall deduct tax at the rate of ten per centum on such amounts or the value of such benefits in terms of the provisions of this Chapter. No direction shall be issued or entertained under section 109 in relation to such amounts or value of benefits. | | |
| | (2) No refund shall be made under this Act in relation to the income tax deducted in terms of subsection (1), notwithstanding anything to the contrary in this Act, but such income tax may be set off against the income tax liability of such person in respect of the same year of assessment, if such amounts or the value of benefit has been included in his total statutory income for that year. | | |
| | (3) Where any employer who is required to deduct tax on any remuneration using tax tables as referred to in section 108 omits to do so. and deducts tax at the rate of ten per centum on such remuneration, such employer shall be liable to pay such tax in default calculated on the basis of the difference between tax payable under the tax tables as provided for in section 108 and tax deducted by the employer under this section, and be liable to a penalty not exceeding ten per centum of such tax in default, calculated as follows :"
| | | (a) where the tax payable on a return submitted under subsection (1) of section 98 has not been paid fully or partly on or before the due date, at the rate of five per centum for the first month of such default and a further one per centum for each month or part of a month thereafter, on such amount of tax in default; |
| (b) where an assessment has been issued in the absence of a return due from such person and the relevant tax is in default, at the rate of ten per centum on such amount of tax in default; |
| (c) where an assessment was under appeal and the tax became payable on the settlement of such appeal , at the rate of ten per centum on such amount of tax that became payable. |
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| | (4) Any employer who fails to deduct tax as provided for in subsection (1) from any benefits. in each or kind, provided during the period April 1, 2004 up to such date as may be determined by the Commissioner-General by a notice published in that behalf, shall not be in default, if such employer has provided the full details of such payment from which tax has not been deducted, to the Commissioner-General within thirty days of such date. | | |
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Sri Lanka Consolidated Acts