2. Section 7 of the Inland Revenue Act, No. 28 of 1979, (hereinafter referred to as the " principal enactment") is hereby amended as follows:-
| (1) in subsection (3) of that section
| | (a) by the substitution, in paragraph (b) of that subsection for the words " and paragraph (h),", of the words "paragraph (h) and paragraph (I), " ; | | |
| | (b) by the substitution in sub-paragraph (ii) of paragraph (j) of that subsection for the words " was received ; and", of the words " was received ; " ; | | |
| | (c) by the substitution in paragraph (k) of that subsection for the words " at that time,", of the words " at that time ; and " ; and | | |
| | (d) by the insertion, immediately after paragraph (k) of that subsection, of the following
| | | " (l) where the property is immovable property and that property was acquired by way of gift or inheritance, on or after April 1, 1977, by the person to whom the capital gain arises from any person who had acquired such property prior to April 1, 1977, the value of such property at the time it was acquired by the first-mentioned person shall be an amount equal to the market value of such property on April 1. 1977, increased by the cost of any improvements, additions or alterations to that property made by the second-mentioned person after April 1, 1977." ; and |
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| (2) by the substitution, in paragraph (b) of subsection (4) of that section, for the words " under section 23 of this Act,", of the words "under section 23 or paragraph (l) of subsection (2) of section 31 of this Act,". |
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Sri Lanka Consolidated Acts