38.
| (1) Every resident company shall be entitled to deduct from the amount of any dividends payable to any shareholder in the form of money or an order to pay money out of the profits on which the taxable income of that company is computed for any year of assessment, income tax equal to thirty-three and one-third per centum of such amount. |
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| (2) Every person who issues a warrant, cheque or other order drawn or made in payment of any dividend which becomes payable by a resident company during any year of assessment shall annex thereto a statement in such form as may be specified by the Commissioner-General setting out -
| | (a) the gross amount which after deduction of income tax thereon corresponds to the net amount actually paid; | | |
| | (b) the sum deducted as income tax ; | | |
| | (c) the net amount actually paid ; | | |
| | (d) where any such dividend includes the amount of a dividend received by that company from any other resident company, that part of the amount of the dividend so received, and whether the whole or any part of the amount of the dividend so received is exempt from income tax under this Act. | | |
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| (3) Where the statement referred to in subsection (2) discloses that a shareholder of a resident company received a dividend which included the amount of any dividend received from any other resident company, then, that amount shall, for the purposes of determining the statutory income of such shareholder, be increased by fifty per centum and he shall be entitled to deduct from the tax payable by him an amount equal to the said fifty per centum : |
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| (4) Where the assessable income of a person other than a company includes a dividend from a resident company in the form of money or of an order to pay money, he shall be entitled, on production of a statement relating to such dividend made in accordance with subsection (2), to deduct from the tax payable by him, the amount of tax shown on such statement. |
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| (5) Where for any year of assessment the assessable income of a person other than a company includes a dividend from a resident company in the form of shares or debentures, he shall be entitled to deduct from the tax payable by him, an amount equal to an amount which the company would have been entitled under subsection (1) to deduct as tax on such dividend had such dividend been paid in the form of money. |
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Sri Lanka Consolidated Acts