15. The following new Chapter is hereby inserted, immediately after Chapter XIII, and shall have effect as Chapter XIIIA, of the principal Act:-
| 107A. The provisions of this Chapter shall apply for any year of assessment commencing on or after April 1, 1971, in respect of profits from employment. |
|
| 107B.
| | (1) Every employer shall deduct income tax in accordance with the provisions of this Chapter from the remuneration of his employees at the time of payment of remuneration for each pay period commencing on or after October 1, 1971. | | |
| | (2) Income tax deducted from the remuneration of an employee under subsection (1) shall be deemed to have been paid by such employee to the Commissioner on the date on which such deduction was made. | | |
|
|
| 107C.
| | (1) Every employer who employs-
| | | (a) any person who is a single individual or a married person whose spouse does not carry on an employment, and who receives remuneration in excess of five hundred rupees per mensem or six thousand rupees per annum, or |
| (b) any person whose spouse is employed and the remuneration of both spouses exceeds five hundred rupees per mensem or six thousand rupees per annum, or |
| (c) any non-resident person receiving remuneration for services rendered in Ceylon in excess of eighty-five rupees per mensem or one thousand rupees per annum, |
|
| | (2) Where an employer commences, on a date subsequent to August 31, 1971, to employ any specified employee or to pay remuneration to any specified employee, such employer shall within seven days of such commencement give notice to the Commissioner that he has in his employ such employee: | | |
| | (3) Any notice given by an employer under sub-section (1) or sub-section (2) shall be in such form and contain such particulars as may be prescribed by the Commissioner. | | |
| | (4) Notwithstanding that an employer has failed to give notice under subsection (1) or sub-section (2), such employer shall deduct income tax from the remuneration of each of his specified employees in accordance with the provisions of this Chapter. | | |
|
|
| 107D.
| | (1) Every specified employee other than a non-resident employee shall furnish to his employer a declaration in such form and containing such particulars as may be prescribed by the Commissioner-
| | | (a) on or before the third day of October, 1971, in respect of the year of assessment commencing on April 1, 1971, and |
| (b) on or before the third dav of April, 1974, in respect of the year of assessment commencing on April 1, 1974, and on or before the third day of April of every third year from the year 1974, in respect of the year of assessment commencing on April 1, of such year, and |
| (d) as and when required by the Commissioner. |
|
| | (2) Every employer shall issue to each of his employees resident in Ceylon and receiving remuneration in excess of two hundred and seventy-five rupees per mensem or three thousand three hundred rupees per annum the declaration form prescribed under sub-section (1), whether or not such employee has made a request for such form-
| | | (i) on or before September 15, 1971, |
| (ii) once in every three years on the fifteenth day of March commencing from the fifteenth day of March, 1974, and |
| (iii) whenever directed to do so by the Commissioner. |
|
| | (3) Every employer shall issue the declaration form prescribed under subsection (1) to an employee when such employee-
| | | (a) commences to carry on an employment and receives remuneration specified in sub-section (2); or |
| (b) commences to receive remuneration specified in sub-section (2). |
|
| | (4) Every employee who is issued a declaration form under sub-section (2) shall furnish the declaration on or before the days specified in paragraph (a), or paragraph (b), as the case may be, of sub-section (1): | | |
| | (5) Every employee who is issued a declaration form under sub-section (3) shall furnish the declaration within one week of the date of issue of such form. | | |
| | (6) The declaration form referred to in sub-section (1) shall be issued by an employer to any of his employees whenever such employee makes a request therefor. | | |
| | (7) Every declaration furnished by an employee under this section shall be retained by the employer unless specifically required by an Assessor to be transmitted to him. | | |
|
|
| 107E.
| | (1) For any year of assessment commencing on or after April 1, 1971, the amount of income tax to be deducted by an employer in terms of section 107b (1) shall be in accordance with the income tax tables prescribed by the Commissioner and applicable to that year of assessment | | |
| | (2) Subject as hereinafter provided in this section, the tax group in an income tax table applicable for any pay period in a year of assessment to any employee who is resident in Ceylon shall be one of the following groups determined in accordance with the declaration furnished by such employee to the employer under section 107D: - | | |
| | (3) The tax group. determined in accordance with the declaration furnished by an employee under section 107D shall apply to such employee until a now tax group becomes applicable under sub-section (5) in accordance with a subsequent declaration furnished by such employee. | | |
| | (4) Where an employee has not furnished before the third day from the commencement of any pay period the declaration required to be furnished on or before the dates specified in paragraph (a) or paragraph (b), as the case may be, of section 107C (1) or, in the case of a declaration form Issued on the direction of the Commissioner under paragraph (d) of section 107D (1), on or before the date specified in that direction, Tax Group 1 shall be applied by the employer to such employer for such pay period. | | |
| | (5) A new tax group in accordance with the declaration furnished by an employee shall be applicable-
| | | (a) where a marriage ceases to subsist, from the pay period following the date on which the marriage ceased to subsist; and |
| (b) in all other cases from the first day of the year of assessment following that in which the event which made the new tax group applicable took place. |
|
|
|
| 107F.
| | (1) income tax shall be deducted in respect of a pay period in accordance with the income tax table applicable to regular profile from employment from the remuneration for such pay period of every employee in respect of regular profits from employment, and all such profits in respect of a pay period shall be aggregated and be deemed to be one payment for the purposes of application. of the income tax table. | | |
| | (2) Income tax shall be deducted in respect of such profits from employment as are referred to in. section 3 (4) (a) (ii) in accordance with the income tax table applicable to such profits. | | |
| | (3) Income tax shall be deducted in respect of such profits from employment as are received by an employee by way of bonus, commission or any other benefits of a similar nature in accordance with the income tax table applicable to such profits. | | |
| | (4) Income tax shall be deducted in respect of any pay period in a year of assessment from the remuneration of an employee who had a spouse in the year preceding that year of assessment and whose spouse carries on an employment in that year of assessment, in accordance with the income tax table applicable to a married employee whose spouse carries on an employment: | | |
| | (5) Income tax shall be deducted in respect of any pay period from the remuneration of an employee other than an employee referred to in sub-section (4), in accordance with the income tax table applicable to an employee who has no spouse or whose spouse is not employed, as the case may be. | | |
| | (6) Where the income tax tables are altered, the income tax tables as altered shall be applied from the pay period following the date on which the altered income tax tables take effect: Provided that, in the case of individuals referred to in section 81 (3), no additional assessment or repayment of tax shall be made only on account of such alteration of income tax tables. | | |
| | (7) Where any profits from employment are not paid but are credited or applied to the account or benefit of an employee or to the account or benefit of any other person on behalf of an employee, such profits shall be deemed to be paid when they are so credited or applied. | | |
| | (8) Where the remuneration of an employee is not paid monthly, the aggregate of the payments made in each calendar month shall be deemed to be a monthly payment and such employee shall be deemed to be an employee to whom remuneration is paid monthly and the deduction of income tax appropriate to such payments may be made from any one or more of the payments made during the month: | | |
| | (9) For the purposes of this Chapter, the amount of any commission paid to any employee shall be deemed to be profits from employment arising on the date of such payment. | | |
| | (10) Where the Commissioner is satisfied on application made by an employer that it is impracticable for such employer to make payments for work done overtime for any pay period at the same time as the other regular remuneration for such pay period is paid, payments made for such work to an employee may, for the purpose of deter-mining the amount "of income tax deduction, be aggregated with the employee's regular remuneration for a succeeding pay period. | | |
| | (11) If any remuneration is paid by the employer after the date of death of an employee in respect of his employment with such employer, the employer shall on making such payment, deduct income tax as if the deceased employee were still in his employment. | | |
|
|
| 107G.
| | (1) Any employee from whose remuneration income tax is deducted by his employer in accordance with the provisions of this Chapter may, if the amount of income tax payable by him for any year of assessment is less than the income tax deductible under this Chapter, or if income tax has been deducted from his remuneration in excess of the amount that should have been deducted, make an application in such form and containing such particulars as may be prescribed by the Commissioner, to the Commissioner that a direction be issued to his employer to make the necessary adjustments in the deduction of income tax for that year of assessment. | | |
| | (2) The Commissioner, or any officer authorized by the Commissioner, may, on an application made by an employee under sub-section (1), issue to the employer of such employee the necessary direction in writing (a copy of which shall be issued to the employee) and such employer shall deduct income tax from the remuneration of such employee in accordance with such direction: | | |
| | (3) Any employee who is dissatisfied with a direction issued under sub-section (2) may, within a period of thirty days after the date of issue of such direction, appeal to the Commissioner in writing setting out precisely the grounds of such appeal. The decision of the Commissioner on such appeal shall be final and conclusive. | | |
|
|
| 107H.
| | (1) Every employer who makes any payment of remuneration to any; specified employee shall keep a proper record of payment of such remuneration in such pay sheet and in such manner as may be prescribed by the Commissioner. | | |
| | (2) Every employer shall take all reasonable precautions for the safe custody of all employees' declarations, pay sheets, receipts for payment of remuneration to employees and all other accounting records pertaining to the remuneration of the employees and to the income tax deducted and paid to the Commissioner, and shall retain all such records and documents for a period of not less than seven years after the end of the year of assessment to which such records and documents relate. | | |
| | (3) Every employer shall permit any officer authorized in writing by the Commissioner to inspect any record or document maintained by him and referred to in sub-sections (1) and (2). | | |
|
|
| 107J. Every employer who is required to make income tax deductions from the remuneration paid to his employees under the provisions of this Chapter shall-
| | (1) not later than the fifteenth day of the month following the month in which he made any such deductions, pay to the Commissioner the amount of such deductions and at the same time furnish to the Commissioner a monthly declaration in such form and in such manner as may be prescribed by the Commissioner; | | |
| | (2) not later than the thirtieth day of April in each year deliver to each employee from whose remuneration income tax has been deducted under the provisions of this Chapter, a certificate in respect of the deductions so made in the preceding year of assessment in such form and containing such particulars as may be prescribed by the Commissioner; | | |
| | (3) within thirty days after the cessation of employment of any employee deliver to such employee a certificate, in such form as may be prescribed by the Commissioner, specifying the amount of income tax deducted in respect of the period commencing from the first day of the year of assessment during which the cessation of employment took place and ending on the date of such cessation; | | |
| | (4) not later than the thirtieth day of April in each year furnish to the Commissioner in respect of the preceding year of assessment an annual declaration in such form and containing such particulars as may be prescribed by the Commissioner, together with an income tax deduction card in such form as may be prescribed by the Commissioner in respect of each employee from whose remuneration income tax was deducted under the provisions of this Chapter during the year of assessment to which the annual declaration relates; and | | |
| | (5) not later than the last day of the month following the month in any year of assessment in which the employer ceased to carry on or exercise any trade, business, profession or vocation, comply with the provisions of paragraph (4) in respect of the trade, business, profession or vocation which he ceases to carry on or exercise, as if the period from the first day of that year of assessment to the date of such cessation were the preceding year of assessment referred to in that paragraph. | | |
|
|
| 107 K.
| | (1) Where an employer fails to deduct the amount of income tax required to be deducted under the provisions of this Chapter, or part thereof, from the remuneration paid to any employee, such employer shall on becoming cognizant of such failure, furnish to the Commissioner a declaration in the form prescribed under section 107J (1), and remit such amount of income tax as was not deducted to the Commissioner together with such amounts as may be due under section 107R. | | |
| | (2) Where during any year of assessment an employer has remitted to the Commissioner in respect of any pay period any sum in excess of the amount deducted, the employer may deduct such excess payment from the remittance in respect of any subsequent pay period In that year of assessment, and notify the Commissioner accordingly. | | |
|
|
| 107L.
| | (1) Where for any reason a deduction of income tax is not made or is not made in full at the time of making payment of remuneration to an employee, such employee shall, If such remuneration is chargeable with income tax, give notice in writing to the Commissioner within fifteen days of receipt of such remuneration that he has received such remuneration without such deduction having been made. | | |
| | (2) A notice under sub-section (1) shall contain the full name and address of the person giving such notice, the full name and address of his employer, and full particulars relating to his remuneration. | | |
|
|
| 107M. Notwithstanding anything in any other law, the amount of every tax deduction made under the provisions of this Chapter and held by the employer for remittance to the Commissioner shall-not be such property of such employer as is liable to execution or administration in the event of bankruptcy, liquidation, dissolution or death of such employer or to assignment for the benefit of creditors, and such amount shall remain apart from, and form no part of, the estate in bankruptcy, liquidation, assignment or death of such employer. |
|
| 107N.
| | (1) Where any employer fails to deduct income tax in accordance with the provisions of this Chapter from the remuneration of any employee, or where any employer has deducted income tax for any pay period from the remuneration of an employee and has not paid the full amount of such deduction to the Commissioner on or before the fifteenth day of the following month, such employer shall be personally liable for the entire amount of the tax he was required to deduct under the provisions of this Chapter but has not so deducted or, as the case may be, for the entire amount or part of the amount of the tax: deducted which was not remitted to the Commissioner, and such amount shall be deemed to be in default from the day following the day on or before which such amount should have been remitted to the Commissioner, and such employer shall be deemed to be a defaulter, and such amount may be recovered from such employer by any means provided in this Act. | | |
| | (2) Notwithstanding the provisions of sub-section (1), the Commissioner may recover from the employee the amount of the income tax or any part thereof which the employer had failed to deduct from the remuneration of the employee, | | |
| | (3) Nothing in this section shall be construed as preventing the Commissioner from taking such steps as he thinks fit to recover the amount of income tax referred to in sub-section (2) from the employer and from the employee or from recovering that amount wholly from the employer or wholly from the employee or partly from the employer and partly from the employee. | | |
|
|
| 107P.
| | (1) Where an employer who is required under the provisions of this Chapter to deduct income tax from the remuneration paid to his employees-
| | | (a) fails to deduct the whole or any part of the income tax for any pay period; |
| (b) fails to remit to the Commissioner the whole or any part of the income tax deducted for any pay period; or |
| (c) fails to furnish any monthly or annual declaration under section 107J, |
|
| | (2) Where it appears to an Assessor that for any pay period in any year of assessment an employer has been assessed under sub-section (1) at less than the proper amount of income tax, the Assessor may, at any time during that year of assessment or within six years from the end of that year of assessment. assess such employer at the additional amount of income tax at which such employer in the opinion of the Assessor should have been assessed. | | |
|
|
| 107Q.
| | (1) Any employer aggrieved by the amount of any assessment made under the provisions of this Chapter may appeal in writing against such assessment to the Commissioner within a period of thirty days after the date of the notice of such assessment: | | |
| | (2) Where the assessment appealed against under sub-section (1) has been made in the absence of a monthly declaration, or an annual declaration, as the case may be, required to be furnished under section 107J, the petition of appeal shall be sent together with such declaration. | | |
| | (3) The amount of income tax charged by an assessment shall be paid by the employer notwithstanding that an appeal against such assessment has been preferred under sub-section (1). | | |
| | (4) The provisions of sections 97 (6) to 102 shall mutatis mutandis apply to any appeal preferred under subsection (1). | | |
| | (5) Where no valid appeal has been preferred within the period specified in sub-section (1) against an assessment made in accordance with the provisions of this Chapter, or where an agreement is reached under section 97 (6) as regards an assessment, or where an assessment has been determined on appeal, the assessment made or agreed or determined on appeal, as the case may be, shall be final and conclusive for all purposes of this Act: | | |
|
|
| 107R. Where any income tax payable by an employer under the provisions of this Chapter is in default, such employe shall pay in addition to such tax,-
| | (a) a penalty of a sum equivalent to five per centum of such tax; and | | |
| | (b) where such tax is not paid before the expiry of thirty days after such tax has begun to be in default, a further penalty of a sum equivalent to one per centum of such tax in respect of each further period of thirty days or part thereof during which such tax is in default: | | |
|
|
| 107S. Where the assessable income of an employee for any year of assessment includes any remuneration in respect of which income tax has been deducted in accordance with the provisions of this Chapter such employee shall be entitled on production of a certificate of deduction of tax relating to such remuneration issued in accordance with the provisions of sub-section (2) or subsection (3) of section 107J, to a set-off against the tax payable by him for that year of assessment of the amount of tax shown in such certificate to have been deducted. |
|
| 107T. In this Chapter, unless the context otherwise requires,- |
|
|
Sri Lanka Consolidated Acts