4.
| (1) Where a capital gain or a capital loss arises from the change of ownership of any property occurring on a donation of that property by its owner to any other person, such capital gain or such capital loss shall be deemed to be a capital gain or a capital loss, as the case may be, of the donor. |
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| (2) Where a capital gain or a capital loss arises from the change of ownership of any property occurring either on the death of the owner of that property or in the year of assessment in which the owner of that property ceases to be resident in Ceylon, such capital gain or such capital loss shall be deemed to be his capital gain or capital loss, as the case may be, arising in the year preceding the year of assessment in which the death or the cessation of residence in Ceylon occurs. |
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| (3) The amount of a capital gain shall be computed after making the following deductions: -
| | (a) any expenditure (other than the purchase price if any) incurred on or after April 1,1957, solely in connection with the acquisition of the property by the person Who is the owner of that property immediately before the occurrence of the transaction which resulted in such gain; | | |
| | (b) the expenditure incurred on or after April 1, 1957, by the aforesaid owner in making any improvements, additions or alterations to that property if no deduction in respect of such expenditure is allowed under section 10 or section 53 or section 53a or section 53b; and | | |
| | (c) the expenditure incurred by the aforesaid owner solely in connection with the transaction which resulted in such gain. | | |
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| (4) The amount of a capital loss shall be computed by including in such amount any expenditure of the description referred to in paragraphs (a), (b) or (c) of subsection (3). |
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| (5) The amount of the net capital loss of any person for any year of assessment shall be a capital loss of that person for the next succeeding year of assessment. |
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| (6) Where the aggregate amount of the capital gain of any person for any year of assessment which arises in respect of movable property other than stocks, shares debentures or debenture stocks does not exceed two thousand rupees, such amount shall be deemed not to be that person's capital gain for that year of assessment. |
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| (7) Where any person-
| | (a) has no taxable income for the three years of assessment preceding any year of assessment, or | | |
| | (b) has a total assessable income for those three years of assessment which is less than the total of the allowances which under section 21 are required to be deducted from that assessable income in arriving at his taxable income for those three years of assessment, | | |
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| (8) Where the taxable income of a person includes any net capital gain, and the rate of the income tax payable on a part of such income (hereafter in this subsection referred to as the "relevant part of the income ") exceeds 45 per centum , then, in regard to the relevant part of the income, the tax shall be computed as follows: -
| | (a) if the relevant part of the income exceeds the amount of the net capital gain-
| | | (i) the tax payable on such portion of the relevant part of the income as is equal to the amount of the net capital gain shall be at the rate of 45 per centum, and |
| (ii) the tax payable on the balance of the relevant part of the income shall be computed according to such of the rates of the tax above 45 per centum as are applicable thereto under this Act; and |
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| | (b) if the relevant part of the income does not exceed the amount of the net capital gain, the tax payable on the entirety of the relevant part of the income shall be 45 per centum notwithstanding anything to the contrary in this Act. | | |
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| (8A) Subsection (8) shall for every year of assessment commencing on or after April 1, 1965, have effect as though there were substituted, for the expression "45 per centum", wherever it occurs in that sub-section, the expression "25 per centum", and that subsection as so amended shall, notwithstanding anything to the contrary, apply in relation to any capital gain arising from the change of ownership of any property occurring in the year of assessment commencing on April 1, 1964, either on the death of the owner of such property or on his ceasing to be resident in Ceylon. |
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| (9) Where a person dies and he has any net capital loss for the last year of assessment for which he was liable to be assessed for income tax, the amount of such net capital loss shall, as far as is practicable, be deducted from his statutory income from all sources for such last year of assessment, and, if it cannot be so deducted, from his statutory income from all sources for any (in order of recession) of the three years of assessment preceding such last year of assessment; and where such deduction is made from his statutory income for any such preceding year of assessment, the tax for that year of assessment in respect of him shall, notwithstanding the provisions of section 103, be revised taking into consideration such deduction, and the amount of the difference in the tax originally imposed on him in respect of that year of assessment and the amount of the revised tax for that year of assessment shall, if there is an executor of the deceased, be refunded to such executor, and, if there is no such executor, be refunded to such person or persons as is or are in the opinion of the Commissioner entitled to such refund. |
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| (10) Where a person-
| | (a) who has no taxable income for the three years of assessment preceding any year of assessment, or | | |
| | (b) the total of whose assessable income for those three years of assessment is less than the total of the allowances which under section 21 are required to be deducted from that assessable income in arriving at his taxable income for those three years of assessment, | | |
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| (11) The provisions of subsection (8) shall apply in regard to the computation of the tax on any taxable income which includes the value of a prize won at a sweep or lottery as if the reference therein to " any net capital gain " were a reference to " the value of a prize won at a sweep or lottery " and the reference therein to " amount of the net capital gain " were a reference to " value of such prize ". |
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| (12) In this section-
| | (a) the expressions " capital gain ", " capital loss " and "net capital gain" shall have the same meanings as are assigned to them in subsection (4) of section 3; and | | |
| | (b) the expression " net capital loss ", in respect of any year of assessment, means the excess of the capital loss for that year over the capital gain for that year. | | |
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Sri Lanka Consolidated Acts