42.
| (1) The gifts of an individual other than gifts specified in section 41 shall be his taxable gifts, and he shall, subject to the provisions of subsection (4) of section 39, be liable to gifts tax in respect of such taxable gifts. |
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| (2) For every year of assessment (hereafter in this subsection referred to as the " relevant year of assessment ") commencing on or after April 1, 1963, the value of the taxable gifts made in the year preceding the relevant year of assessment by any person liable to the gifts tax shall be added to the value of the taxable gifts made by him on or after July 18, 1958, and before such preceding year. Then, assuming that the sum resulting from such addition is the value of the taxable gifts in respect of which gifts tax is chargeable, the amount of such tax shall be computed by the application of the appropriate rates of gifts tax. From the amount so computed there shall be deducted all sums paid by him previously, whether by way of contributions in respect of taxable gifts to the Personal Tax, levied under the Personal Tax Act, No. 14 of 1959, or as gifts tax under this Act. The amount left after such deduction shall be the amount of the gifts tax in respect of his taxable gifts for the relevant year of assessment. |
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| (3) In the computation of the gifts tax payable by any individual for any year of assessment the rate or rates of gifts tax which shall be applicable in respect of the gifts made in the year preceding that year of assessment shall be the rate or rates which would have been applicable if those gifts and the gifts made previously by that individual had been aggregated for that year of assessment. |
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Sri Lanka Consolidated Acts