15. The following new Chapter is inserted immediately after chapter XV and shall have effect as Chapter XVA of the principal enactment:-
| 113A.
| | (1) Every bank and financial institution shall, subject to the other provisions of this Chapter, deduct from the interest payable by it in any year of assessment commencing on or after April 1, 1986, on any sum of money deposited with it by a person in his own name or in the name of some other person, being in either case a person chargeable with income tax under this Act, income tax at the rate of twenty per centum of the interest so payable. | | |
| | (2) Every bank or financial institution which deducts income tax in accordance with the provisions of subsection (1) from any interest paid by it in any year of assessment, to a person chargeable with income tax under this Act, shall issue to such person a statement setting out the following particulars :-
| | | (a) the gross amount of the interest due in such year of assessment, |
| (b) the rate and amount of tax deducted, and the period for which it is deducted, and |
| (c) the net amount of interest actually paid. |
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| 113B. Where the assessable income of a person for any year of assessment included a payment referred to in section 113A, then"
| | (a) if the income tax payable by him for that year of assessment exceeds the total of the deductions made under section 113A, he shall be entitled, on production of a statement relating to such payment made in accordance with that section, to deduct from the income tax payable by him for that year of assessment, the amount of tax set out in such statement; | | |
| | (b) if the income tax payable by him for that year of assessment is less than the total of the deductions made under section 113A, he shall be entitled, on production of a statement relating to such payment made in accordance with that section and subject to the provisions of Chapter XXIII, to a refund of the amount of the difference between the income tax payable by him for that year of assessment and the amount set out in such statement. | | |
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| 113c.
| | (1) Any person from whose interest, income tax is deductible by a bank or financial institution, in accordance with the provisions of section 113A, may, if the amount of income tax payable by him for any year of assessment is less than the income tax deductible for that year of assessment under section 113A, make an application to the Com- missioner-General in such form, and containing such particulars, as may be specified by the Commissioner-General that a direction be issued to that bank or financial institution to make the necessary adjustments in the deduction of income tax for that year of assessment. | | |
| | (2) The Commissioner-General or any officer authorized by the Commissioner-General may, on an application, made by any person under subsection (1) issue to the bank or financial institution specified in such application, the necessary directions in writing ( a copy of which shall be issued to the applicant) and such bank or financial institution shall deduct income tax from the interest payable to such person in accordance with such direction: | | |
| | (3) Any person who is dissatisfied with a direction issued under this section in respect of any year of assessment may, within a period of thirty days after the date of such direction, appeal to the Commissioner-General in writing setting out precisely the grounds of such appeal. The decision of the Commissioner-General on any such appeal shall be final and conclusive : | | |
| | (4) Every bank and financial institution shall"
| | | (a) keep a proper record of the interest paid by it, in an year of assessment, to persons chargeable with income tax under this Act, and the date or dates on which such interest is paid, in such manner as may be specified by the Commissioner-General; and |
| (b) permit any officer authorized in writing by the Commissioner-General to inspect any record maintained by it and referred to in paragraph (a). |
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| 113D. Every bank or financial institution which is required to deduct income tax from the interest paid by it in any year of assessment to persons chargeable with income tax under this Act, shall deduct such income tax at the time when such interest is paid to such person in accordance with any agreement entered into between it and such person, with respect to such payment, and shall remit the amount so deducted to the Commissioner-General before the fifteenth day of the month following the month in which the deduction was made and at the same time furnish to the Commissioner-General, a declaration in such form and in such manner as may be specified by the Commissioner-General. |
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| 113E.
| | (1) Where any bank or financial institution fails to deduct income tax from the interest paid by it in any year of assessment to a person chargeable with income tax under this Act in accordance with section 113D or where the bank or financial institution fails to remit to the Commissioner-General, any amount so deducted, such bank or financial institution shall be liable for the entire amount of the tax it was required to deduct under the provisions of this section but has not so deducted or. as the case may be, for the entire amount or part of the amount of the tax deducted and not remitted, to the Commissioner-General, and the amount not deducted or deducted and not remitted, as the case may be, 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-General, and such bank or financial institution shall be deemed to be a defaulter, and such amount may be recovered from such bank or financial institution in the manner provided in this Act. | | |
| | (2) Notwithstanding the provisions of subsection (1), the Commissioner-General may recover from the person from whom such deduction should have been made the amount of the income tax or any part thereof which the bank or financial institution has failed to deduct from the interest paid to such person. | | |
| | (3) Nothing in this section shall be read and construed as preventing the Commissioner-General from taking such steps as he thinks fit to recover the amount of income tax referred to in subsection (2) wholly from the bank or financial institution or wholly from the person from whom such deduction should have been made or partly from the bank or financial institution and partly from that person. | | |
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| 113F. Where any bank or financial institution which is required to deduct income tax from the interest paid in any year of assessment to any person chargeable with income tax under this Act.
| | (a) fails to deduct the whole or any part of the income tax which it is required to deduct under this Chapter ; | | |
| | (b) fails to remit to the Commissioner-General the whole or any part of the income tax so deducted ; or | | |
| | (c) fails to furnish any declaration under section 113D, an assessor may at any time within three years from the end of that year of assessment, assess the amount of income tax or the additional amount of income tax which such bank or financial institution should have deducted and paid to the Commissioner-General for such year of assessment, and shall by notice in writing, require such batik or financial institution to pay such amount forthwith together with such amount as may be due under section 113H. | | |
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| 113G.
| | (1) Any bank or financial institution aggrieved by the amount of any assessment made under the provisions of section 113F may appeal in writing against such assessment to the Commissioner-General within a period of thirty days after the date of the notice of such assessment: | | |
| | (2) Where the assessment appealed against under subsection (1) has been made in the absence of a declaration required to be furnished under section 113D, the petition of appeal shall be preferred together with such declaration. | | |
| | (3) The amount of income tax charged by an assessment made under section 113F shall be paid by the bank or financial institution notwithstanding that an appeal against such assessment has been preferred under subsection (1). | | |
| | (4) The provisions of section 117 (5) to 122 shall, mutatis mutandis, apply to any appeal preferred under subsection (1). | | |
| | (5) Where no valid appeal has been preferred within the period specified in subsection (1) against an assessment made in accordance with the provisions of this Chapter, or where an agreement is reached under section 117 (5) as regards the assessment, or where an assessment has been determined on appeal, the assessment as made or agreed or determined on appeal, as the case may be, shall he final and conclusive for all purposes of this Act. | | |
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| 113H. Where any income tax payable by a bank or financial institution under the provisions of this section is in default, such bank or financial institution shall pay in addition to such tax"
| | (a) a penalty of a sum equivalent to ten per Centum of such tax ; and | | |
| | (b) where such tax is not paid before the expiry of six months after tax has begun to be in default, further penalty of a sum equivalent to fifteen per centum of such tax : | | |
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| 113J. In this Chapter, " financial institution " means any person or body of persons, corporate or unincorporate, whose business or part of whose business consists in the acceptance of money by way of deposit and the payment of interest thereon.'. |
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Sri Lanka Consolidated Acts