Inland Revenue (Amendment) Law (No. 16 of 1976)

Sri Lanka Consolidated Acts

[Index] [Table] [Database Search] [Name Search] [Previous] [Next] [Help]

Inland Revenue (Amendment) Law (No. 16 of 1976) - Sect 22

Insertion of Chapter VIIA in the principal enactment

22. The following new Chapter is hereby inserted immediately after Chapter VII, and shall have effect as Chapter VIIA, of the principal enactment:-

38A. This Chapter shall not apply to any individual referred to in section 28.

38B.

(1) Subject to the other provisions of this Chapter, there shall be charged for every year of assessment commencing on or after April 1, 1976, a tax (hereafter in this Act referred to as the " expenditure tax ") at the appropriate rates specified in the Seventh Schedule to this Act, in respect of the taxable expenditure of every individual who is the head of a family and who is resident in Sri Lanka in the year preceding that year of assessment, and of every individual not included in a family who is resident in Sri Lanka in such preceding year, other than an individual who is deemed under subsection (6) of section 54 of this Act to be resident in Sri Lanka.

(2) Where an individual is chargeable to the expenditure tax as a resident for a part only of the year preceding any year of assessment-

(a) he shall be entitled for that year of assessment to the same proportion only of the allowances under section 38G as the number of days during which he is resident bears to the number of days in that preceding year, and

(b) the provisions of the Seventh Schedule to this Act shall, in their application to that individual, have effect as if each of the sums mentioned in those provisions were reduced in the proportion which the number of days during which he is resident bears to the number of days in that preceding year.

38c. The expenditure of an individual shall be deemed to include the following: -

	(a) any expenditure incurred by any person other than that individual in respect of any obligation or personal requirement of that individual or any member of the family of that individual which, but for the expenditure having been incurred by that person, would have been incurred by that individual or such member and would be part of the assessable expenditure of that individual;

	(b) any donation or benefit made or provided by any person other than that individual to, and enjoyed by, that individual or any member of his family, the expenditure in making or providing the donation or benefit being expenditure which, if incurred by that individual or such member, would be part of the assessable expenditure of that individual;

	(c) the rental value of any place of residence provided free of rent to that individual by his employer or where such place of residence is provided at a rent less than the rental value of that place of residence, the excess of such rental value over such rent ; and

	(d) the expenditure incurred in the acquisition of a motor vehicle for private use other than in the purchase of one motor vehicle and in the replacement of that motor vehicle.

38D.

(1) The expenditure of an individual shall be deemed not to include the following : -

(a) any such expenditure incurred by him in the production of profits or income from any trade, business, profession, or vocation carried on or exercised by him as is allowed by this Act to be deducted for the purpose of ascertaining his profits or income, and any capital expenditure incurred by him in the production of such profits or income;

(b) expenditure incurred in travelling outside Sri Lanka in connection with any trade, business, profession or vocation carried on or exercised by him if such expenditure was incurred with the approval of the Controller of Exchange and does not exceed the amount authorized by him for that purpose ;

(c) any expenditure incurred by him wholly and exclusively for advertising in connection with any trade, business, profession, vocation or employment carried on or exercised by him;

(d) any expenditure incurred by him by way of the acquisition of any immovable property or the construction, repair or improvement of any immovable property, other than the repair of a house owned and occupied by him;

(e) any expenditure incurred by him by way of investment in deposits, loans, shares or securities or by way of purchase of a business or by way of contribution as capital in a business;

(f) any expenditure incurred by him by way of paying premia in respect of any policy of insurance, or of paying premia for the purchase of an annuity ;

(g) any expenditure incurred by him by way of the acquisition of any bullion, precious stones or jewellery ;

(h) any expenditure incurred by him by way of repayment of any debt or by way of payment of interest thereon;

(i) any gift made by him;

(j) any ground rent paid by him;

(k) any annuity or other sum which he is legally bound to pay;

(l) any expenditure incurred by him by way of payment of any tax, duty or levy administered by the Commissioner-General or any rates or tax levied on immovable property other than any rates paid in respect of a house owned and occupied by him;

(m) any expenditure incurred by him by way of the payment of any sum under an order of any court;

(n) lawyers' fees paid and other expenses incurred in connection with any proceedings in any court or before any tribunal or before any arbitrator whose award is enforced by a judgment of any court;

(o) any expenditure not exceeding five thousand rupees, incurred in connection with the funeral of any member of his family;

(p) any expenditure, not exceeding ten thousand rupees incurred in connection with his marriage or the marriage of any child of his whether such child is or is not under twenty-one years;

(q) any expenditure, in excess of three thousand rupees, incurred by him in obtaining for himself , or in providing to any member of his family, medical treatment, such expenditure being in respect of hospital or nursing home charges, doctors' fees, cost of drugs, and nurses' and attendants' charges;

(r) any expenditure incurred by him in making good any loss of his or of any member of his family arising from theft or from fire, flood or other elemental cause;

(s) where he is not a citizen of Sri Lanka, any expenditure incurred by him in educating his children abroad;

(t) where he is not a citizen of Sri Lanka, the cost of his passage and the passage of any member of his family in proceeding to and back from his home abroad;

(u) where he is a candidate at an election of a Member of the National State Assembly, any expenditure incurred by him which is authorized by any written law to be incurred by him as such candidate;

(v) any contribution made to any pension or provident fund;

(w) any expenditure incurred by a child who is in receipt of occupational income to the extent of his occupational income; and

(x) any expenditure incurred wholly and necessarily in connection with the discharge of any duties assigned to him by the State.

	(2) Where any expenditure falls within two or more paragraphs of sub-section (1), that expenditure as specified in only one of those paragraphs shall be deemed under that subsection not to be included in the expenditure of that individual. .

38E. The assessable expenditure of an individual for any year of assessment shall be the expenditure incurred by him in the year preceding such year of assessment.

38F. Where an individual has, during the period commencing on April 1, 1975, and ending on November 5, 1975, incurred any non-recurrent expenditure in excess of ten thousand rupees, the Commissioner-General may, in his discretion, for the purpose of ascertaining his assessable expenditure, permit such non-recurrent expenditure to be spread 6) over a period not exceeding three years of assessment, if a written application is made on or before March 31, 1977.

38G. The following allowances shall be deducted from the assessable expenditure of an individual for any year of assessment in arriving at his taxable expenditure for that year of assessment:-

	(a) where he is the head of a family, an allowance of thirty-six thousand rupees in respect of him, an allowance of four thousand rupees in respect of his wife, and an allowance of two thousand rupees in respect of each of not more than three children or dependent relatives or children and dependent relatives;

	(b) where he is not included in a family, an allowance of thirty-six thousand rupees in respect of him;

	(c) where he is a Member of the National State Assembly, such allowance as is applicable to him under paragraph (a) or paragraph (6) and such other allowances referred to in section 73 as are not taken into consideration in ascertaining the profits and income of such Member.

38H. The assessable expenditure of the members of a family, other than the head of that family, for any year of assessment shall be aggregated. The aggregate amount of such assessable expenditure shall be deemed to form part of the assessable expenditure of the head of that family for that year of assessment. The assessable expenditure of the head of that family for that year of assessment after deducting there from the allowance to which he is entitled under section 38G shall be his taxable expenditure for that year of assessment, and the head of the family shall be liable to the expenditure tax, in respect of such taxable expenditure.

38J. The assessable expenditure for any year of assessment of an individual who is not included in a family after deducting therefrom the allowance to which he is entitled under section 38G shall be his taxable expenditure for that year of assessment, and he shall be liable to the expenditure tax, in -respect of such taxable expenditure.

38K. Where the expenditure tax in respect of an individual who has taxable expenditure and who is the head of a family cannot be collected from him, then, if his wife or child is included in such family, such portion of the expenditure tax as appears to the Commissioner-General to be attributable to the assessable expenditure of such wife or child may be collected from such wife or child notwithstanding that no assessment has been made upon such wife or child and the provisions of this Act as to collection and recovery of expenditure tax shall apply accordingly.

38L. Any reference in sections 44, 45, 46, 48, 49, 51, 82, 92, 93, 94, 95, 96, 96A, 96B, 96C, 103, 104, 106, 108, 113, 115, 117, 118, 120 and 125 to income, assessable income and income tax, shall, unless the context otherwise requires, be construed as including a reference to expenditure, assessable expenditure and expenditure tax respectively.

38M. The reference in section 97 (2) (6) to wealth tax shall be construed as including a reference to expenditure tax.

[Index] [Table] [Database Search] [Name Search] [Previous] [Next] [Help]