Step-by-Step Guide: How to Use Income Tax Calculator-(Resident -Individual)

This guide will help you accurately calculate your income tax, determine penalties if applicable, and ensure compliance with Sri Lanka’s tax laws. Follow the steps below to use the Sri Lanka Income Tax Calculator efficiently.

Step 1: Enter Your Taxpayer Information

At the top of the calculator, enter your personal details, which are required for tax reporting:
 Full Name – Enter your legal name as per your TIN registration.
 Email Address – Enter your active email address to receive tax notifications.
 Address – Provide your current residential or business address.
 TIN (Taxpayer Identification Number) – Enter your official TIN Number issued by the IRD (Inland Revenue Department of Sri Lanka).

 Why? This information is used for tax reporting and future IRD correspondence.

Step 2: Enter Your Income Details-(From 01/04/2025 to 31/03/2026)

You need to input your income sources under the appropriate categories.

 Employment Income – Salary, wages, and any bonuses.
 Business Income – Profits earned from businesses, freelancing, or self-employment.
 Investment Income – Dividends, interest from bank deposits, and rental income.
 Other Income – Any additional earnings not covered above.

 Why? This ensures that all taxable income is included for accurate tax calculation.

Step 3: Enter Your Deductions & Reliefs

To reduce your taxable income, you can apply for deductions and reliefs:

 Personal Relief (Rs. 1.8 Million) – Automatically applied.
 Solar Panel Expenses (Max Rs. 600,000) – Enter eligible expenses for tax relief.
 Donations to Approved Charities (Max Rs. 75,000) – Enter your donation amount.
 Rent Relief (25%) – If applicable, check the box for rent relief deductions.

 Why? These deductions lower your taxable income, reducing the tax you owe.

Step 4: Enter Your Quarterly Tax Payments

If you made advance tax payments, enter the amounts in the respective fields:

 Q1 Payment – Payment made for the first quarter.(April -June 2025) Q2 Payment – Payment made for the second quarter.(July-September 2025)
 Q3 Payment – Payment made for the third quarter.(October 2025-December 2025) Q4 Payment – Payment made for the fourth quarter.(January -March 2026)

 Why? These payments are deducted from your total tax liability, reducing the final amount payable.

Step 5: Calculate Terminal Benefits (if applicable)

If you received terminal benefits (e.g., gratuity, EPF, ETF payouts), enter the total amount received. The calculator will apply the correct tax rates.

 Why? Some terminal benefits are taxable, so it is important to include them.

Step 6: Calculate Your Tax Payable

 Click the “Calculate Tax” Button to compute your net tax payable after deductions and quarterly payments.
 The system will display your tax liability, showing:

• Gross Tax Payable
• Deductions & Reliefs Applied
• Advance Tax Payments Deducted
• Final Tax Payable

 Why? This shows you the exact amount you need to pay to the IRD.

Step 7: Check for Late Filing Penalties (if applicable)

If you haven’t filed your tax return by the November 30, 2026 deadline, the calculator will automatically compute the late penalty as per the IRD rules:

 Late Filing Penalty Calculation:

• Minimum Penalty: Rs. 50,000
• 5% of Tax Payable + 1% for Each Month of Delay
• Imprisonment or Additional Fines for Non-Filing

 Example:

• If your tax payable is Rs. 200,000 and you are 6 months late, the penalty will be:
  • 5% of Rs. 200,000 = Rs. 10,000
  • 1% per month for 6 months = Rs. 12,000
  • Total Penalty = Rs. 22,000
  • Minimum Charge = Rs. 50,000 (since it’s higher)

 If you fail to file within 4 years, the IRD can review your taxes up to 2030.

Step 8: Check the Time Bar for Tax Assessment

• If you file your return on time, IRD can review or amend it within 30 months (until May 2029).
• If you file late, IRD can extend assessments up to 4 years (until 2031).
• Fraudulent tax evasion has no time limit – IRD can audit your return at any time.

 Why? Filing on time limits your exposure to tax audits and penalties.

Step 9: Receive a Warning Notice (If You Are Non-Compliant)

If the system detects non-compliance (e.g., late filing, unpaid taxes), a warning message will be displayed:

 “Immediate Action Required: File Your Tax Return Before November 30, 2026, to Avoid Penalties!”

 Why? This helps you stay compliant and avoid fines from the Sri Lanka IRD.

Step 10: Save or Print Your Tax Calculation

Once you review your tax results:
 Download the tax summary for reference.
 Print a copy for your records or accountant.
 Proceed to file your tax return via the IRD online portal.

Conclusion: Take Action Now!

 File your tax return before November 30, 2026 to avoid penalties.
 Pay any outstanding tax amount to avoid interest charges.
 Keep all tax-related documents for at least 4 years in case of an IRD audit.

 Visit Sri Lanka Inland Revenue Department to submit your tax return.

 Need Help?

If you have questions about tax calculations or filing procedures, consult  us  or Email: info@taxcalculator.lk or Hot Line +094719204903.

 By using this calculator, you ensure accurate tax reporting and avoid unnecessary fines!