By Laxman Amarakoon
Key Factors: First Period means a period from 01.04.2019 to 31.12.2019
Second period means a period from 01.01.2020 to 31.03.2020.
ILLUSTRATION – 01
Dr. Silva is a government medical officer. Dr. Silva received the following income during the year of assessment 2019/2020
First Period (Rs) Second Period (Rs)
Employment Income 1,440,000 510,000
Paye Tax deducted 25,200 –
Private Medical Practice Income 1,800,000 800,000
5% of WHT duly paid 90,000 –
Interest income (WHT duly paid) 1,500,000 520,000
Expenses incurred for education locally 325,000 400,000
As well he donated Rs. 25,000 to Government Approved Charity during the First Period of the Y/A 2019/2020.
ILLUSTRATION – 02
Mr. Perera is a professional lawyer. His Legal Practice Income and Interest Income for the Y/A 2019/2020 are as follows.(Assume that he is a senior citizen)
First Period (Rs) Second Period (Rs)
Legal Practice Income 1,291,000 510,000
Interest Income 400,000 1,200,000
ILLUSTRATION – 03
Mr. Fernando is acompany Director.He received following income during the year of assessment 2019/2020.
First Period (Rs) Second Period (Rs)
Director’s Remuneration 1,125,000 375,000
Profits from Sole Proprietorship 1,960,000 950,000
Rent income (WHT duly paid) 225,000 75,000
Withholding Tax paid on Rent Income
Personal medical expenses incurred 500,550
- PARTNERSHIPS
- It was proposed that every Divisible Taxable Partnership share of Profit will be liable to Tax with effect from 01.04.2020 and its calculation is as follows;
- The First Rs. 1,000,000/- out of Taxable Aggregate Share profit is not liable for Partnership Tax and Balance share of profit will be Taxed at 6% PA on the excess of Rs. 1,000,000/-.
- The paid Partnership Tax credit can be obtained by the partners in their Individual Tax Returns proportionately against their share of other Taxable income.
- If Partnership Taxable income consists of Gains on realization of investment assets , taxed @ 10% PA.