Revised Tax Rates: What You Need to Know

COLOMBO (News 1st); The bill to amend the thresholds for personal income tax has now been gazetted.

Starting from April 1st, personal income tax will be levied under the new thresholds.

According to the Inland Revenue Amendment Bill, the new personal income tax thresholds are as follows:

- Monthly income up to Rs 150,000 will be exempt from personal income tax.

- For monthly income exceeding Rs 150,000, the first Rs 83,334 will be taxed at 6%, amounting to Rs 5,000.

- The next Rs 41,667 will be taxed at 18%, amounting to Rs 7,500.

- The subsequent Rs 41,667 will be taxed at 24%, amounting to approximately Rs 10,000.

- The next Rs 41,667 will be taxed at 30%, amounting to approximately Rs 12,500.

- Any income exceeding this will be taxed at 63%.

"Let's consider an individual with a monthly income of Rs 500,000 under the new amendments. The income tax payable would be Rs 86,000, which is a reduction of over Rs 22,000 for that income bracket. Similarly, an individual with a monthly income of Rs 250,000 previously paid Rs 21,000 in taxes. Under the new amendments, they will only pay approximately Rs 8,000 per month, resulting in a savings of Rs 13,000. This demonstrates the government's effort to provide relief to lower-income earners and retain professionals within the country. Compared to the previous system, the tax payable from April 1st will be reduced, which we see as a very positive development," explained J.T. Chandana, the Secretary of the Inland Revenue Staff Officers' Association.