The Inland Revenue Department has announced that, starting 1st of April 2025, banks and financial institutions must deduct a 10% Advance Income Tax (AIT) on interest, discounts, and Islamic financial income paid to deposit holders.
This directive, issued under Circular No. SEC/2025/E/02, applies to all individuals receiving such payments from Sri Lankan sources.
Non-resident deposit holders may be eligible for reduced AIT rates under the Double Tax Avoidance Agreement (DTAA) if they obtain a valid clearance certificate from the Inland Revenue Department.
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