The Inland Revenue Department has announced that from April 1, 2025, banks and financial institutions must deduct a 10% Advance Income Tax (AIT) on interest, discounts, and Islamic financial income paid to deposit holders.

The directive, issued via Circular No. SEC/2025/E/02, applies to any person receiving such payments from sources in Sri Lanka.

Provisions under the Double Tax Avoidance Agreement (DTAA) may apply for non-resident deposit holders seeking lower AIT rates through a valid clearance certificate from the Inland Revenue Department. (Newswire)

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