IRD Notice: Statutory Personal Income Tax Free Allowance Increased to Rs. 1,800,000 for Y/A 2025/2026

The Department of Inland Revenue (IRD) Sri Lanka has released guidance regarding the revised personal income tax regime applicable for the Year of Assessment (Y/A) 2025/2026 under the Inland Revenue Act No. 24 of 2017 (as amended). ### Core Revisions for Sri Lankan Taxpayers 1. **Enhanced Personal Tax-Free Relief:** Every resident individual is now entitled to a statutory personal relief of Rs. 1,800,000 per year of assessment. Salaried employees subject to Advance Personal Income Tax (APIT) will experience immediate tax relief on earnings below Rs. 150,000 monthly. 2. **Revised Progressive Tax Slabs:** - First Rs. 1,000,000 of taxable income: 6% - Next Rs. 500,000: 18% - Next Rs. 500,000: 24% - Next Rs. 500,000: 30% - Balance taxable income exceeding Rs. 2,500,000: 36% 3. **Solar Energy Incentives:** Taxpayers investing in solar panel systems for residential properties can claim qualifying deductions up to Rs. 600,000 against assessable income. ### Chartered Accountant's Advisory Note *"This statutory adjustment delivers substantial cash-flow relief for high-income professionals and mid-tier earners in Sri Lanka. However, taxpayers must ensure that withholding certificates (T-10) and interest statements are accurately matched against RAMIS declarations to avoid compliance queries."* — **Roshan Mahendra Marcus, CA**.