Obligation to file a return

Income Tax Returns for individuals

An individual who is in receipt of emoluments, pension or deriving income from trade, business, profession, agriculture, rents and other sources should fill in a return of income if he:

  • is registered at the MRA ,i.e has been allocated a Tax Account Number
  • derives a chargeable income whether he is registered or not
  • Net Income exceeding the Income Exemption Threshold (IET) Category A per year
  • Gross income from business exceeding Rs 2 million per year
  • Emoluments from which tax has been withheld
  • Income which has been subject to tax deduction at source

Calculation of chargeable income

Chargeable income = Gross Income – allowable deductions – Exemptions and reliefs.

Allowable deductions include expenditure incurred in the production of income ,losses ,bad debts and annual allowance(instead of depreciation)

Tax Rates

An individual having an annual net income :

  1. Not exceeding Rs 650,000 : 10%
  2. Exceeding Rs 650,000 : 15%