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 :
- Not exceeding Rs 650,000 : 10%
- Exceeding Rs 650,000 : 15%