From April 1, 2025, the withholding tax on interest from fixed deposits in Sri Lanka has been increased from 5% to 10%. However, the Inland Revenue Department (IRD) states that individuals whose total annual income is less than Rs. 1.8 million are eligible to claim a refund of the tax deducted on interest.
To do so, eligible individuals must submit a self-declaration either to their bank or directly to the Inland Revenue Department. The declaration should confirm that their annual income for the assessment year — from April 1 of one year to March 31 of the next — falls below the threshold. (Download application here)
Applicants are also required to provide their Taxpayer Identification Number (TIN) when submitting the declaration. Those who do not currently possess a TIN must apply for one by downloading the relevant form from the IRD’s website and submitting it to the department (Download the TIN registration application here).
The IRD further advises the public to avoid making false declarations regarding their income, warning that such actions may lead to penalties under the Inland Revenue Act.
