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:
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is registered at the MRA ,i.e has been allocated a Tax Account Number
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derives a chargeable income whether he is registered or not
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Net Income exceeding the Reliefs, Deductions & Allowances Category A per year
- Every person who, in an income year derives total net income of an amount exceeding 500,000 rupees
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Gross income from business exceeding Rs 2 million per year
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Emoluments from which tax has been withheld
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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
Income Tax Act – First Schedule – Part I
An individual is taxed on his annual chargeable income as from 1 July 2025 as follows:
| Chargeable Income | Tax Rate |
| First Rs 500,000 | 0% |
| Next Rs 500,000 | 10% |
| Remainder | 20% |
| Annual Chargeable Income | Rate of Income tax | Annual Chargeable Income | Rate of Income tax |
| First Rs 390,000 | 0% | Next Rs 300,000 | 12% |
| Next Rs 40,000 | 2% | Next Rs 300,000 | 14% |
| Next Rs 40,000 | 4% | Next Rs 400,000 | 16% |
| Next Rs 60,000 | 6% | Next Rs 500,000 | 18% |
| Next Rs 60,000 | 8% | On the remainder | 20% |
| Next Rs 300,000 | 10% | |