Important Update – Capital Gains Tax Rates Revised from 03 June 2026

The Inland Revenue (Amendment) Act No. 11 of 2026 introduced significant changes to Capital Gains Tax (CGT) with effect from 03 June 2026.

Accordingly, the applicable Capital Gains Tax rate now depends on the date on which the investment asset is disposed of.

Our Capital Gains Tax Calculator Sri Lanka automatically applies the appropriate tax rate based on the disposal date entered by the user.

Capital Gains Tax Rates Before 03 June 2026

For disposals prior to 03 June 2026, the following rates generally applied:

Taxpayer Category	Rate
Individuals	10%
Companies	30%

Capital Gains Tax Rates Effective from 03 June 2026

For disposals on or after 03 June 2026:

Taxpayer Category	Rate
Individuals	15%
Partnerships	15%
Trusts	30%
Unit Trusts / Mutual Funds	30%
Non-Governmental Organizations	30%

The calculator on this page automatically determines which rate applies based on the disposal date entered.

New Rules Affecting Cash Transactions

Taxpayers should also be aware that payments of Rs. 500,000 or more made in cash may not qualify to be included in the cost of an asset for income tax purposes unless the payment satisfies the requirements prescribed by the Inland Revenue Act.

For this reason, taxpayers should maintain:

• Bank transfer records
• Account payee cheques
• Account payee bank drafts
• Electronic payment records
• Deposit slips showing direct deposits to the recipient’s bank account

Maintaining proper payment records can be important when establishing the cost base of an investment asset.

Free Capital Gains Tax Calculator Sri Lanka

The MAPA Associates Capital Gains Tax Calculator allows taxpayers to:

✓ Calculate estimated Capital Gains Tax

✓ Determine the applicable CGT rate

✓ Generate the correct Tax Type Code (23)

✓ Identify the relevant Period Code

✓ Calculate the filing and payment deadline

✓ Review common warning situations including inherited assets, principal residences and related-party transactions

Important Disclaimer

The calculator is provided for general information purposes only and does not constitute tax advice, legal advice or a tax opinion.

The results are estimates based solely on information entered by the user and should not be relied upon without obtaining professional advice.

Taxpayers should consult a qualified tax professional before filing a return or making a payment to the Inland Revenue Department.

in substantiating the transaction.

Capital Gains Tax Payment Deadline

CGT Return and tax payment must generally be completed:

Within 30 days after the end of the month in which the asset was realized.

Example

Asset Sold: 15 June 2026

End of Month: 30 June 2026

Payment Due Date: 30 July 2026

Late payments may result in penalties and interest charges.

Capital Gains Tax Type Code

When making a payment to the Inland Revenue Department:

Tax Type Code: 23

Description: Capital Gains Tax

Capital Gains Tax Period Code

The payment period code is generally based on the month in which the asset was disposed of.

Format:

YYMM0

Examples:

Disposal Date	Period Code
15 January 2026	26010
20 March 2026	26030
15 June 2026	26060
10 December 2026	26120

Using the correct period code is important to ensure the payment is credited to the correct tax period.

How to Pay Capital Gains Tax

Taxpayers may pay CGT through:

Online Tax Payment Platform (OTPP)

Payments can be made electronically through participating banks using the IRD online payment system.

Bank Payments

Taxpayers may also make payments through authorized banks using the relevant tax payment details.

Information normally required includes:

• TIN Number
• Tax Type Code (23)
• Period Code
• Tax Amount

Common Mistakes Made by Property Sellers and Investors

Many taxpayers encounter difficulties when preparing Capital Gains Tax (CGT) calculations due to inadequate records or misunderstandings of the tax rules.

Common mistakes include:

• Losing purchase deeds and acquisition documents.
• Failing to retain evidence of stamp duty and legal fees.
• Not maintaining records of improvement costs.
• Claiming costs that cannot be supported by documentary evidence.
• Making large cash payments without maintaining acceptable payment records.
• Using incorrect CGT rates following legislative changes.
• Using incorrect tax type codes or period codes when making payments.
• Missing filing and payment deadlines.
• Assuming Capital Gains Tax does not apply to a transaction.
• Assuming inherited property is automatically exempt from CGT.
• Assuming a principal residence automatically qualifies for an exemption.
• Failing to seek professional advice before disposing of an investment asset.

These issues can complicate the preparation of the CGT return and may increase the risk of disputes, adjustments, penalties or interest.

Free Sri Lanka Capital Gains Tax Calculator

MAPA Associates provides a free online Capital Gains Tax Calculator designed to assist taxpayers in estimating Capital Gains Tax liabilities arising from the disposal of investment assets.

The calculator automatically:

✓ Calculates the estimated Capital Gain

✓ Calculates the estimated Capital Gains Tax liability

✓ Applies the appropriate CGT rate based on the disposal date

✓ Applies historical rates for disposals before 03 June 2026

✓ Applies revised rates effective from 03 June 2026

✓ Generates the applicable Tax Type Code (23)

✓ Generates the correct Period Code

✓ Calculates the estimated filing and payment deadline

✓ Provides warnings relating to inherited assets

✓ Provides warnings relating to principal residences

✓ Provides warnings relating to related-party transactions

✓ Calculates ownership-based CGT liabilities for jointly owned assets

The calculator is intended as an estimation tool only and should not be relied upon as a substitute for professional tax advice.

Need Assistance with a Capital Gains Tax Return?

MAPA Associates (Chartered Accountants) provides comprehensive assistance relating to Capital Gains Tax and property transactions in Sri Lanka.

Our services include:

✓ Capital Gains Tax Calculations

✓ Property Sale Tax Advice

✓ Cost Base Reviews

✓ Documentation Reviews

✓ CGT Return Preparation

✓ IRD Compliance Assistance

✓ Tax Planning Advice

✓ Inherited Property Tax Reviews

✓ Principal Residence Reviews

✓ Related Party Transaction Reviews

✓ Property Transfer Tax Advisory Services

Whether you are selling land, a residential property, commercial property, shares or another investment asset, obtaining professional advice before completing the transaction can help avoid costly mistakes and unexpected tax exposures.

Contact MAPA Associates

MAPA Associates (Chartered Accountants)

📞 0770 11 77 60

📞 0702 861 981

🌐 startabusinessinsrilanka.com

📧 info@startabusinessinsrilanka.com

Frequently Asked Questions (FAQ)

Have Capital Gains Tax Rates Changed in Sri Lanka?

Yes. Capital Gains Tax rates were revised with effect from 03 June 2026. The applicable rate depends on the disposal date of the investment asset.

What CGT Rate Applied Before 03 June 2026?

For disposals before 03 June 2026, the calculator generally applies:

• Individuals – 10%
• Companies – 30%

What CGT Rates Apply From 03 June 2026?

For disposals on or after 03 June 2026:

• Individuals – 15%
• Partnerships – 15%
• Trusts – 30%
• Unit Trusts / Mutual Funds – 30%
• Non-Governmental Organizations – 30%

What is Capital Gains Tax (CGT)?

Capital Gains Tax is a tax imposed on gains arising from the realization of investment assets such as land, buildings, shares and certain other qualifying assets.

Does Capital Gains Tax Apply to Land Sales?

Yes. Capital Gains Tax may apply when land held as an investment asset is sold or otherwise disposed of.

Does Capital Gains Tax Apply to Inherited Property?

The inheritance itself is not generally the taxable event. However, when inherited property is subsequently sold, Capital Gains Tax may apply depending on the applicable rules and circumstances.

Does Capital Gains Tax Apply to My Principal Place of Residence?

Certain disposals of a principal residence may qualify for special treatment or exemptions. Taxpayers should obtain professional advice before assuming that a disposal is exempt.

What Documents Should I Keep?

Taxpayers should retain:

• Purchase Deeds
• Sale Deeds
• Stamp Duty Records
• Legal Fee Invoices
• Improvement Cost Evidence
• Bank Payment Records
• Valuation Reports (where applicable)

Can Cash Payments Affect My CGT Calculation?

Yes. Recent legislative changes introduced restrictions relating to large cash transactions. Taxpayers should maintain acceptable payment records and obtain professional advice where significant cash payments are involved.

What is the Tax Type Code for Capital Gains Tax?

The Tax Type Code for Capital Gains Tax is:

Tax Type Code: 23

What is the CGT Period Code?

The period code generally corresponds to the month in which the investment asset was disposed of and is required when making payments to the Inland Revenue Department.

When Must Capital Gains Tax Be Paid?

Generally, Capital Gains Tax must be paid within 30 days after the end of the month in which the investment asset was realized.

Can I Use the MAPA Associates CGT Calculator for Tax Filing?

The calculator provides an estimate only and should not be used as a substitute for professional tax advice or formal tax computations.

Why Should I Obtain Professional Advice Before Selling Property?

Professional advice can help identify exemptions, verify the cost base, review supporting documentation, determine the correct tax treatment and minimize the risk of penalties or disputes with the Inland Revenue Department.

Have Capital Gains Tax Rates Changed in Sri Lanka?

Yes. Capital Gains Tax rates were revised with effect from 03 June 2026. The applicable rate depends on the taxpayer category and the date on which the investment asset was disposed of.

Does Capital Gains Tax Apply to My Principal Place of Residence?

Certain disposals of a principal place of residence may qualify for special tax treatment or exemptions under the Inland Revenue Act. Taxpayers should obtain professional advice before assuming a disposal is exempt from Capital Gains Tax.

Does Capital Gains Tax Apply to Gifts?

The tax treatment of assets transferred by way of gift depends on the circumstances of the transaction and the applicable provisions of the Inland Revenue Act. Professional advice should be obtained before proceeding with a transfer.

Do I Need a TIN Number to Pay Capital Gains Tax?

Yes. A Taxpayer Identification Number (TIN) is generally required when making tax payments and dealing with the Inland Revenue Department.

Can Joint Owners Calculate Their Share of Capital Gains Tax Separately?

Yes. Where an asset is jointly owned, each owner’s Capital Gains Tax liability may depend on their ownership percentage and the applicable tax rules.

Can Cash Payments Affect My Capital Gains Tax Calculation?

Yes. Taxpayers should maintain proper evidence of acquisition costs and payments. Recent legislative changes introduced restrictions relating to certain large cash transactions, which may affect the deductibility of expenses or inclusion of amounts in the cost base of an asset.

What Happens if I Use the Wrong Period Code?

Using an incorrect period code may result in delays in crediting payments to the correct tax account and may require clarification with the Inland Revenue Department.

What Happens if I Pay Capital Gains Tax Late?

Late payments may result in interest, penalties and additional compliance obligations under the Inland Revenue Act.

Is the MAPA Associates Capital Gains Tax Calculator Free?

Yes. The calculator is provided free of charge as a public information and estimation tool to assist taxpayers in understanding potential Capital Gains Tax liabilities.

Is the Capital Gains Tax Calculator Suitable for Property Sales?

Yes. The calculator can be used to estimate Capital Gains Tax arising from the sale of land, residential property, commercial property and certain other investment assets. However, the results are estimates only and professional advice is recommended before relying on the calculation.

Why Should I Obtain Professional Advice Before Selling Property?

Professional advice can help identify available exemptions, verify the cost base, review supporting documentation, determine the correct tax treatment and reduce the risk of penalties or disputes with the Inland Revenue Department.

Can MAPA Associates Assist With Capital Gains Tax Compliance?

Yes. MAPA Associates assists clients with:

✓ Capital Gains Tax Calculations

✓ Cost Base Reviews

✓ Documentation Reviews

✓ CGT Return Preparation Assistance

✓ Company Secretarial Matters

✓ Tax Compliance Support

✓ Business Advisory Services

✓ Coordination with Tax Consultants and Chartered Accountants where required