Having graduated as a MBBS doctor, Daesha putha has just completed his internship at the Ambilipitiya hospital in Sri Lanka.
Latha and I congratulate him for his great achievement and wish him all the best and good luck for his professional career as a doctor! He is an inspiration to our family. Congratulations, Daesha Putha !
Tuesday, May 20, 2008
In Memory of My Beloved Father and Mother !
On 26 May 2008, we commemorated the 8th death anniversary of our beloved father and mother with a Maha Sangeeka Alms Giving to Maha Sangha. Father and mother are the epitome of eternal love which we always cherish. With the merits invoked at the commemoration, may they attain the supreme Bliss of Nibbana !
Monday, May 19, 2008
Chuti Duwa, Rashanthi, is an Inspiration to Our Family !
Having started her primary education at Kadawatha Methodist School, she joined Viharamahadevi Balika College at Kiribathgoda, Sri Lanka, having won the 5th standard scholarship.
She entered the University of Moratuwa to do Earth Resources Engineering and is sitting for the final examination in May 2008. In addition to her studying engineering, she is doing CIMA too to qualify herself both in engineering and management as well.
She is an exceptionally smart girl who is born with an incredible courage to do anything she is entrusted and can manage everything by herself.
She entered the University of Moratuwa to do Earth Resources Engineering and is sitting for the final examination in May 2008. In addition to her studying engineering, she is doing CIMA too to qualify herself both in engineering and management as well.
She is an exceptionally smart girl who is born with an incredible courage to do anything she is entrusted and can manage everything by herself.
Her future is very bright and Latha and I congratulate her for her expeditions ! All the best and good luck, Chuti duwa !
Little Lindulee is walking now !
We are very much delighted to see our little angel, Lindulee, walking and playing with her Mama,Chandra and others. She has been trained to say 'Bye' and worship elders and the way she does it is absolutely facinating.
She will be 2 years by 15 August 2008, it is nice to see her seeing photo albums to find out whether she is there.
She is very obeidient and listens to her mother. If told not to do any thing bad, she sticks to it without fuss. Her Mom and Dad bring her up with love and care so that she would eventually be a loving and caring young lady when she is grown up.
Saturday, May 17, 2008
Withholding Tax [WHT] on Interest Earned from Fixed Deposits in Sri Lanka
During my holiday in Sri Lanka, I was able to have a conversation with one of our family friends working in Sri Lanka and she said that she has invested some money in one of the commercial banks in Sri Lanka and the bank is charging withholding tax at 10% from the interests earned from her fixed deposits. The bank has advised her verbally that according to the prevailing law, all those who have fixed deposits need to pay withholding tax at 10% from the interest they earn.
Nobody has apparently tried to find the veracity of this law or the practice of banks in terms of the law but has simply allowed the banks to recover tax unabatedly.
As a person who manages my investments very effectively, I need to clarify this malpractice by banks simply due to the sheer ignorance of poor customers. They also have no idea whether these taxes after recovery from their fixed deposits are being sent to the government coffer or not in view of the fact that we do not receive any such document from the banks.
The Commissioner General of Inland Revenue by his circular ref. 2007/1 dated 27.03.2007
has clearly stipulated the conditions and procedure of recovering Withholding Tax from depositors of Banks and Financial Institutions of Sri Lanka.
I need to emphasize if the customer has given a declaration to the bank in the format of the declaration published in the above circular, the recovery of WHT is as follows:
a) If the total interest accruing from assessable income within a year commencing from 1 April up to 31 March of the following year is less than Rs.300, 000.00, the customer should not pay any WHT.
b) If the total interest earned is more than Rs. 300,000.00 but less than 600,000.00, the customer is liable to pay WHT at 2 ½ % of such interest.
c) If the interest earned per annum is more than Rs. 600,000.00, then only the customer needs to pay WHT at 10% on the interest of the fixed deposit.
If the Interest earned by a joint account, only 50% needs to consider by the joint account holder for the calculation of interest earned.
Secondly, there are exemptions granted by the government, which also need to be verified by the customer before making his own declaration.
I further wish to append a letter I received from the Inland Revenue Commissioner in response to a query I made to him which is self explanatory.
ACT 4/22 07.04.2008
Mr. Jass Ranasinthe
Blair-Anderson Ltd.
P.O.Box 53827
Dubai, UAE
Dear Mr. Ranasinghe
Withholding tax (WHT) on Interest earned
I refer to your letter dated January 28, 2008, and wish to inform you the following.
(1) The income from interest is a scheduler tax and in a case of a person other than a company, the maximum rate applicable is 10%. In a case of an individual the tax deducted on deposits of money in banks or financial institutions (including government securities and corporate debt securities) is treated as final tax.
(2) The resident individual is entitled to a tax free allowance of Rs. 300,000 under normal circumstances. However, there was no lower limit when deducting WHT on interest by banks or financial institution. Hence the individual could not get the benefit of the tax free allowance on interest income. Further, the Rs. 300000/- is taxed at of tax is 5%. Considering the above facts, the policy decision was taken by the government, to adjust the scheduler scheme of WHT on interest income in order to provide the benefit of the tax free threshold and the lower rate slab of Rs. 300000/- at 5%.
As you have correctly pointed out the Budget announcement was to apply 5% on interest over and above Rs. 300000/- up to Rs. 600000/-
However, the bank and financial institutions are not in the position to deducts tax free allowance since they are only WHT agencies. Further, the tax free allowance is not only on interest income but on the total assessable income.
Therefore, the provision relating to the WHT has been incorporated to the Act, based on the budget proposals to provide the same effect without deducing tax free allowance.
Since the bank is not in the position to deduct part of the income, instead of deducting Rs. 300000/- and charging on the balance 5%, WHT is charged on the total interest income at 2.5% up to Rs. 600000/-. The proposal is if the interest income is less that Rs. 600000; deduct Rs. 300000/- and charge WHT at 5% on the balance Rs. 300000/-
Amendment is up to Rs. 600000/- charge WHT at 2.5%. (the result would be the same. i.e. WHT is Rs.15,000/-)
Therefore, the guideline issued by the Department which is referred to in your letter is based on the amendment to the provision of the Act.
However, please note that if your total income liable to tax does not exceed Rs. 300000/- or exceeds Rs. 300000/- but does not exceeds Rs. 600000/- you are kindly required to inform the bank not to deduct tax or deduct 5% from Rs 300000/- to Rs. 600000/-
I trust this would serve the purpose intended.
The delay in replying is very much regretted. (A copy of the amendment Act No. 10 of 2007 is attached. Please refer Section 133 of the Act)
Yours faithfully
D.G.P.W. Gunatilake
Deputy Commissioner (Secretariat)
Nobody has apparently tried to find the veracity of this law or the practice of banks in terms of the law but has simply allowed the banks to recover tax unabatedly.
As a person who manages my investments very effectively, I need to clarify this malpractice by banks simply due to the sheer ignorance of poor customers. They also have no idea whether these taxes after recovery from their fixed deposits are being sent to the government coffer or not in view of the fact that we do not receive any such document from the banks.
The Commissioner General of Inland Revenue by his circular ref. 2007/1 dated 27.03.2007
has clearly stipulated the conditions and procedure of recovering Withholding Tax from depositors of Banks and Financial Institutions of Sri Lanka.
I need to emphasize if the customer has given a declaration to the bank in the format of the declaration published in the above circular, the recovery of WHT is as follows:
a) If the total interest accruing from assessable income within a year commencing from 1 April up to 31 March of the following year is less than Rs.300, 000.00, the customer should not pay any WHT.
b) If the total interest earned is more than Rs. 300,000.00 but less than 600,000.00, the customer is liable to pay WHT at 2 ½ % of such interest.
c) If the interest earned per annum is more than Rs. 600,000.00, then only the customer needs to pay WHT at 10% on the interest of the fixed deposit.
If the Interest earned by a joint account, only 50% needs to consider by the joint account holder for the calculation of interest earned.
Secondly, there are exemptions granted by the government, which also need to be verified by the customer before making his own declaration.
I further wish to append a letter I received from the Inland Revenue Commissioner in response to a query I made to him which is self explanatory.
ACT 4/22 07.04.2008
Mr. Jass Ranasinthe
Blair-Anderson Ltd.
P.O.Box 53827
Dubai, UAE
Dear Mr. Ranasinghe
Withholding tax (WHT) on Interest earned
I refer to your letter dated January 28, 2008, and wish to inform you the following.
(1) The income from interest is a scheduler tax and in a case of a person other than a company, the maximum rate applicable is 10%. In a case of an individual the tax deducted on deposits of money in banks or financial institutions (including government securities and corporate debt securities) is treated as final tax.
(2) The resident individual is entitled to a tax free allowance of Rs. 300,000 under normal circumstances. However, there was no lower limit when deducting WHT on interest by banks or financial institution. Hence the individual could not get the benefit of the tax free allowance on interest income. Further, the Rs. 300000/- is taxed at of tax is 5%. Considering the above facts, the policy decision was taken by the government, to adjust the scheduler scheme of WHT on interest income in order to provide the benefit of the tax free threshold and the lower rate slab of Rs. 300000/- at 5%.
As you have correctly pointed out the Budget announcement was to apply 5% on interest over and above Rs. 300000/- up to Rs. 600000/-
However, the bank and financial institutions are not in the position to deducts tax free allowance since they are only WHT agencies. Further, the tax free allowance is not only on interest income but on the total assessable income.
Therefore, the provision relating to the WHT has been incorporated to the Act, based on the budget proposals to provide the same effect without deducing tax free allowance.
Since the bank is not in the position to deduct part of the income, instead of deducting Rs. 300000/- and charging on the balance 5%, WHT is charged on the total interest income at 2.5% up to Rs. 600000/-. The proposal is if the interest income is less that Rs. 600000; deduct Rs. 300000/- and charge WHT at 5% on the balance Rs. 300000/-
Amendment is up to Rs. 600000/- charge WHT at 2.5%. (the result would be the same. i.e. WHT is Rs.15,000/-)
Therefore, the guideline issued by the Department which is referred to in your letter is based on the amendment to the provision of the Act.
However, please note that if your total income liable to tax does not exceed Rs. 300000/- or exceeds Rs. 300000/- but does not exceeds Rs. 600000/- you are kindly required to inform the bank not to deduct tax or deduct 5% from Rs 300000/- to Rs. 600000/-
I trust this would serve the purpose intended.
The delay in replying is very much regretted. (A copy of the amendment Act No. 10 of 2007 is attached. Please refer Section 133 of the Act)
Yours faithfully
D.G.P.W. Gunatilake
Deputy Commissioner (Secretariat)
Monday, May 12, 2008
In the wilderness of Sri Lanka !
Latha and I went on a short holiday to Sri Lanka with the intention of relieving ourselves from the monotonous life in Dubai and the work pressure. On the other hand, being with our families in Sri Lanka itself is refreshing ourselves. Sharing the joy of Sinhala New Year is absolutely tremendous with our family members and friends in addition to staying at home in the wilderness listening to some music and watching TV.
We landed in Sri Lanka on 10 April 2008 and started cleaning and repairing the home as usual despite my cousin brother next door, Gamini Mallie, had tried his best to renovate and clean the house to a reasonable level for our stay. To distribute the gifts, Latha had to spend a considerable time, yet we know that our family members are eagerly waiting for something from us.
Particularly, we gave a gift of brand new laptop computer to Chamath putha who is planning to proceed to Australia for his post graduate studies to be a consultant doctor. Another brand new desktop was brought home for Hemantha putha. How fortunate we are to have sons and daughters of the calibre of Chamath putha, Loku duwa, podi duwa, Chamika putha and Lakshan putha, Daesha putha, Hemantha putha, Anuradha putha, Prabath putha, Ruchini duwa, Titi duwa, etc. in our family.
We landed in Sri Lanka on 10 April 2008 and started cleaning and repairing the home as usual despite my cousin brother next door, Gamini Mallie, had tried his best to renovate and clean the house to a reasonable level for our stay. To distribute the gifts, Latha had to spend a considerable time, yet we know that our family members are eagerly waiting for something from us.
Particularly, we gave a gift of brand new laptop computer to Chamath putha who is planning to proceed to Australia for his post graduate studies to be a consultant doctor. Another brand new desktop was brought home for Hemantha putha. How fortunate we are to have sons and daughters of the calibre of Chamath putha, Loku duwa, podi duwa, Chamika putha and Lakshan putha, Daesha putha, Hemantha putha, Anuradha putha, Prabath putha, Ruchini duwa, Titi duwa, etc. in our family.
Loku duwa, of course, had been very busy preparing herself for her post graduate medical exam in addition to her daily routine at Ward No.33 at the General Hospital and could not find time to spend the time with us except the last couple of days of our stay in Sri Lanka.
Hemantha putha and Gamini Mallie extended a tremendous help to me to organize the alms giving in memory of my beloved parents. We would have been in big trouble unless Hemantha putha creped into the ceiling to repair the leaks in the heavy rain which very badly flooded our home.
We were delighted with the visit of Anuradha putha together with his brand new bride, Chamila, and we are very happy for him to have an elegant young lady like Chamila duwa. She is a girl of irresistible charm and unique simplicity. We love her very much and welcome to our family.
Hemantha putha and Gamini Mallie extended a tremendous help to me to organize the alms giving in memory of my beloved parents. We would have been in big trouble unless Hemantha putha creped into the ceiling to repair the leaks in the heavy rain which very badly flooded our home.
We were delighted with the visit of Anuradha putha together with his brand new bride, Chamila, and we are very happy for him to have an elegant young lady like Chamila duwa. She is a girl of irresistible charm and unique simplicity. We love her very much and welcome to our family.
Latha’s father still can walk a bit despite being 92 years old simply due to the tremendous love and care of Palitha mallie, Rajini nangie and kids. We owe them a lot for their invaluable sacrifice towards the father.
We had a one day trip to Hatharaliyadda, Thumpane, via Kurunegala with akka and loku aiya to pay a visit to Sriyanthi Nangie's sister. It is a beautiful area of hills and valleys with a very mild climate as shown in the picture above.
Latha had a hectic time, no doubt, all these days, yet we can turn back and say its a wonderful holiday.
Latha had a hectic time, no doubt, all these days, yet we can turn back and say its a wonderful holiday.
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