Understanding Personal Relief and Its Evolution Under the Inland Revenue Act-(Published Date-25.10.2025)
What is Personal Relief?
Personal relief is a tax benefit granted to individuals when ascertaining their tax liability. It allows taxpayers to reduce their assessable income when calculating taxable income. In simple terms, personal relief helps lower the portion of income subject to taxation — thereby easing the tax burden on individuals.
Under the Inland Revenue Act, every individual who qualifies can deduct this relief amount before applying the relevant tax rates. This deduction plays a vital role in ensuring that lower and middle-income earners are not unduly taxed.
Who Can Claim Personal Relief?
Personal relief is available to:
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All resident individuals, and
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Non-resident Sri Lankan citizens.
This ensures that Sri Lankans working or residing overseas can also enjoy the benefit when determining their tax liability on Sri Lanka-sourced income.
Evolution of Personal Relief in Sri Lanka
Since the introduction of the Inland Revenue Act, No. 24 of 2017, the value of personal relief has changed several times to reflect the country’s evolving economic and fiscal conditions.
Below is a timeline showing how personal relief has evolved over the years:
| Period | Personal Relief Amount (Rs.) |
|---|---|
| 01.04.2018 – 31.12.2019 | 500,000 |
| 01.01.2020 – 31.12.2022 | 3,000,000 |
| 01.01.2023 – 31.03.2025 | 1,200,000 |
| From 01.04.2025 onwards | 1,800,000 |
Year of Assessment (Y/A) Breakdown
| Year of Assessment | Relief Amount | Remarks |
|---|---|---|
| 2018/2019 | Rs. 500,000 | Applicable throughout the year |
| 2019/2020 | Rs. 375,000 for first 9 months + Rs. 750,000 for last 3 months = Rs. 1,125,000 | Reflects transitional adjustment |
| 2020/2021 | Rs. 3,000,000 | Major upward revision under 2020 reforms |
| 2021/2022 | Rs. 3,000,000 | Continued high threshold |
| 2022/2023 | Rs. 2,250,000 for first 9 months + Rs. 300,000 for next 3 months = Rs. 2,550,000 | Transitional phase due to 2023 reforms |
| 2023/2024 | Rs. 1,200,000 | Reflects revised tax policy |
| 2024/2025 | Rs. 1,200,000 | Maintained level from previous year |
| 2025/2026 | Rs. 1,800,000 | Proposed increase effective from 01.04.2025 |
