Sri Lanka Capital Gains Tax Calculator

Capital gains tax in Sri Lanka is charged on the gain you realise when you dispose of an investment asset. The gain is worked out the same way for everyone; only the rate applied to it differs. Since 3 June 2026 that rate is 15% for individuals and partnerships, and 30% for trusts, unit trusts, mutual funds, and NGOs; companies remain at 30%. Holding period never affects the rate — a one-week flip and a twenty-year hold are charged identically. The statute that governs the regime is the Inland Revenue Act No. 24 of 2017, as amended by the Inland Revenue (Amendment) Act No. 11 of 2026.

The whole computation is three lines, and it is worth having them in front of you before reading the detail below:

1. Net consideration = sale price − selling costs (broker, legal, notary).
2. Cost base = purchase price (or 30-Sep-2017 market value) + capital improvements + buying costs.
3. Tax = (net consideration − cost base) × your rate.

Everything else on this page is either an exemption that sets that tax to zero, or a rule about which figure is allowed into lines 1 and 2.

Step 1 — Determine the cost base (Section 37)

The cost base is what you spent acquiring and improving the asset. It combines three figures: the acquisition cost (or the 30-Sep-2017 market value if you elect the step-up), plus any capital improvements you made, plus the incidental costs you paid to acquire the asset (stamp duty on purchase, legal fees, notary fees, brokerage on the buy side). If you are unsure what stamp duty you originally paid on a property purchase, the Sri Lanka stamp duty calculator reconstructs it from the deed value so you can fold the correct figure into the cost base.

The 30-Sep-2017 step-up exists because the current CGT regime started on 1 April 2018. For any asset you acquired before 30 September 2017 — the day before the new law took effect — the First Schedule (paragraph 7) lets you substitute the market value at that date for the original cost. This ring-fences pre-regime appreciation, so you are taxed only on the gain since the law came in. The toggle on the calculator activates only when your acquisition date qualifies.

Step 2 — Determine the net consideration

The net consideration is the sale price agreed with the buyer lessany incidental disposal costs — broker commission, legal fees, notary charges, and similar selling expenses. The calculator subtracts these for you and labels the result "A" on the working.

Step 3 — Compute the gain

The gain is netConsideration − adjustedCostBase. If the result is negative, the calculator reports the capital loss but floors the taxable gain at zero — losses do not generate refunds. Under Section 36 of the IRA, losses can be carried forward against future investment-asset gains.

Step 4 — Apply exemptions (Third Schedule)

• CSE-listed shares: gains are exempt. A 0.30% Share Transaction Levy applies separately (deducted by your broker) and is not CGT.
• Principal place of residence: owned and occupied for at least 3 years, and no PPR exemption claimed in the previous 10 years.

If neither exemption applies, the calculator returns a tax line.

Step 5 — Apply the rate and compute net proceeds

The tax is taxableGain × rate per Section 7 and the First Schedule, where the rate is the one for your taxpayer type on the realisation date — 15% for an individual or partnership disposing on or after 3 June 2026, 10% before that date, and 30% for trusts, unit trusts, mutual funds, NGOs and companies. The net proceeds — the actual cash you walk away with — are saleConsideration − disposalCosts − tax. CGT is payable within one month of the realisation date using IRD Form IIT_CGT_001 (Asset Disposal Return).

Capital gains tax vs. income tax — which one applies?

Capital gains tax only applies to the realisation of an investment asset — something you held to appreciate in value, such as land you were not trading in. If buying and selling property or shares is your actual business, the profit is ordinary business income and is taxed under the normal income tax brackets instead, not at the flat CGT rate. The same split applies to rent: collecting rent is income, not a capital gain. For the income side, use the Sri Lanka income tax calculator for salary and business profits, or the rental income tax calculator if you are taxed on rent received. CGT is charged once, on the gain at the point of sale; income tax recurs each year on what the asset earns.

Edge cases the calculator handles

• Same-day or very short holds. The rate does not change with holding period — a one-week flip and a 20-year hold are taxed identically. Holding length only matters for the 3-year PPR test.
• Gains that net to exactly zero. When net consideration equals the cost base, the gain is zero and the tax line shows Rs 0 — no rounding artefact pushes it positive.
• Step-up that wipes out the gain. If the 30-Sep-2017 market value plus improvements exceeds the sale price, the result is a loss even on a nominally higher sale, because pre-2018 appreciation is excluded from the taxable base.
• PPR ticked but under 3 years. The calculator does not silently grant the exemption — it falls back to a taxable charge and shows a warning explaining why the holding does not qualify.

How to reduce capital gains tax in Sri Lanka, legally

This is the most-searched question on the topic, and the honest answer is that a taxable gain cannot be wished away — but the Act contains five legitimate levers, and most overpayment comes from not using them.

1. Claim the principal-place-of-residence exemption when you qualify. Owned and occupied for 3 years or more, with no PPR claim in the previous 10 years, and the gain drops to nil. Because the claim is once-per-10-years, a seller with two homes to dispose of should spend the claim on the larger gain.
2. Use the 30 September 2017 step-up on any pre-regime asset.Land bought in 1998 and sold today is taxed only on the growth since 2017, not since 1998 — but only if you commission a registered valuer's report at the substituted date. Sellers who skip the valuation and default to the original deed value routinely hand the IRD tax on two decades of appreciation that Parliament never intended to charge.
3. Build the cost base to the last rupee. Purchase stamp duty, notary and legal fees, brokerage on the buy side, the land registration fee, and every capital improvement all raise the cost base and lower the gain. At the 15% rate, every Rs 100,000 of substantiated cost you find is Rs 15,000 of tax you do not pay. If the original figures are lost, the stamp duty calculator and the land registration fee calculator reconstruct them from the deed value.
4. Hold listed equity rather than unlisted.A gain on Colombo Stock Exchange listed shares is exempt outright; the same company's shares sold privately before listing are fully taxable.
5. Do not waste a capital loss. Section 36 lets a loss on one investment asset be carried forward against future investment-asset gains. Realising a loss-making plot in the same period as a large gain is planning; failing to record the loss at all is money left behind.

What is notavailable: there is no indexation for inflation, no discount for holding an asset longer, no annual tax-free allowance, and no rollover relief for reinvesting the proceeds in another property. Under-declaring the deed value is not planning either — it is evasion, and the notary's copy of the deed is filed with the Land Registry.

Why Indian capital gains rules keep appearing in your search results

Search for "how to calculate capital gains tax" from Colombo and Google will often answer with Indian law: a 12.5% long-term rate, a short-term rate of 20% on equity, indexation being withdrawn, an exemption quoted in lakhs. None of that governs a Sri Lankan disposal. Sri Lanka has never had a long-term/short-term split, has never offered an indexation allowance, and has no annual exemption. One rate applies, and it is chosen by who the seller is rather than how long the asset was held. If a figure you have read is denominated in Indian rupees or expressed in lakhs or crores, it is not the rule your deed will be assessed under.

Filing, the one-month deadline, and what late payment costs

CGT is not settled with your annual return. It is a standalone charge due within one month of the realisation date, filed on IRD Form IIT_CGT_001 (the Asset Disposal Return) through the IRD e-Services portal, with the tax paid to the Commissioner General in the same window. That deadline runs from the deed, not from the year end, so a sale signed on 12 August must be filed and paid by 12 September. Miss it and the Act applies a penalty on the unpaid tax plus statutory interest for each month it remains outstanding — see the tax penalty calculator for what that compounds to, and the tax deadline calendar for how the CGT deadline sits alongside your other IRD dates. If you are unsure whether you are a Sri Lankan tax resident for the year of the sale — which decides whether Section 84 withholding applies to your buyer — the tax residency calculator settles it on the day-count test before you sign.

Records to keep before you file

The figure this calculator produces is only as defensible as the paperwork behind it. The IRD can ask you to substantiate every line of the cost base, so keep the original sale and purchase deeds, the notary's and broker's invoices, dated receipts and bank-transfer evidence for every capital improvement, and — if you used the 30-Sep-2017 step-up or inherited the asset — a registered valuer's report for the substituted value. For the principal place of residence exemption, hold on to utility bills, electoral registration, and bank statements showing the property as your address across the qualifying period. Retain these for at least five years after the realisation date. With the working in hand, complete IRD Form IIT_CGT_001 (Asset Disposal Return) and pay within one month of the sale; the "Copy working" button on the calculator gives you a plain-text version of the same line-by-line computation to attach to your records.

• Inland Revenue Act No. 24 of 2017 (with amendments) — Sections 7, 36, 37; First & Third Schedules
• IRD — Guideline on Gains from Realisation of Investment Assets
• Inland Revenue (Amendment) Act No. 11 of 2026 (certified 3 June 2026) — section 36 amends the First Schedule CGT rates
• IRD Notice SEC/PN/IT/2026/02 (8 June 2026) — item 20, Revision of Capital Gain Tax Rates
• Inland Revenue (Amendment) Act No. 45 of 2022 — the preceding 10% CGT rate
• Colombo Stock Exchange — Investor Education (CSE-listed share exemption)
• Inland Revenue Department of Sri Lanka — official site

The rates and the calculator's rate logic were checked on 2026-09-01 directly against the primary text of Act No. 11 of 2026 (not secondary commentary) and IRD notice SEC/PN/IT/2026/02. Section 38 of that Act amends the Third Schedule only in respect of government-assisted private schools, foreign-currency loans, gem and jewellery receipts, and Sri Lanka Air Force payments — it leaves the principal-place-of-residence and CSE-listed-share exemptions untouched, and nothing in the Act alters the 30 September 2017 step-up. Non-resident withholding mechanics under Section 84 are out of scope for v1.