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Bank interest & AIT

10% Advance Income Tax withheld on deposit interest — creditable against your return, not a final tax.

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Creditable

Reflects Year of Assessment 2025/2026 · Last updated 2026-06-13 · Reviewed by TaxWise · Source: Inland Revenue (Amendment) Act No. 02 of 2025 (interest AIT 5% → 10%), Inland Revenue Department — Advance Income Tax on interest

Calculator
Bank interest & AIT
Advance Income Tax withheld on deposit interest for Y/A 2025/2026. Indicative — verify against your bank's WHT certificate.
Gross interest / discount (LKR)Rs. 500,000
Rs. 10,000Rs. 20,000,000
Result
Rs.50,000
10% AIT · Creditable
AIT withheldRs. 50,000
Net interest receivedRs. 450,000
TreatmentCreditable against IIT

Interest AIT is creditable, not a final tax — it reconciles on your annual return and is refundable where over-withheld. If you have no taxable income for the year, you may be able to stop the deduction via a self-declaration.

Estimator only

Single interest figure. No certificate matching or refund reconciliation.

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AIT on interest is credit, not final tax. A self-declaration to stop the deduction requires a TIN; a false or misleading declaration carries a penalty up to Rs. 200,000 and bars future declarations. Rate from the active Y/A tax config.
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Reclaim over-withheld interest AIT

TaxWise credits your 10% interest AIT against your final liability and surfaces any refund due — no AIT left on the table.

  • Aggregate interest across accounts with AIT credits applied
  • Creditable AIT netted against gross tax on the return
  • Self-declaration eligibility flagged when you have no taxable income
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Filing opens Apr 2026 · Y/A 2025/2026 return due 30 Nov 2026

Frequently asked questions

Can I avoid AIT on my fixed deposit in Sri Lanka?
Only by self-declaration, and only if you have no taxable income for the year (total assessable income below the Rs. 1,800,000 relief). Otherwise the 10% AIT applies and is credited on your return.
Is interest AIT a final tax?
No. Interest AIT is creditable, not final — it reconciles against your annual liability and is refundable where over-withheld. (Dividend WHT, by contrast, is a final tax.)
What is the AIT rate on bank interest for 2025/2026?
10%, withheld at source from 1 April 2025 (up from 5%).

Related calculators

AIT self-declaration check

Are you eligible to stop the 10% AIT on bank interest? Check against the Rs. 1.8M relief threshold.

Dividend WHT

15% withholding on dividends from a resident company — a final tax, not reconciled or refunded.

WHT on payments

Sub-contractor 5%, rent 10%, interest 10% AIT, services 5%. Pick the payment type, get the rate and the form.

Estimator disclaimer

Results follow the Inland Revenue Act and the 2025 Amendment for Y/A 2025/2026 but are not tax advice. Rounding, missing inputs, and simplified assumptions can change the final figure — only a filed return counts with IRD.