Sri Lanka Consolidated Acts

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Inland Revenue Act (No. 28 of 1979) - Sect 24

Deductions not allowed in ascertaining profits and income

24.
(1) For the purpose of ascertaining the profits or income of any person from any source, no deduction shall be allowed in respect of -
(a) domestic or private expenses, including the cost of travelling between the residence of such person and his place of business or employment;
(b) expenses incurred in connection with his employment other than the expenses referred to in paragraphs (h) and (j) of subsection (1) of section 23 ;
(c) any expenditure incurred in travelling outside Sri Lanka in connection with any trade, business, profession or vocation carried on or exercised in Sri Lanka by such person, other than the expenses incurred in travelling outside Sri Lanka solely in connection with -
(i) the promotion of the export trade of any article or goods ; or
(ii) the provision of any services for payment in foreign currency ;
(d) entertainment expenses incurred by such person or his employee or on his behalf in connection with any trade, business, profession or vocation carried on or exercised by him ;
(e) entertainment allowances paid by such person to his executive officer;
(f) one-quarter of such person's cost of advertisement in connection with any trade, business, profession or vocation carried on or exercised by him other than the cost of advertising outside Sri Lanka incurred solely in connection with the export trade of any articles or goods or the provision of any services for payment in foreign currency;
(g) any disbursements or expenses of such person not being money expended for the purpose of producing such profits and income ;
(h) any expenditure of a capital nature or any, loss of capital incurred by such person;
(i) the cost of any improvements effected by such person ;
(j) any sum recoverable under a contract of insurance or indemnity, if the amount received under such contract is not treated as income under section 89 ;
(k) rent of, or expenses in connection with, any premises or part of premises not occupied or used for the purposes of producing such profits and income;
(l) any amounts paid or payable by such person by way of -
(i) income tax, or super tax or surtax or any other tax of a similar character in any country with which an agreement made by the Government of Sri Lanka for the avoidance of double taxation is in force (other than the excess of any such income tax, or super tax or surtax or any other tax of a similar character over such maximum amount of the credit in respect of Sri Lanka income tax as is allowed by paragraph (c) of subsection (1) of section 82) ; or
(ii) Sri Lanka income tax or Commonwealth tax as defined in section 83 ; or
(iii) any prescribed tax or levy.
(m) any annuity, ground rent, or royalty paid by such person; or
(n) any payment by such person to any pension, provident, savings, widows' and orphans' pension, or other society or fund, except such payments as are allowed under paragraph (j) of subsection (1) of section 23.
(2) No person carrying on any trade or business or exercising any profession or vocation shall be entitled to any sum for depreciation by wear and tear, or for renewal, or to any allowance under section 23 (1) (a) or 23 (1) (e) or 23 (1) (f), in respect of any vehicle used for travelling for the purpose of his trade, business, profession or vocation except in respect of a motor cycle or bicycle used for such purpose by an officer, who is not an executive officer, in the employment of such person.
(3) In ascertaining the profits or income arising from annual value or rent of land and improvements thereon no deduction shall be made for outgoings and expenses except those authorized in section 5 or section 6, as the case may be, except in the case of a company carrying on the business of letting commercial buildings.

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