Think about the last time your bank credited interest to your fixed deposit. The amount that landed in your account was a little smaller than the interest you actually earned. Most people notice the difference, shrug, and move on.
That difference didn’t disappear. It was deducted as tax and reported to the Inland Revenue Department (IRD) against your name. The same thing may be happening every time your employer runs payroll, and every time a client pays one of your invoices.
So there’s a tax record being built about you all year, whether or not you ever look at it. The people writing it are your bank, your employer and your clients. The only person who usually hasn’t seen it is you.
How your tax record gets written without you
Sri Lanka collects a large share of income tax before the money reaches you. The idea is simple. Instead of waiting for you to pay tax once a year, the person paying you holds back a portion and sends it to IRD on your behalf.
You’ll hear a few names for this:
- AIT / WHT on interest. Advance Income Tax, also called Withholding Tax. This is what banks deduct from the interest on your savings and deposits.
- APIT. Advance Personal Income Tax. This is the tax your employer takes out of your salary before it reaches you.
- WHT on fees. Withholding Tax that some clients deduct from consultancy and service fees before paying you.
Whoever deducts the tax, whether it’s the bank, the employer or the client, has to report it to IRD, and the report includes your taxpayer number. That’s how it ends up on your record.
Here’s a simple example with made-up numbers. Say you have Rs. 2,000,000 in a fixed deposit that earns Rs. 200,000 in interest for the year. Your bank deducts tax on that interest and reports it. You receive less than Rs. 200,000, and IRD now has a line on your record showing tax already paid in your name.
Now add a salary where APIT is deducted every month. Then add a client who deducted, say, Rs. 10,000 from a Rs. 200,000 consultancy invoice. By the end of the year, you could have three different sources of tax paid on your behalf, spread across dozens of transactions.
Why this matters more than it looks
The tax that’s already been deducted isn’t lost. When you file your taxl return, it can count toward what you owe. In plain words, it’s money you’ve already paid, and your return is where you get credit for it.
That creates two problems for most business owners.
The first is that you may be paying for something twice. If you don’t know what’s already been deducted, you can’t claim it properly. You might calculate your tax as if nothing was paid in advance, and end up paying more than you needed to. A deduction that never makes it into your return doesn’t help you.
The second is the surprise letter. The record IRD holds and the return you file should tell the same story. If your bank reported interest you forgot about, or a client reported fees you didn’t declare, the gap sits there quietly until someone at IRD notices it. Most people only find out about their record when a letter arrives. By then, you’re answering questions instead of getting ahead of them.
Neither problem comes from doing anything wrong. It comes from not being able to see what’s already been reported.
Why most people never check
In theory, you can piece this together yourself. You could collect certificates from every bank, ask your employer for an APIT statement, and chase every client who deducted tax from your fees.
In practice, very few busy owners do this. The certificates are scattered and some never arrive. You’d need to know what to look for and where. And the one moment everyone thinks about tax is the week before the deadline, which is the worst time to discover something needs fixing.
For the 2025/2026 year of assessment, the return is due on 30 November 2026. That’s the date that matters.
Introducing Simplebooks Tax Check
We built Simplebooks Tax Check because this problem shouldn’t take a week of digging to solve.
Tax Check is a free check-up of your IRD tax record. You give SimpleBooks permission to check it on your behalf, and in about 15 minutes you get a plain-language report showing:
- Tax deducted on your bank interest
- Tax deducted from your salary
- Tax deducted from your consultancy and service fees
- The returns you’ve filed
- Anything outstanding
There are no forms and no digging through old returns. We do the checking, and you get the list.
How it works:
- You authorize us. You give Simplebooks permission to check your IRD record on your behalf. You can withdraw that permission at any time.
- We check for you. We review your record and list what’s there: deductions from your bank, employer and clients, returns filed, and anything outstanding.
- You get your report. Everything is explained in plain language, for free, in about 10 minutes.
What you do with the report is up to you. If everything is in order, you’ll know, and you can stop wondering. If something needs attention, you’ll find out in time to fix it before 30 November instead of after.
A few honest points
Some things are worth saying clearly.
Simplebooks is an independent company. Tax Check is not an IRD service, and IRD does not endorse it. We check your record, with your permission, on your behalf.
The report shows you what’s there. It doesn’t promise an outcome. Tax already deducted may count toward what you owe. Whether that means you owe less, owe nothing, or have something to correct depends on your full situation. The report gives you the facts so that decision is based on something real.
Your information stays yours. It’s used only for the services you ask for. We never sell it.
Before you file
Every year, a lot of people file their return from memory. They add up what they think they earned and hope nothing’s missing. That works right up until the record IRD holds tells a different story.
A better order is to see the record first and then file.
Your bank, your employer and your clients have already done their part. Take 15 minutes and find out what they said.
