Quarterly Income Tax Instalments for 2026/27: What the Re-Revised Circular SEC/2026/E/06 Means for You
A plain-English guide to how instalments are calculated, which method you may use, which forms to file, and the dates to remember.
At a glance
- Instalments fall due on 15 August, 15 November, 15 February and 15 May. The second instalment for 2026/27 is due on 15 November 2026.
- Each instalment is (A − C) ÷ B. Most taxpayers simply use last year’s tax as “A” (the Standard Basis).
- If you expect lower income, or had no taxable income last year, you may use an Alternative Basis and file Attachment 1 or Attachment 2.
- Employees whose only income is taxed under APIT generally do not pay instalments.
- All supporting attachments must be submitted by 30 November 2026, and can be uploaded through RAMIS.
Read the original circular
IRD Circular SEC/2026/E/06 (Re-Revised), 16 pages including both attachment forms.
1. Why this circular matters
Section 90 of the Inland Revenue Act requires instalment payers to pay their income tax in four quarterly instalments during the year, instead of one large payment after the year ends. The Commissioner General issues a circular each year to explain how the instalment amount is worked out.
This is the re-revised version. It amends the circular first issued on 3 and 6 August 2026, and it was reissued at the request of taxpayers. The Inland Revenue Department (IRD) marks the changes in two ways: changes in the earlier revised circular appear in italics, and changes in this re-revised circular are highlighted. IRD has said payment instructions will be provided separately.
2. Due dates and the calculation formula
| Instalment | Due on or before | B (instalments remaining) |
|---|---|---|
| 1st | 15 August 2026 | 4 |
| 2nd | 15 November 2026 | 3 |
| 3rd | 15 February 2027 | 2 |
| 4th | 15 May 2027 (falls in the following year of assessment) | 1 |
As provided in section 90(3), as amended by the Inland Revenue (Amendment) Act, No. 11 of 2026
| Letter | Meaning |
|---|---|
| A | Tax payable on the taxable income of the immediately preceding year of assessment (gross income tax before deducting any tax credit). |
| B | Number of instalments remaining for the year, including the current one (4, 3, 2 or 1). |
| C | Total tax already paid during the year before the due date. This covers earlier instalments and WHT / AIT credits already withheld or still to be withheld. |
Because “C” includes what you have already paid, each later instalment automatically adjusts for earlier payments and for credits that have built up.
3. Which method applies to you?
| Your situation | Method | How “A” is found | Form |
|---|---|---|---|
| You had taxable income in 2025/26 and expect similar or higher income in 2026/27 | Method 1 Standard | Tax on 2025/26 taxable income | None |
| No taxable income in 2025/26 and none expected in 2026/27 | Method 2(i) | A = 0 | Attachment 1 |
| No taxable income in 2025/26, but income expected in 2026/27 (losses used up, or an exemption has ended) | Method 2(ii) | Tax on 2025/26 figures, ignoring losses deducted and exemptions applied | Attachment 1 |
| Income in 2025/26 but a significant fall expected in 2026/27 | Method 2(iii) | 2025/26 tax recalculated without income that will not recur | Attachment 1 with calculations |
| Newly registered taxpayer | Method 2(iv) | Estimated income for 2026/27 itself (one year only) | Attachment 2 |
| Unable to estimate “A” under 2(ii) or 2(iii) due to unusual circumstances | Method 3 | Method agreed with the Commissioner General | Written request |
4. Method 1: The Standard Basis
For most taxpayers, “A” is the tax on the taxable income of the preceding year. No documents need to be filed with the Commissioner General for payments made on this basis.
Mr X, hardware shop owner. Assessable income for 2025/26 is Rs. 3,800,000.
| Total assessable income | 3,800,000 |
| Less: personal relief | (1,800,000) |
| Taxable income | 2,000,000 |
| First Rs. 1,000,000 @ 6% | 60,000 |
| Next Rs. 500,000 @ 18% | 90,000 |
| Next Rs. 500,000 @ 24% | 120,000 |
| A (gross tax) | 270,000 |
With no WHT or AIT credits: (270,000 − 0) ÷ 4 =
Our illustration, not in the circular: if Mr X paid Rs. 67,500 in August, the second instalment is (270,000 − 67,500) ÷ 3 = Rs. 67,500.
Liqor (Pvt) Ltd, a liquor manufacturer. Amounts in Rs. ‘000 for 2025/26.
| Business income (sale of manufactured liquor) | 1,650,000 |
| Investment income | 6,000 |
| Less: qualifying payment | (3,000) |
| Taxable income | 1,653,000 |
| 1,647,000 @ 45% (liquor profits) | 741,150 |
| 6,000 @ 30% (investment income) | 1,800 |
| A (gross tax) | 742,950 |
WHT / AIT credits for 2026/27 are Rs. 880,000: (742,950,000 − 880,000) ÷ 4 =
5. Method 2: Alternative Bases
These methods are available only if you had no taxable income in 2025/26, or you reasonably expect lower taxable income in 2026/27.
(i) No income last year and none expected this year
“A” is treated as zero, so no instalment is due. For example, this may arise from heavy deductible tax losses. You must still submit a statement in Attachment 1. The circular now points to paragraph 6 and paragraph 8.2 of Attachment 1 for this declaration.
(ii) No taxable income last year, but income is expected this year
This applies where losses brought forward are no longer available, or an exemption that applied last year does not apply this year. “A” is calculated by applying the First Schedule rates to last year’s taxable income, disregarding any losses deducted or exemptions applied in that year.
New in the re-revised circular: if your 2025/26 tax computation is not finalised by the first due date, you may use your final SET (Statement of Estimated Tax) for 2025/26 for the first instalment. For the second instalment, revise the figure using the 2025/26 tax return. If you used the SET basis, file Attachment 1 for the first quarter and Attachment 1 (Revised) for the second quarter onwards. Only one revision is permitted.
ABC (Pvt) Ltd, biscuit manufacturer. Unrelieved losses of Rs. 526 million were brought forward. In 2025/26 the company set off Rs. 490 million against business income and Rs. 12 million against investment income, leaving Rs. 24 million to carry forward to 2026/27 (Rs. ‘000 below).
| Business income before losses | 490,000 |
| Less: loss still available in 2026/27 | (24,000) |
| Business income | 466,000 |
| Investment income | 12,000 |
| Taxable income | 478,000 |
| A: 478,000 @ 30% | 143,400 |
With WHT / AIT credits of Rs. 1,200,000: (143,400,000 − 1,200,000) ÷ 4 =
XYZ (Pvt) Ltd was exempt under its Board of Investment agreement up to 2025/26, with Rs. 44 million of exempt software export profits. Taxable income for 2025/26 was nil, but the estimate for 2026/27 taxes the same profits at 15%.
A = 44,000,000 @ 15% = Rs. 6,600,000, so (6,600,000 − 0) ÷ 4 =
(iii) Income last year, but a significant fall is expected
If business or investment income will drop (for example, a lost customer, higher expenditure or withdrawn investments), you may recalculate last year’s tax excluding the income that is not expected to recur. The same SET option and the same Attachment 1 / Attachment 1 (Revised) rule apply as in (ii). Attachment 1 must carry supporting calculations that prove the reduction. If you expect no taxable income because of losses or other allowable deductions, declare this in paragraph 8.2 of Attachment 1.
UVW (Pvt) Ltd lost a major customer that produced 42% of revenue, expects new business equal to 15% of previous sales, and withdrew two fixed deposits that produced 80% of its interest income. Net business reduction is 42% − 15% = 27% (Rs. ‘000).
| 2025/26 actual | 2026/27 estimate | |
|---|---|---|
| Business income | 636,000 | 464,280 |
| Less: B/F business loss | (42,000) | (42,000) |
| Investment income | 26,500 | 5,300 |
| Taxable income | 620,500 | 427,580 |
| Gross tax @ 30% | 186,150 | 128,274 |
With no WHT / AIT credits, A = Rs. 128,274,000 and (128,274,000 − 0) ÷ 4 =
(iv) Newly registered taxpayers
New taxpayers have no previous-year computation, so they estimate taxable income for the current year and apply the current year’s provisions and rates. This applies for one year of assessment only; from the next year the methods above apply. File Attachment 2.
6. Method 3: When you cannot estimate
If you are practically unable to calculate “A” under (ii) or (iii) because of unusual circumstances, submit a written request explaining your valid restrictions to the Commissioner, Tax Policy and Legislation Unit (on behalf of the Commissioner General), asking for another reasonable method.
7. Employees and APIT / AIT
APIT or AIT deducted, or expected to be deducted, by the employer may be subtracted before applying the formula. As a result:
- If you earn only employment income that is subject to APIT, you do not pay instalments and need not file the credit schedule.
- If you also have rent or interest subject to AIT, and the AIT covers the remaining liability, you are also exempt from instalments and the credit schedule.
- This also applies to employees whose APIT is calculated under APIT Table 8.
Mrs P had employment income of Rs. 5,000,000 and interest income of Rs. 1,000,000 in 2025/26. After personal relief of Rs. 1,800,000, taxable income was Rs. 4,200,000.
| First Rs. 1,000,000 @ 6% | 60,000 |
| Next Rs. 500,000 @ 18% | 90,000 |
| Next Rs. 500,000 @ 24% | 120,000 |
| Next Rs. 500,000 @ 30% | 150,000 |
| Balance Rs. 1,700,000 @ 36% | 612,000 |
| A (gross tax) | 1,032,000 |
8. Credit schedules and other rules
- Credit schedule (for “C”). The methods above only change “A”. You are advised to file a credit schedule in the specified format. It goes to the Central Document Management Unit (CDMU), Regional or Metro Office on or before the last day of the month in which the instalment is due: 31 August, 30 November, 28 February (29 in a leap year) and 31 May.
- Foreign tax credit. When estimating “A”, you may consider a foreign tax credit under section 80, but only if the foreign tax has been paid or is reasonably expected to be paid during the year.
- Alternative accounting periods. If you use an alternative 12-month period approved by the Commissioner General, the same rules apply without change.
9. Forms and how to submit them
| Form | Used by | Key contents |
|---|---|---|
| Attachment 1 (Form SEC/2026/SA/01), Original or Revised | Methods 2(i), 2(ii) and 2(iii) | Taxpayer details, brought-forward unrelieved losses, exemptions claimed in earlier years, estimated assessable income on the “Previous Year Return of Income” or “Previous Year SET” basis, estimated losses or deductions, declaration |
| Attachment 2 (Form SEC/2026/SA/02) | Method 2(iv), new taxpayers | Taxpayer details, estimated assessable income and gross tax for the year, estimated losses, declaration |
Deadline: attachments must be submitted on or before 30 November 2026. You may upload them when filing the 2025/26 Return of Income:
- In RAMIS, go to Upload Supporting Documents, then Supporting Documents, then Other Relevant Documents.
- Title the file TIN_2627_INSAttachment1 (for example, 111122222_2627_INSAttachement1, as written in the circular).
- Where applicable, change the title to INSAttachment1_Revised or INSAttachment2.
- Attachment 1 and Attachment 1 (Revised) may be submitted on the same date. To file manually instead, submit to the CDMU, Metro or the relevant Regional Office.
Each form includes a declaration that an incorrect or false statement is an offence, so keep your calculations on file.
10. Revising your basis mid-year
If you started on the Standard Basis but now project lower taxable income than last year, you may inform IRD of a revision. The request, with supporting information, goes to the CDMU on or before the last day of the month before the instalment is due: 31 October, 31 January or 30 April. You may then adopt Method 2 or Method 3, as applicable. (The 31 October date for the second instalment has now passed.)
11. Key dates for 2026/27
| Item | 1st | 2nd | 3rd | 4th |
|---|---|---|---|---|
| Instalment due | 15 Aug 2026 | 15 Nov 2026 | 15 Feb 2027 | 15 May 2027 |
| Credit schedule due | 31 Aug 2026 | 30 Nov 2026 | 28 Feb 2027 | 31 May 2027 |
| Last day to request a basis revision | n/a | 31 Oct 2026 | 31 Jan 2027 | 30 Apr 2027 |
| Attachments 1 / 2 deadline | 30 November 2026 | |||
12. What changed in the re-revised circular
- SET basis introduced for the first instalment where the 2025/26 computation is not finalised (Methods 2(ii) and 2(iii)), with a revision for the second instalment based on the filed return.
- Attachment 1 (Revised) for the second quarter onwards, limited to one revision, and a new “Previous Year Return of Income / Previous Year SET” basis choice on the form.
- Paragraph references (paragraph 6 and 8.2 of Attachment 1) for taxpayers expecting no income.
- Submission deadline of 30 November 2026, RAMIS upload steps and file naming, and a manual submission option.
Items in italics in the circular (for example the credit schedule dates, Method 3 “unusual circumstances”, Example 6 and the mid-year revision rule) came from the earlier revised version.
13. Practical checklist
- Work out “A” from your 2025/26 taxable income, or confirm that an alternative method truly applies.
- List WHT / AIT credits already suffered and expected, and file the credit schedule on time.
- If expiring losses or an ended exemption means you had nil taxable income last year, remember Method 2(ii): you may still owe instalments.
- If using a lower-income basis, prepare Attachment 1 or 2 with calculations before 30 November 2026.
- Keep records that support your estimate, as it is a signed declaration.
Frequently asked questions
Do I have to pay instalments if I am an employee?
Not if your only income is employment income subject to APIT, or if AIT on your rent or interest covers the remaining liability. In both cases, no credit schedule is needed either.
Can I choose a lower-income method just to reduce my instalments?
No. If you are eligible for the Standard Basis you cannot use the alternatives, which are reserved for taxpayers with no taxable income last year or a reasonably expected lower income. Under-payment attracts interest and penalty.
What if my 2025/26 tax computation is not finished?
Under Methods 2(ii) and 2(iii) you may use your final SET for 2025/26 for the first instalment, then revise on the basis of your filed 2025/26 return for the second instalment.
Where do I upload Attachment 1 or 2?
In RAMIS when filing the 2025/26 Return of Income, under Upload Supporting Documents, Supporting Documents, Other Relevant Documents. You can also submit them manually to the CDMU, Metro or the relevant Regional Office.
Disclaimer: This article summarises IRD Circular SEC/2026/E/06 (Re-Revised) dated 12 August 2026 for general information. It is not tax advice, and you should read the circular itself and seek professional advice on your specific facts. Rates and figures in the worked examples are those used in the circular.
Source: Inland Revenue Department, Sri Lanka (www.ird.gov.lk). Published by Lanka Tax Club.
