Guide7 min read8 views
Updated 3 November 2026 · Written by the Wahanaya.lk team
No. As of November 2026, profit from selling your own personal vehicle is exempt from income tax and capital gains tax under the Inland Revenue (Amendment) Act, No. 11 of 2026, backdated to 1 April 2024. The exemption doesn't cover dealer stock or vehicles claimed as a business asset.
No, you do not pay tax on the profit when you sell your own personal car in Sri Lanka. As of November 2026, this is confirmed by the Inland Revenue Department (IRD) under the Inland Revenue (Amendment) Act, No. 11 of 2026, which treats gains from selling a personal-use vehicle as neither income nor a capital gain. The exemption applies retroactively from 1 April 2024, so it covers vehicles sold before this was formally clarified too.
This is good news if you're selling a Toyota Aqua, a Suzuki Wagon R, a KDH van, or any other vehicle you've genuinely used for yourself or your family. But the exemption has limits, and there's a separate paperwork requirement (a Taxpayer Identification Number, or TIN) that trips people up and gets confused with "paying tax." Here's how to tell the two apart and sell without a surprise later.
No. If you're selling a vehicle you personally use — not a business vehicle, not dealer stock — the profit is completely free of income tax and capital gains tax, regardless of the vehicle's age, condition, or model, as confirmed by the IRD and reported by Newswire in June 2026. You don't need to work out a "gain" or report anything extra to the IRD just because you sold your car for more than you originally paid for it.
A personal-use vehicle is one you bought and ran for your own transport, not one bought with the intention of reselling for profit or used as a tool of a registered business. The exemption specifically excludes two categories: vehicles that are trading stock (held by a car dealer, importer, or anyone in the business of buying and selling vehicles) and vehicles that are a depreciable business asset — meaning you or your business claimed capital allowances (tax depreciation) on it. An ordinary person selling their own private car, van, or motorcycle is squarely inside the exemption.
Your sale could still be taxed if you're a dealer or importer selling vehicles as part of a trade, in which case the gain is ordinary business income taxed under normal rules — this exemption was never meant for that. It also doesn't apply if you claimed capital allowances on the vehicle as a business asset, for example a self-employed person who depreciated a delivery van for tax purposes. If that's your situation, the disposal may trigger a balancing adjustment under business income tax rules rather than the personal exemption. If your vehicle use is mixed — mostly personal but occasionally used for work and partly claimed as an expense — check with a tax advisor or the IRD before assuming the sale is automatically tax-free.
No. Since 3 June 2026, individuals in Sri Lanka pay a 15% capital gains tax on gains from disposing of "investment assets" such as land, buildings, and shares, up from the previous 10% rate, under the same Inland Revenue (Amendment) Act, No. 11 of 2026. This rate change is widely reported alongside the vehicle exemption because both came in the same amendment, which is why people sometimes assume their car sale is now taxed at 15%. It isn't — personal vehicles are carved out of the capital gains and income tax net entirely, so you pay 0%, not 15%, on the profit from selling your car.
Yes, but this is a paperwork rule, not a tax on your sale. Since January 2026, the DMT has required a TIN to complete most vehicle ownership transfers, recorded against both the new owner and, in practice, checked alongside the seller's details. As of 1 November 2026, a TIN certificate is also mandatory to obtain or renew a revenue licence, according to the IRD notice reported by Newswire. A small number of people are exempt from needing a TIN for this — including individuals under 18, qualifying non-resident foreign nationals who spend fewer than 183 days a year in Sri Lanka, and people with diplomatic privileges. If you or your buyer don't already have a TIN, sort it out before you go to the DMT, or the transfer will stall even though no tax is actually due on the sale.
Even though no tax is owed, hold onto your records in case you're ever asked to show the vehicle was for personal use. Keep a copy of the signed sale agreement showing the price and date, proof of payment (bank transfer slip, deposit receipt, or cheque copy), and your copy of the DMT transfer paperwork once the registration moves to the new owner's name. If you ever bought the vehicle under a business name or claimed any vehicle-related expenses on your tax return in past years, keep that history too — it's the detail that decides whether your sale falls inside or outside the exemption.
If your vehicle use was mixed, or it was ever registered to a company, or you've claimed vehicle expenses on a tax return before, don't assume the exemption automatically applies — a short conversation with a tax advisor or the IRD before you sell can save you a dispute later. For everything else about getting the sale itself right — pricing, documents, and finding a genuine buyer — you can list your vehicle at /post-ad and ask specific questions from other sellers in the Wahanaya forum.
When a buyer pays through a lease or bank loan, their finance company sends an approved valuer to inspect your car and registers itself as absolute owner on the CR book before you get paid, so expect extra paperwork and a short delay versus a cash sale.
Wahanaya.lk team8 min read
The safest payment is a bank transfer or bank draft you verify yourself by checking your own banking app or calling your bank — never a screenshot the buyer sends you. Don't hand over the CR book, keys or signed MTA 6 form until the money has actually settled in your account.
Wahanaya.lk team7 min read
Yes — the DMT's ownership-transfer system checks that your vehicle's VET (emission test) certificate and revenue licence are both in date before it lets the transfer go through, so renew an expired VET before you sell, unless your vehicle is exempt.
Wahanaya.lk team7 min read
Questions or your own experience? Share it here.
No comments yet. Be the first.
