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Questions and Answers

Tax on sale of property

Question: I am the owner of a property (Land and Building) in Colombo which I plan to sell. The sale will realize a substantial profit. I am a tax payer and have already declared my property under the Assets and Liabilities Section of the Tax Return.

In this connection I would like to know whether the profit is liable to any type of tax. I have no intention of reinvesting the sale proceeds in another property and this is one and the only property that I possess.

S. Ekanayake - Colombo 5

Answer: No you are not liable for any capital gains tax as this has been done away with some years back. Since this property is your investment you are not liable to pay any tax on the profit. However, those who regularly buy and sell property, it becomes trading and such persons are liable to be taxed. Since you have no intention in reinvesting the sale proceeds in another property but if you deposit it in a Bank or a financial institution you will be liable to a With Holding Tax on the interest received.

Pension anomaly

Question: I have been reading your replies to subjects of common interest for several months and I also wish to get my payment of pension checked.

I retired as an ECC Grade I Officer with effect from May 31, 1981. I joined Government service from February 16, 1949. For easy reference I annex hereto copy of the award of Pension Letter bearing No. P.N. 227816 dated August 14, 1981. I also annex here to a copy of circular letter No. 06/2004 for easy reference.

When my pension was revised in terms of the above circular, I received only a paltry increase. I personally visited the pensions office (AGA Office Moratuwa) and they confirmed that I had been paid correctly, but a slip of the tongue that I was paid as an Officer in Class II changed the whole situation. They accepted their mistake and paid me the arrears. I now get only a sum of Rs. 12,129.35. Copy of my pension payment for April 2009 is attached.

Sir, it is my contention that I am being under paid as Officers who retired before me and after me receive higher pensions. During the past period i.e. from 1981 to 2004, the officers who attended to the computation of my pension may have erroneously computed the salary increase given by the Government to pensioners considering me as an Officer in Class II of the Clerical Service whereas I am an Officer in Class I.

Could you please come to my assistance in this regard and get my pension checked and take steps to pay me any arrears if any. I am now 80 years old and confined to my residence.

A.G.E. De Silva - Moratuwa

Answer: We suggest that you send a Registered letter to the Director General of Pensions. There is a Pensions Anomaly committee that meets in the Director General's Office and they will look into your matter and provide a response.

You should explain in writing about your pension anomaly stating that you are a Class I officer. Also enclose/attach copies of your pension award document, proof of your Class I promotion and copies of all relevant documents.

Your registered letter should be addressed to K.A. Tilakaratne - Director General of Pensions, Department of Pensions, Maligawatte, Colombo 10. On the left hand top of the envelope you must write 'Pension Anomaly'.

Importing of perennial plants

Question: I intend to import a dozen of a perennial plant (a popular small fruit bearing plant which grows to become a large tree and grown world wide especially in the mediterranean countries) from a recognized nursery in Australia. Could you let me know what clearances/licences I should take and from what institutions before importing same.

Kumar Edirisinghe Kalubowila

Answer: In order to import these perennial plants you have to obtain an 'Import Permit' for import of Agricultural plants. This certificate is issued by 'The Seed Certification and Plant Protection Centre' situated in Kandy. You can contact them on telephone No. 081-2388044 and call for an application form. This form can be down-loaded from the web as well www.agridept.gov.lk Once you fill this form and provide all the details they will issue the licence stating all the conditions for import. Thereafter, when you import these plants you have to obtain a certificate from the plant Quarantine Authority of that country. This certificate is called the 'Phytosanitary Certificate'. The National Plant Quarantine Centre, Air Port, Katunayake or Plant Quarantine Unit, Seaport Colombo will be the Offices checking for the Import Permit and the Phytosanitary certificate on arrival of the plants.

House built on undivided property

Question: A not so well to do relative of mine who lives in the village, managed to find employment. He is the eldest son of the family. After which he took a loan and built a house on the commonly owned property. The family then moved into this house and broke down the wattle and daub house they previously lived in.

Subsequently this relative managed to build a house in the town he worked in got married and lived with his family. Now his wife is asking her husband's family in the village to leave the house claiming it belongs to her husband. They have no where to go...

How would he have got a loan to build a house on a property owned by the family? What redress has the family got? What action can they take? There is talk of going to courts.

What line of action would you advice them to take?

Mrs. M. Perera - Kotte

Answer: Your relatives who are now living in the house built by their eldest son have no reason what so ever to leave this house and go else where. Since the son has built the house on a commonly owned property or undivided property neither he nor his wife can claim the house.

This is based on the information provided by you that it is an undivided property and owned by all legal heirs. He could have got a loan on any basis not necessarily by claiming the land as belonging to him. As to how he obtained the loan is immaterial.

The son's wife can talk of going to courts but they have no legal claim. Best if for this family to stay in this house and if harassed make an entry to the Police. Also this family can get legal advice by showing the deed of this property to a lawyer.

If this is a poor family they can get legal aid free of charge from the nearest Legal Aid Centre. LAC Head Office at 129, Hulftsdorp Street, High Court Complex, Colombo 10. Tel. 2433618, 5835329.

Re Issue of National Identity Card

Question: I lost my identification certificate 190950697V while travelling in a bus in November 2006.

I submitted all the necessary documents and stamps with the application to the Grama Niladari on 7.1.2006 for onward transmission. It was sent under registered cover No. 7114 of 9.1.2007 to Colombo.

Against wanted information by letter No. 6750 of 15.6.2007 and that too was supplied.

I drew their attention on 16.7.2008 and there is no reply.

Please help me.

C. B. Kobbekaduwe

Answer: The usual procedure in applying for a National Identity Card (NIC) is to handover the application from duly completed along with the photograph and photocopies of other relevant documents such as birth certificate and copy of police report in the case of lost NIC etc. to the Grama Niladari. The Grama Niladari accepts the application and returns to the applicant a tear off reference number from the application form. This reference number is the only and important reference, for checking up with the Department of Registration of Persons. The Grama Niladari has to hand over the application to the Divisional Secretary for onward forwarding to the Department of Registration of Persons for the issue of the NIC.

In your case you have not provided this reference number. Also you don't appear to have forwarded your application through the Divisional Secretary as you have provided a letter registration number which is not the correct procedure. In any case after two years from the date of application (as in your case) the relevant papers cannot be traced at the NIC issuing office. Suggest you make a fresh application following the correct procedure. Alternatively if you can provide the previous application number and the details or the (area) Divisional Secretary it may be possible to trace it if it is within two years.

BoC Customer Pension Scheme

Question: We refer to your questions and answers column in DN of 22.10.2008 about BoC Customer Pension Scheme (1981). The comments by OPA published in reply to my question were misleading the General Public.

We received the said communique (which is an unofficial document) from S. K. Mahalingam but it appears that the contents of it are contradictory to the original terms and conditions of the scheme published by the Bank of Ceylon. We attach herewith photocopies of the advertisement appeared in the Ceylon Daily News of 22nd January 1981 and the front page main news item published in the CDN of 13th January 1981. The Bank of Ceylon launches novel scheme 'Pensions for salaried and self employed' by Kris Rezel.

Both the news items clearly indicate the terms and conditions of the scheme. We checked all the internal circulars issued by the BoC for the continuance of the due payments to account holders under this scheme, and found that the Bank of Ceylon has made payments due to the pension account holders who maintained their accounts for making regular contributions. According to the original rules published in the media: "Substantial bonus payments will be made to account holders at the end of the 5th, 10th, 15th, 20th, 25th, 30th and 35th year until the payment of the monthly pension starts.

i.e. Pensions and bonuses will not be paid simultaneously, the account holder at his option can delay his monthly pension by five year terms and may enjoy the bonus at the end of the extended period.

We wish to point out that the OPA questions and answers column has published in the same newspaper, (Daily New) information contradictory to the original genuine terms and conditions of this scheme.

We insists that the OPA should correct this misrepresentation, and a public apology be made to the leading bank of our country, the Bank of Ceylon.

Eng. E. I. A. M. P.  Fernando - Wattala

Answer: Your question refers to the Q&A column in the Daily News of 22.10.2008.

We haven't got there yet (October 2009) perhaps you are referring to DN of 04.10.2007. As per that Q&A, the person who raised the question had stated as quote "Even after 25 years they should pay the bonus" unquote.

In the answer we had thanked the person for sending us a copy of the 1981 Bank of Ceylon circular titled.

"The unique National Pension (1981) scheme of Bank of Ceylon." We were told by Mr. Ponniah as well the BoC officers who attended the inquiry by the Financial Ombudsman that they could not trace a copy of the brochure or the circular which was subsequently forwarded by Mr. Mahalingam.

However that circular does not clarify that the bonus payment is only up to the time of commencement of pension. We thank you for sending us a copy of the DN of 22.01.1981 and 13.01.1981 on this subject which clearly states that the bonus payment ceases when the payment of pension commences.

In the DN of 22.01.09 in reply to your question, we have referred to the circular and its contents, on what basis are you referring to the circular as an unofficial document, whereas the same was tabled to the Financial Ombudsman for the inquiry accepted and filed with the inquiry papers.

At no state has the OPA in its reply to questions misrepresented any fact and therefore the question of an apology does not arise.

It is the BoC circular and the paper release that are contradictory.

Using two signatures

Question: I am a Government servant would be pleased if you would kindly provide a suitable answer through the Daily News, OPA pages regarding my using two different sign which are English and Tamil. Can I use this both signatures in future at the different signature? Please let me know the legal position on this matter. I don't have any problem yet.

A.L. Nawfer - Irakkamam

Answer: You can use your signatures in both languages but be cautious of how or where you use them. Say for letters or circular in Tamil you can use your signature in Tamil and for those in English or Sinhala you can use your English signature.

However, for purpose of banking and any legal matters you have to stick to one signature.

If to the banks you have provided your specimen signature in English, then you have to always sign all Bank documents in English, similarly for any legal documents if you keep changing your signature you will face problems and may not be accepted as legal.