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The accident happened when a competing car in the racing event held at the central hill resort of Diyathalawa veered off the track and collided with the spectators, killing seven and injuring three others.
“In the accident, 23 people were critically injured and seven others were killed,” said police.
Police spokesman Nihal Thalduwa said that the deceased included an 8-year-old boy and four-track assistants among others.
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The annual event marking the traditional New Year festivities came to be halted in 2019 with the Easter Sunday attack where 270 people were killed in suicide bomb attacks.
Sunday’s resumption coincided with the fifth anniversary of the attack only to be halted by the tragic incident of seven deaths.