Skip to main content

Download Income Tax Act 2058 updated through Finance Ordinance 2078

There are numerous reforms made by the Finance Ordinance 2078 in the Income Tax Act 2058. The biggest winner seems to be Small businesses having turnover up to NRs. 1 crore as they are now covered under the presumptive tax/turnover basis taxation. Unlike earlier, the condition of not having registered in VAT has also been removed. It has somewhat the lessened tax burden but doesn't mean one should refrain from keeping from books of accounts.

Earlier such presumptive tax was available only for a resident person having income from business up to NRs. 20 lakh and profit of NRs. 2 lakh. Now, it has been increased to NRs. 30 lakh and taxable income of NRs. 3 lakh. 

Similarly, turnover tax has been increased from earlier NRs. 50 Lakh to NRs. 1 crore in case of a business. Now, the new slab applicable is as follows:
  • Turnover above NRs. 30 lakh up to NRs. 50 Lakh
    • conducting Gas & Cigratte business with 3% commission or value addition: 0.25% of turnover
    • other business: 0.3% of turnover
    • service industry: 2% of turnover
  • Turnover above NRs. 50 lakh up to NRs. 1 crore
    • conducting Gas & Cigratte business with 3% commission or value addition: 1% of turnover
    • other business: 0.8% of turnover
    • service industry: 2% of turnover
Second place goes to Start-Ups whereby it has been granted tax-exempt status up to 5 years from the date of commencement of operations provided the turnover is up to NRs. 1 crore. Further, startup seed investment has also been encouraged. Now, entities can claim expense deduction up to NRs. 1 lakh per startup (maximum 5 startups).


 
There are other changes as well which we will be covering over the next few weeks. Please stay tuned.

For reference, we have complied the Act with the recent changes. Click me to download

This is an unofficial version and not compiled by Inland Revenue Department. For any confusion or doubts, please go through Finance Ordinance 2078 published on the Ministry of Finance website.
Labels:
Location: Kathmandu 44600, Nepal

Comments

Post a Comment

Most Viewed

Tax Collection Agency codes for IRD Offices all over Nepal

Inland Revenue Department Nepal has published the agency codes that shall be used for the collection of direct and indirect taxes for the general public's information. Each code consists of 9 numbers. There are in total 59 agency codes currently in use. From these codes, we can classify that there are four types of IRD offices currently in operation. 1) Inland Revenue Office 2) Tax Payer Service Office 3) Large Tax Payer Service Office, and 4) Medium Tax Payer Service Office When shall you use these codes? It shall be used while choosing the agency where the tax should be deposited while completing the form for depositing the taxes. Agency Code list below: S.N. Agency Code Name Address 1 305011620 Inland Revenue Office Lahan 2 305030201 Tax Payer Service office Phidim 3 305030301 Tax Payer Service office Illam 4 305030401 Tax Payer Service office Khandbari 5 305030601 ...
1 comment
Read more

Process of Obtaining Tax Clearance Certificate in Nepal?

A tax clearance certificate confirms that an individual or entity: is in compliance with the Nepalese Income Tax Act, 2058 and its regulations, has submitted the tax return, audit report and necessary schedules, and all the taxes have been duly paid to the Government of Nepal Who issues Tax Clearance Certificate? The Inland Revenue Department (IRD) is authorized to obtain tax clearance certificate on behalf of the Ministry of Finance, Government of Nepal. How do I apply? An application must be filed at the concerned Tax Payer's office with NRs 10 stamp with the following documents enclosed: 1) Entity: Copy of the payment of taxes per Self Assessment submitted to IRD. Copy of the Audit Report duly audited by the member of the Institute of Chartered Accountants of Nepal (ICAN). Copy of the Previous Year Income Tax Return and Copy of Tax Clearance Certificate Obtained if any. Copy of the Permanent Account Number (PAN) Certificate. 2) Individual: In the c...
9 comments
Read more

Fees, Fines and Penalties under Nepalese Companies Act, 2063, Amended 2074

We normally get a lot of question in different forums on what is the registration fee of Company in Nepal and what are the various penalties imposed for non-compliance. Here's what we have compiled for you. Please get back to us on comments if you have any additional query. 1.          Fees during company registration a.        Private Limited Company S.N Authorized Capital Fee (In NRs.) 1 Up to Rs. 100,000 1,000 2 From 100,001 to 500,000 4,500 3 From 500,001 to 25,00,000 9,500 4 From 25,00,001 to 1,00,00,000 16,000 5 From 1,00,00,001 to 2,00,00,000 19,000 6 From 2,00,00,001 to 3,00,00,000 22,000 7 From 3,00,00,001 to 4,00,00,000 25,000 8 From 4,00,00,001 to 5,00,00,000 28,000 9 From 5,00,00,001 to 6,00,00,000 31,000 10 From 6,00,00,001 to 7,00,00,000 34,000 11 From 7,00,00,001 to 8,00,00,000 37,000 12 From 8,00,00,001 to 9,00,0...
Post a Comment
Read more