Covid-19 related Tax relief for Fiscal Year 2077/78

Nepal government has announced significant tax waivers for the industry which have been hard hit by Covid such as hotels, travels, trekking, film industry, party palace, transportation industry, etc. Besides it has also provided relief to businesses having turnover up to Rs. 1 crore, additional loss set off and allowed a deduction for contribution to Corona Fund set up by Nepal Government and assistance in the construction of hospitals or purchase of medical equipment.

Here's the detail that is applicable for Income Year 2077/78:

Tax Waiver

90% tax waiver for business having a turnover up to Rs. 20 Lakh and profit of Rs. 2 Lakh that have opted for Presumptive tax.
75% tax waiver for business having a turnover above Rs. 20 lakh up to Rs. 50 lakh that have opted for turnover basis taxation.
50% tax waiver for business having turnover up to Rs. 1 crore.
1% tax on taxable income for hotels, travel, trekking, film development (development, distribution, and movie halls), party palace, media house, transportation, or air service having turnover above Rs. 1 crore

Loss Set-off

Extension of loss set-off period by 3 years provided hotels, travels, trekking, film development (development, distribution, and movie hall), party palace, media house, transportation, or air service are in a loss in FY 2076/77 and FY 2077/78.

Expense Deduction

Any person who has contributed to Nepal Corona Virus Control, Prevention, and Treatment Fund in FY 2077/78 can deduct such contribution while calculating taxable income.
Entity contributing towards the construction of hospitals and purchase of Covid-19 treatment-related medical equipment and materials as prescribed by Nepal Government, Ministry of Health and Population through the amount set aside from such entity's Corporate Social Responsibility fund shall be allowed as expenses while calculating taxable income.

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