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TRU Tax Rates 2010-11

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Income Inco me Tax Tax Rates

 

for the fi scal y ear 2010-1 2010-11 1

1.

Personal tax

1.1

For Residents FY 2008/09

FY 2009/10

FY 2010/11

Particulars Rs

Tax Rate

Rs

Tax Rate

Rs

Tax Rate

(a)  First Tax Slab

115,000

Nil

160,000

1%

160,000

1%

(b)  Next  Next

85,000

15%

100,000

15%

100,000

15%

(c) Balance Exceeding

200,000

25%

260,000

25%

260,000

25%

(a)  First Tax Slab

140,000

Nil

200,000

1%

200,000

1%

(b)  Next  Next

85,000

15%

100,000

15%

100,000

15%

(c) Balance Exceeding

225,000

25%

300,000

25%

300,000

25%

Individual   Individual

Couple   Couple

Under new provision, if the total taxable income of an individual is more than Rs 25 lakhs, additional tax at the rate of 40% shall be levied on tax liability calculated calculated under (c) effective FY 2010-11.  Note 1:  Natural person working at remote areas  are entitled to get deduction from taxable income to a maximum of Rs 50,000.  Note 2: Natural person with pension income included in the taxable income shall be entitled to deduct from taxable income an additional 25% of amount prescribed under first tax slab.  Note 3: Incapacitated natural person  shall be entitled to get deduction from taxable income an additional 50% of amount  prescribed under first tax slab.  Note 4: A natural person who has procured life insurance and paid premium amount thereon shall be entitled to a deduction of actual annual insurance premium or Rs 20,000 whichever is less from taxable income.   only 25% of the foreign allowances are to be  Note 5: In case of the employee employed at the foreign diplomatic of Nepal  only included in the income from salary.  Note 6: In 6: In case of women having only remuneration income, income, they are allowed rebate of 10% on the tax liability calculated as other natural person  Note 7: In 7: In case of individual having income from export, export, tax rate of 15% is applicable in place of 25% 1.2

For Non-Residents  Nature of transaction

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FY 2008/09

FY 2009/10

FY 2010/11

25% flat rate

25% flat rate

25% flat rate

5%

5%

5%

2%

2%

2%

5%

5%

5%

 Nepal.

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c)

Repatriation by Foreign Permanent Establishment.

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Accept All This document has been compiled in summary form exclusively for the information of clients and staff of T R Upadhya & Co.  It should not be relied upon as a substitute substitute for detailed detailed advice or a basis for formulating formulating business decisions. decisions.

 

Income Inco me Tax Tax Rates

 

2.

for the fi scal y ear 2010-1 2010-11 1

Corporate tax Nature of entity 1 1.1

FY 2009/10

FY 2010/11

25%

25%

25%

20% (Normal Rate)

20% (Normal Rate)

90% of normal rate

90% of normal rate

80% of normal rate

80% of normal rate

80% of normal rate

80% of normal rate

Company/ Firm/Industry Domestic income  Normal Rate (NR)

1.2

FY 2008/09

Other

I

Special industries (mainly manufacturing other than alcoholic & tobacco producing industry)

20% (Normal Rate)

ii

Providing direct employment to Nepalese citizens:

90% of normal rate

a)  for 300 or more by Special industries and information technology industries  b)  for 1200 or more by Special industries c)  to 100 Nepalese including 33% women, dalit & disabled by Special industries iii

Industries established in very undeveloped area (Sec 11.3.b), as defined in Industrial Enterprise Act

70% of the normal rate (for 10 yrs from the year of establishment)

50% of the normal rate (for 10 yrs from the year of establishment)

10% of the normal rate (for 10 yrs from the year of establishment)

iv

Industries establishment in undeveloped areas (sec 11.3.b ), as defined in Industrial Enterprise Act

75% of the normal rate (for 10 yrs from the year of establishment)

70% of the normal rate (for 10 yrs from the year of establishment)

20% of the normal rate (for 10 yrs from the year of establishment)

V

Established in underdeveloped areas ( Sec 11.3.b ), as defined in Industrial Enterprise Act

80% of the normal rate (for 10 yrs from the year of establishment)

75% of the normal rate (for 10 yrs from the year of establishment)

30% of the normal rate (for 10 yrs from the year of establishment)

vi

Industry established in 'Special Economic Zone' recognized in mountain areas or hill areas by the GON

Up to 10 yrs 100% exempt and 50% rebate in subsequent years

Up to 10 yrs 100% exempt and 50% rebate in subsequent years

Up to 10 yrs 100% exempt and 50% rebate in subsequent years

vii

Industry in 'Special Economic Zone' other thanestablished above locations

100% up to firstexempt 5 yrs and 50% rebate in subsequent years

100% up to firstexempt 5 yrs and 50% rebate in subsequent years

100% exempt up to first 5 yrs and 50% rebate in subsequent years

100% exempt for first 5 years and 50% rebate on subsequent 3 years

100% exempt for first 5 years and 50% rebate on subsequent 3 years

100% exempt for first 5 years and 50% rebate on subsequent 3 years

50% of applicable tax rate

50% of applicable tax rate

50% of applicable tax rate

100% exempt for first 10 yrs

100% exempt for first 10 yrs

-

75% of normal tax rate

75% of normal tax rate

50% of normal tax rate

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ix

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xi

Income derived by the foreign investors from investment in ‘Special Economic Zone’ (Source of income-use of foreign technology, management service fee and royalty) Industry established in remote areas

Import income of Information Technology Industries at IT Park as declared by government

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Income Inco me Tax Tax Rates

 

for the fi scal y ear 2010-1 2010-11 1

Nature of entity xii

Institution having licensed to generate, transmit, and distribute electricity shall be allowed if the commercial activities started in terms of electricity generation, generation and transmission, generation and distribution or generation, transmission, distribution before BS 2075 Chaitra and these exemptions shall also be available for solar, wind

FY 2008/09

FY 2009/10

FY 2010/11

-

100% exempt up to seven years and 50% rebate on subsequent 3 years

100% exempt up to seven years and 50% rebate on subsequent 3 years

and other alternative energy companies xiii

Income from export of goods produced by manufacturing industries

-

-

75% of normal tax rate

xiv

Income from construction and operation of road, Bridge, Airport and Tunnel or income from investment in tram and trolley bus

-

-

60% of applicable tax rate (i.e.20%)

xv

Income of Manufacturing Industry, tourism service industry and hydropower generation, distribution and transmission industry listed in the security exchange (i.e. capital market)

-

-

90% of applicable tax rate

xvi

Industry established in least developed areas  producing brandy, wine, sider from fruits.

-

-

60% of applicable tax rate up to ten years

xvii

Royalty from export of intellectual asset by a person

-

-

75% of applicable tax rate

xviii

Income from sale of intellectual asset by a person through transfer

-

-

50% of applicable tax rate

30%

30%

30%

30%

30%

30%

30%

30%

30%

1.3

Banks and Financial Institution Institutionss Commercial Banks, Development Banks and Finance Companies

1.4

Insurance Business General insurance business

1.5

Petroleum Industries Entity engaged in petroleum business under Nepal Petroleum Act, 2010 Institution having licensed to exploration for

 petroleum This website stores data such as or natural gas become commercial before BS 2075 Chaitra cookies to enable essential site functionality, as well as marketing, personalization, and analytics. You may change your settings at any time 1.6 Other business entities or accept the default settings.

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-

Entity involve involve in construction of roads, bridges, tunnels, rope-ways, suspension bridges etc.

-

Income earned by the natural person wholly involved in special industry

-

Income earned by the natural person person relating relating to Export activities

100% exempt up to seven years and 50% rebate on subsequent 3 years

20%

20%

20%

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 Note 1:  No additional tax is to be levied on the taxable income. income. (Deleted by Finance Act 2065)  Note 2: i f  f any company is entitled to more than one privilege U/S-11 only one will be entitled as opted by the entity

Accept All This document has been compiled in summary form exclusively for the information of clients and staff of T R Upadhya & Co.

 It should not be relied upon as a substitute substitute for detailed detailed advice or a basis for formulating formulating business decisions. decisions.

 

Income Inco me Tax Tax Rates

 

3.

for the fi scal y ear 2010-1 2010-11 1

TDS withholding in other payments Nature of transaction

FY 2008/09

FY 2009/10

FY 2010/11

Exempt from tax

Exempt from tax

Exempt from tax

i

Interest income from deposit up to Rs 10,000 under 'Micro Finance Program', 'Rural Development Bank', ' Postal Saving Bank' & Co- operative (u/s-11(2)) in rural areas

ii

Wind fall gains

25%

25%

25%

iii

Payment of rent made by resident person having source in Nepal

10%

10%

10%

iv

Profit and gain from transaction of commodity future market

-

10%

Nil

V

On Dividend paid by the resident entity. 5% for both

5% for both

5% for both



To Resident person



To Non resident Person

vi

On payment of gain in investment insurance

5%

5%

5%

vii

On payment of gain from unapproved retirement fund

5%

5%

5%

viii

On payment of interest or similar type having source in Nepal to natural person [not involved in any  business activity] by Resident Bank, financial institutions or debenture issuing entity, or listed company

5%

5%

5%

ix

Payment made by natural person relating to business activity or other payments relating to house rental except house rent

 No TDS

No TDS

No TDS

X

Payment for articles published in Newspaper, question setting, answer evaluation

 No TDS

No TDS

No TDS

xi

Interest payment to resident bank, other financial institutions

 No TDS

No TDS

No TDS

xii

Interregional interchange fee paid to credit card issuing bank

 No TDS

No TDS

No TDS

xiii

Interest or fees paid by GoN under bilateral agreement

 No TDS

No TDS

No TDS

xiv

On payment of general insurance premium to resident

 No TDS

No TDS

No TDS

1.5%

1.5%

1.5%

1.5%

1.5%

1.5%

1.5%

1.5%

1.5%

15%

15%

15%

10%

10%

15%

5%

5%

5%

15% 15%

10% 15%

10% 15%

insurance company

This website stores data as xv such On payment of premium to nonresident insurance cookies to enable essentialcompany site functionality, as well as marketing, xvi Contract payments exceeding Rs 50,000 personalization, and analytics. You xvii Payment of consultancy fee: may change your settings at any time to resident person against VAT invoice or accept the default settings. -

xviii

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xix

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to resident person against Non -VAT invoice

Payment on contract to Non Resident person -  On service contract -  On repair of aircraft & other contract -  In cases other than above as directed by IRD Gain on disposal of Interests in any resident entity (both listed or unlisted) exchange(Taxable amount is gain calculated under section 37) -  To resident natural person -  To others including non resident

Accept All This document has been compiled in summary form exclusively for the information of clients and staff of T R Upadhya & Co.

 It should not be relied upon as a substitute substitute for detailed detailed advice or a basis for formulating formulating business decisions. decisions.

 

Income Inco me Tax Tax Rates

 

4.

for the fi scal y ear 2010-1 2010-11 1

Income from investment Particulars

FY 2008/09

FY 2009/10

FY 2009/10

5%

5%

10%

10%

 Normal Rate

Normal Rate

Normal Rate

FY 2008/09

FY 2009/10

FY 2010/11

Mini bus, Mini Truck, Truck and Bus

Rs 1,500

Rs 1,500

Rs 1,500

Car, Jeep, Van, Micro Bus

Rs 1,200

Rs 1,200

Rs 1,200

Three Wheeler, Auto Rickshaw, Tempo

Rs 850

Rs 850

Rs 850

Tractor and Power Tiller

Rs 750

Rs 750

Rs 750

Metropolitan, Sub-Metropolitan

Rs 5,000

Rs 5,000

Rs 3,500

Municipal Areas

Rs 2,500

Rs 2,500

Rs 2,000

Other than municipal areas

Rs 1,500

Rs 1,500

Rs 1,250

Individual Tax withholding on capital gain for natural person on transaction exceeding Rs 3 million (to be made by Land revenue office at the time of registration): -

15%

disposal of land & building owned for more than 5 years uptoor10land years disposal of land or land & building owned for less less than 5 years

Corporate Income from disposal of non-business chargeable assets (Capital gain)

5.

Presumptive taxation Particulars Vehicle Tax

Small Tax Payer

 Note:  Small tax-payer means natural person whose annual turnover is less than Rs 2 million and income   not exceeding

 Rs 200,000.

Contact for further information T R Upadhya & Co. Co. 

T R Upadhyay  Upadhyay 

Chartered Accountants

Senior Partner [email protected] 

Housesuch No. 61, This website stores data asAnnamika Galli P. O. Box 4414 cookies to enable essential site Kathmandu, Nepal functionality, as wellBaluwatar, as marketing, www.trunco.com.np personalization, and analytics. You may change your settings at any time Phone: +977 1 4410927, 4414695 or accept the defaultFax: settings. +977 1 4413307

Shashi Satyal  Satyal  Partner [email protected]   [email protected]

Email: [email protected] [email protected]  

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