Welcome to the new Financial Year 2073/74!
With the beginning of Shrawan, we welcome the new financial year at Nepal and with the new Financial Year, there are new business plannings, budget preparation, closing of books etc. Government of Nepal has also made few changes with respect to the remuneration taxation as declared in the budget speech delivered by the Finance Minister, Mr. Bishnu Poudel on Jestha 15, 2073 (May 28, 2016).
There has been some amendments in the tax rate applicable to the Resident Individuals as declared in the budget speech. The details of the slab rate applicable for the F.Y 2073/74 along with comparison with F.Y 2072/73 is shown below:
In addition, where the taxable remuneration of an individual is more than NPR. 25 lakhs, additional tax is applicable at the rate of 35% on the remuneration above NPR. 25 lakhs.
For example, if an individual who has opted to be assessed as Single Status and his yearly taxable remuneration is NPR. 6 Lakhs. The tax amount shall be as follows:
In the same example, if the individual has opted to be assessed as Couple Status, the tax exposure would be as follows:
The provided example shall be useful to understand regarding the computation of remuneration tax.
In addition, there are certain applicable deduction and rebate which reduces the tax exposure. The detail about such deduction and rebate will be discussed in the next post.
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